PERMISSION OR WAIVER IN FAVOR OF THE OMBUDSMAN TO LOOK INTO
ALL DEPOSITS OF WHATEVER NATURE WITH BANKS OR BANKING
INSTITUTIONS BOTH WITHIN AND OUTSIDE THEPHlLIPPINES INCLUDING
INVESTMENT BONDS ISSUED BY THE GOVERNMENT OF THE PHILIPPINES,
ITS POLITICAL SUBDIVISIONS AND INSTRUMENTALITIES AND PROVIDING
“No Financial Privacy For Public Servants”
Chiz: Gov’t officials should not hide behind banking secrecy laws
Senator Chiz Escudero on Thursday called on his colleagues in Congress to work for the passage of a bill he filed which, if approved, would enable the government to examine the bank accounts and investments of civil servants
Escudero said that had Senate Bill No. 1476 been passed into law, government officials like State Prosecutor John Resado and former Agriculture Secretary Joc-Joc Bolante may not be able to evade questions in any hearing about their financial standing, especially in congressional inquiries.
The bill, which puts in place a mechanism that allows the government to audit the finances of a civil servant, was among those filed by the senator during his first year as a member of the Philippine Senate.
“To ensure that the civil servant does not use his position to enrich himself, there must be transparency in the financial standing of the civil servants. Once passed, this bill will serve as deterrent to graft and corruption,” he said.
Escudero explained that once passed into law, the bill requires public officials and employees to submit a written permission or waiver in favor of the anti-graft body, Office of the Ombudsman, to look into all deposits of whatever nature with banks or banking institutions.
This will effectively put a certain class of people, in this case civil servants and high government officials, beyond the protective mantle of banking secrecy laws, which are often times being used as shield in investigations involving corruption.
Escudero said people like Resado and Bolante are emboldened by the cloak of the bank secrecy law, which also leaves lawmakers’ hands tied from further digging into their questionable finances.
“This covers both those within and outside the Philippines including investment bonds issued by the government” Escudero added.
The waiver, he said, should be contained in the SAL (statement of assets and liabilities) of all government officials and employees.
The senator said the passage of this bill is timely as it will not only plug loopholes in the anti-graft and corruption efforts of the government, assuming that they have some, but it will also aid the government to recover ill-gotten funds.”
29 January 2009
On Bank Secrecy (articles from various sources)
1. The Swiss Bank Secrecy
“If You Are Not A Criminal”
In Switzerland, once the world champion of banking secrecy, bank secrecy can now be “lifted for matters such as inheritance, divorce and debt and bankruptcy by order of a legal authority“.
- “Swiss bank accounts are so popular because of political stability, safety stable currency backed by gold, excellent quality of banking services and privacy- if you are not a criminal.
- “Political stability – Switzerland has not been at war with another country since 1505
- Safety – Swiss banks are extremely safe. There is only an extremely remote chance of losing money deposited in a Swiss bank.
- Stable currency backed by gold – the Swiss francs is probably the most stable currency in the world
Excellent quality of banking services – internet banking, sophisticated investment services, multiple currency accounts and many other high-level services are available in Swiss banks.
- Privacy – if you are not a criminal, it is almost impossible for anybody to get any information about you out”
“For The Sake Of Public Interest”
” Swiss bank secrecy is most often lifted for criminal cases such as narcotics trafficking, extortion, terrorism, etc. The objective of a criminal trial is not to plead in the interest of the parties, but for the sake of public interest, and so the client’s right to bank secrecy gives precedence to the interest of justice. As such, bank secrecy is not an obstacle to criminal prosecution. Both the justice system and the Swiss banks take active part in the fight against money laundering.
The limits to Swiss bank secrecy
There are a limited number of exceptions to Swiss bank secrecy that are strictly regulated by law.
In theory, bank secrecy can be lifted for matters such as inheritance, divorce and debt and bankruptcy by order of a legal authority.
In practice, Swiss bank secrecy is very difficult to lift, for the plaintiff must first prove before the Swiss court that the account exists in Switzerland, e.g. by producing a bank statement.
Note that tax evasion is not considered sufficient grounds for lifting Swiss bank secrecy.
By Lira Dalangin-Fernandez
First Posted 18:05:00 01/27/2009
Filed Under: PDEA-DOJ bribery issue, Banking, Congress, Graft & Corruption
MANILA, Philippines — State Prosecutor John Resado, who is in the center of a scandal involving alleged for government lawyers to dismiss a drugs case against three scions of prominent families has refused to waive his right to the secrecy of his bank account.
