Articles in TODAY


Lectures &

News $ Views

Law &



Trust Products
& Practice

About the Guru


Email Feedback

Guest Register









dinoW.gif (10986 bytes)

Suspicious activity report key to fight vs dirty money

(Article published in the September 24, 2001 issue of TODAY, Business Section)

That four terrorists who perpetrated the attack on the World Trade Center and the Pentagon last 11 September were allegedly in the Philippines late last year and early this year, coupled with the revelation that al -Qaida, purportedly an international group under Osama bin Laden, is expanding its network in Mindanao, virtually foreclosed whatever chances we had of avoiding the Financial Action Task Force’s (FATF) sanctions without an anti-money laundering law by September 30, 2001.

Imagine the frustration of American investigators who wish to find out how the terrorists were funded and where the money of the al -Qaida will be coming from when confronted by the answer, "We do not know because we are prevented from looking into their bank accounts by our bank secrecy laws".

Committee Reports in both the Senate and House of Representatives submitting the anti-money-laundering bill for floor debates are simply not enough. The FATF will want nothing less than a law. Terrorism and money laundering are cognate activities. War on terrorism cannot succeed without an anti-money laundering regime worldwide.

So, why are we not all excited and calling for marathon rallies for Congress to pass anti-money laundering legislation before the end of the month? A national malaise called distrust, I suspect.

Actually, declaring money laundering to be a crime is not the problem with the anti-money laundering bills. Those who do not launder money couldn’t care less. Those who do and intend to, on the other hand, know that, given our criminal justice system, conviction is more a theoretical possibility than a practical probability.

The road to criminal conviction is a long and tedious process, which is our own definition of "due process", and is paved with a thousand and one dilatory tactics. Ask anybody involved or even just following the Estrada trial. In addition, because it is a topic of national significance, the criminalization of money laundering could even go the way of the plunder law; the small fry gets convicted; but the big fish gets to bring the law to the Supreme Court on the issue of constitutionality. The country waits with bated breath just exactly what signal the highest court of the land about our seriousness in curbing corruption and pushing for good governance.

What really bothers many, the honorables in Congress as well as the respected leaders of the private enterprise, is an essential feature of any anti-money laundering law, namely, a suspicious activity reporting system that is necessary to alert the authorities to money-laundering in progress in time for law enforcers to frustrate its completion. Like the electrification of the gates of Malacanang, the problem is how to achieve its purpose of preventing an attempt at unlawful entry but at the same time prevent some blind pauper who has lost his way and is groping for support from being zapped to kingdom come.

In most jurisdictions, the system is simply to require those in the first line of defense - the financial and other institutions which are face to face with the bearer of dirty money - to report to a central authority transactions which they suspect are part of a money laundering operation. The central authority builds its data bank based on those reports and, on the basis of that data bank, its experience and knowledge of the bigger picture, decides whether or not in a specific instance to trigger the process of investigation and forfeiture intended to deny the criminal the enjoyment of his money. This is known as the Suspicious Activity Reporting (SAR) system.

But for us still, given the enduring the legacy of corruption and government oppression of prior regimes and administrations, any SAR is itself suspect. In our culture, one who is merely a suspect is already considered guilty. Never mind the principle that everyone is presumed innocent until proven guilty and the legal adage that is presumed innocent until proven guilty is never taken to heart by many. For that reason, media exposÚs achieve their objectives even if eventually the target gets exonerated in a full-blown trial. We thus escrew anyone acting on mere suspicion.

At the same time, we secretly suspect everybody. There is not one institution standing in this country that enjoys one hundred percent credibility. The executive branch is forever being "cleaned up" by one administration after another. The legislature is not without its so-called extortion gangs and investigations in aid of fund generation. The judiciary, to borrow one of the more memorable quotes from the former President, has its "hoodlooms in robes". We are not able to trust anyone amongst us; we will trust only an angel from heaven with credentials duly authenticated by St. Peter.

But without a good SAR system, any anti-money laundering law is not worth the paper it is written on. The real menace of money laundering is not the money launderer. In an honest-to-goodness money-laundering operation, the money launderer is an expendible pawn; the hand that moves the pawn is not on the chessboard. The real enemy is the dirty money and the sooner its presence is detected, the greater the chances of neutralizing its capability to destroy our society.

Our legislators must quickly craft a law that sets up a reporting system that efficiently gathers timely information but insures that the information it receives is used judiciously, without danger of abuse or harassment from those who maintain the data bank.

An antimoney-laundering law will, of necessity of, make whistle-blowers of us all. That’s OK and most will accept that new role as part of doing business in the present times. The fear that we must conquer is that nagging suspicion in our heart of hearts that the one who will act on our blowing may not be as clean as a whistle.