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GREED, CRISIS, MONEY LAUNDERING, AND THE FUTURE
By LULU RECLUSADO-NARIO
EXPERTS say the global economic crisis we are now suffering stemmed from the greed of a few businessmen. What else is new?
In a recent exclusive interview with MOD, Atty. Vic Aquino, executive director of the Anti-Money Laundering Council (AMLC) Secretariat, said unscrupulous businessmen-particularly those involved in money laundering-have been wrecking the economy even before the meltdown occurred on Wall Street.
Excerpts:
M: What should we know about money laundering?
Mr. Aquino: Financial crimes and other greed-motivated offenses generate huge amounts of money for the criminal. Generally, these funds are forfeited upon conviction of the offender. If the funds, however, were successfully launched-for instance, beyond the reach of the authorities or were placed in the name of dummies-the criminal may still enjoy them later on.
Anti-money laundering legislations were enacted to target these criminal proceeds. The objective is to prevent criminals from using and enjoying the proceeds of their criminal activities by penalizing them even for the mere attempt to launder criminal proceeds and thereafter to confiscate these proceeds that are in any way related to their criminal activities.
By its very nature, money laundering is a derivative offense, meaning there must be an unlawful activity that generated proceeds, which are then sought to be laundered to make them appear to have been obtained from legitimate sources. That is why the average Juan may find this description too technical.
So how does one help in the prevention of money laundering?
In my view, the best way to prevent money laundering is to prevent the commission of activities that generate the illegal products. The efforts should be preemptive, not reactive. Or, if the criminal proceeds are identified and located, these funds or assets as well as the persons or institutions in whose name the same are recorded must be reported to the AMLC.
How is money laundering affecting the economy?
Money laundering is motivated by avarice. If laundering money is successful, it would mean generous profits for criminals without fear of confiscation of the fruits of their criminal labor and without the risk of being identified, investigated, prosecuted, and convicted for money laundering laws and its predicate offense. A country with non-existent or lax anti-money laundering laws would easily breed corruption and become a money laundering haven for criminals. Such a status would surely hurt a country’s reputation and foreign investors would shun such country.
What does that mean to the ordinary Filipino?
You mean how does it affect the ordinary Filipino? I will give you a concrete example. In June 2000, the Philippines was blacklisted by the Financial Action Task Force by placing the country in the list of Non-Cooperative Countries and Territories (NCCT) because of the absence of anti-money laundering laws or regulations.
If I were an OFW based in Hong Kong and would attempt to send money back to the Philippines, the remittance company (REMCO) in Hong Kong, seeing that the destination was on the NCCT list, may deny my application to remit. The REMCO, however, may still process my request but he would have to conduct an enhanced due diligence so that he would be satisfied that my money was legitimately sourced and that it was not intended to be laundered or to finance the commission of terrorist or other criminal acts. For conducting enhanced due diligence, the REMCO would be justified in collecting higher fees for the transaction. In both instances (denial or charging higher fees, not to mention delay in the processing of the remittance), the Filipino would be at a disadvantage. In a country with more than seven million citizens deployed abroad, this is something we should not allow to happen again.
How grave is the threat of money laundering in the country?
Since the enactment of the Anti-Money Laundering Act of 2001 (AMLA), as amended, money laundering or the processing of criminal proceeds or dirty money to make them appear to be legally earned has been more of a risk rather than a threat.
The AMLA provided for financial and regulatory requirements to ensure that financial or covered institutions would not be abused or be used to funnel or process illegally acquired funds. It also criminalized money laundering to deter commission of such crime. In this regard, I would say that the risk has been minimized but not totally eliminated. As long as there are financial institutions, gatekeeper professions, and businesses that are not under the coverage of the AMLA, the risk of laundering money through these channels is high. Criminals are continuously looking for ways to launder their money. This is why every new technology or financial product offered in the market is assessed by regulators and the AMLC for potential risk of money laundering or other financial crimes.
How are we faring in the fight against money laundering?
Modesty aside, the AMLC has been relatively successful in taking legal action against perpetrators of money laundering and the underlying unlawful activities, including terrorist financing. This is because we have involved legal, law enforcement, and other regulatory agencies of the government in the war on these crimes. Despite a meager budget of P10 million per annum and manpower constraints, we have obtained many freeze orders and several civil forfeiture judgments against drug dealers, kidnappers, corrupt officials, swindlers and other criminals. We have also sent a bank manager, who was convicted by final judgment, to jail for money laundering. We are now prosecuting no less than 80 criminal cases for money laundering and related cases before the courts, the Department of Justice, and the Office of the Ombudsman.
What do you hope to achieve this year and what are your plans towards making the country free of money laundering cases?
Last year, the AMLC proposed some amendments to the AMLA which would further strengthen the AMLC’s institutional framework and capability, widen the AMLA’s coverage so as to include other financial institutions, professions (lawyers and accountants), and other businesses (casinos, real estate dealers, and dealers in precious metals, and increase in the number of predicate offenses as to include bribery, terrorism and terrorist financing, corruption of public officers, frauds and illegal exactions, malversation, forgeries and counterfeiting, trafficking of persons, violation of the Forestry and Fisheries Code, carnapping, and various environmental laws.
In this regard, the House of Representatives had already passed a bill coauthored by House Speaker Prospero Nograles, Congressmen Jaime Lopez, and Rufus Rodriguez. We hope to see these proposals enacted and become law within the year.
In the Senate, Senator Panfilo Lacson has also introduced a bill to further amend the AMLA. I understand Senator Richard Gordon is likewise introducing a bill to amend the AMLA to make the AMLC more effective.
This year, the President has intensified the fight against predicate offenses, particularly drug trafficking and corruption. As more of these underlying unlawful activities are prosecuted, we anticipate a surge in the number of money laundering cases being filed as well by the AMLC.
How do you handle critics of the AMLC?
I do not allow critics to distract me. So far, I have only allowed my critics (only a handful who evidently have not read or understood the AMLA or are unaware of what the AMLC has done by way of implementation of the AMLA) to lose their heads while I keep mine. In my more than six years as AMLC Secretariat executive director, I have only written one letter to the editor of a major daily and this was to point out the facts and set the record straight.
Comments? Email modeditor@gmail.com |
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