Plugging loopholes in anti-money laundering, bank secrecy laws

Remedial measures aimed to plug gaps and loopholes in at least four national laws as a result of the Senate investigation into the P728-million fertilizer fund scam
is being prepared by Independent Senator Richard J. Gordon.

Gordon, chairman of the Senate blue ribbon committee, said he is introducing significant amendments to these laws so that individuals would no longer take undue advantage of the present weaknesses of the country's legal system.

These laws are the 2001 Anti-Money Laundering Act (AMLA), the Implementing Rules and Regulations of the Anti-Money Laundering Council (AMLC), the Secrecy of Bank Deposit Act, the Government Procurement Reform Act, and the Omnibus Election Code.

"We are going to introduce important legislation in order to close gaps and loopholes in the AMLA and other laws. These will have to be recommended and I assure you that we will file completed bills," he said.

Among the bills Gordon is introducing include one that amends Section 10 of the AMLA aimed to lengthen the extension period of the freeze order from an additional six months, as provided by a Supreme Court Circular, to two years.

Under the proposed remedial measure, the two years freezing period should be applied for every six months in order to prevent grave abuse of discretion on the part of the AMLC.

Gordon noted that when the six-month effectivity period of the freeze order on the accounts of former agriculture undersecretary Jocelyn Bolante expired, the AMLC could no longer seek for extension of the freeze order since it has eaten up the allowable six-month maximum period.

He explained that had the AMLC filed a civil forfeiture case against Bolante, the bank accounts would not have been unfrozen and the former undersecretary would not be able to withdraw funds from it.

Meanwhile, Gordon is also filing a second bill which seeks to amend Section 2 of RA 1405 or the Secrecy of the Bank Deposit Act. Under the proposed amendment, former and current public officers and employees are deemed to allow the examination of all their accounts that are the subject of any investigation.

This refers specifically to those charged before the Courts with any violation of the Anti-Graft and Corrupt Practices Act or whose accounts have been frozen under RA 9160 as amended by RA 9194, also known as the Anti-Money Laundering Act.

According to the senator, during the hearings conducted by his committee on the alleged anomalous fertilizer project, they were restricted to scrutinize Bolante's bank accounts nor were they able to extract information relating to the accounts of Bolante because of the strict and inflexible confidentiality rule under the Bank Secrecy Law.

A third bill Gordon is filing seeks to amend Section 261 of the Omnibus Election Code of the Philippines, prohibiting the release of public funds 45 days before a regular election and 30 days before a special election.

It specifies the prohibition of release of public funds for all farm implements, farm inputs and post-harvest facilities under the Department of Agriculture and funds under the Agriculture and Fisheries Modernization Act.

Also prohibited would be the release of funds for all livelihood projects, all financial assistance for the local government unit or non-government organization, except, assistance for calamity or disaster, and all special projects of different departments and its attached agencies.

Lastly, Gordon is introducing a fourth bill which amends the Government Procurement Reform Act and seeks to include private institutions, non-government organizations, peoples' organizations and foundations that receive government money in the coverage of the Procurement Act.