“The undersigned expressly manifests to this Honorable Committee that he is not waiving his rights under the Law on Secrecy of Bank Deposits and other related laws, over his bank account with Banco de Oro, SM Bacoor branch, Bacoor, Cavite,” Resado said in a letter to the oversight committee on dangerous drugs, which is conducting an inquiry into the so-called “Alabang Boys” controversy.
Resado said he was also “invoking his constitutional right to privacy which should be respected by everyone.”
Cebu Representative Antonio Cuenco said Resado’s refusal to waive his right to bank secrecy indicated that the prosecutor “is hiding something.”
“This fortifies the suspicion created among members of the committee that, indeed, Prosecutor John Resado is hiding something,” Cuenco, vice chairman of the oversight committee, told reporters at a news conference.
It was, Resado recommended the dismissal of the drug case filed by the Philippine Drug Enforcement Agency (PDEA) against Richard Santos Brodett, Jorge Jordana Joseph and Joseph Ramirez Tecson.
Soon after, the PDEA aired the allegations of bribery.
Both houses of Congress are now undertaking their respective inquiries into the controversy.
Last week, both Justice Secretary Raul Gonzalez and the PDEA disclosed an anonymous letter claiming on the day he recommended the dismissal of the drugs case, Resado and his wife each received P800,000 in their respective bank accounts, or a total of P1.6 million.
At least week’s House hearing, Resado acknowledged the P800,000 deposit on December 2 but said this were the earnings from a money lending business he and his wife ran in Tarlac but did not register because they considered it part of the “underground economy.”
However, a number of congressmen were unconvinced by Resado’s claim and dared him to waive his bank secrecy rights.
Cuenco said the committee will resume hearings on January 29.
Invited to appear are Resado’s wife, Rowena, and representatives of the Bangko Sentral ng Pilipinas (Central Bank of the Philippines) and Bureau of Internal Revenue.
INTERNATIONAL BUSINESS; The Philippines Moves Against Bank Secrecy
By MARK LANDLER
Published: October 13, 2001
Last month, the United States thrust this Asian country into an awkward spotlight, declaring that Muslim militants in the southern Philippines had financial ties to Osama bin Laden.
The Philippines has pledged to help the United States pursue the flow of money from Mr. bin Laden’s movement, Al Qaeda, to terrorist organizations here. The trouble is that the country’s strict laws on bank secrecy make it nearly impossible to trace the movement of money into local bank accounts.
”We are impeded by the law,” said Juan de Zuniga Jr., the general counsel of the Philippine central bank. ”We are almost sure the banks would not allow us to have access to suspicious accounts.”
Among the many collateral effects of the Sept. 11 terrorist attacks is a heightened scrutiny of cross-border money laundering. For developing countries like the Philippines, it is forcing a recognition that old laws are wholly inadequate against new methods of disguising illicit gains.
The banking law here was passed in 1955, a decade after the Philippines emerged from 400 years of colonial rule. As the country struggled to attract foreign capital, the law’s guarantee of confidentiality reassured potential investors that they could trust local banking institutions with their money.
Now, the Philippines has an established banking system. But the once-salutary law has helped turn the country into a haven for the laundering of proceeds from drug trafficking, kidnapping and gambling.
”Nobody knows the extent of money laundering in the Philippines,” Roberto Romulo, a former foreign minister, said. ”But in the context of transparency, we are hardly role models. We had to change our ways.”
On Sept. 30, the Philippines passed a law against money laundering, intended to address the deficiencies of the banking law. It requires banks to disclose suspicious deposits of more than four million pesos, or $80,000, to the authorities. Previously, banks did not have to disclose deposits of any amount unless investigators obtained a court order as part of a pending legal case.
”These are giant strides,” said Mr. de Zuniga, who helped draft the law. ”We have for the first time criminalized money laundering.”
Mr. de Zuniga said the Philippines was seeking to end a legacy of official corruption that extended from Ferdinand E. Marcos, the dictator accused of looting billions of dollars in the 1970’s and 1980’s, to Joseph Estrada, the former president toppled in a popular revolt last January.
Indeed, the Philippines is bowing to international pressure. The Financial Action Task Force on money laundering, a group convened by the major industrialized nations in 1989, had threatened to impose sanctions on Manila by Sept. 30 if it did not take steps to curb the practice here.
Four months earlier, the task force had put the Philippines, along with Russia and Nauru, on a list of countries making ”inadequate progress” in the global campaign against money laundering. The task force said it would hold off on sanctions while it studied the new law.
Critics say the Philippine Congress watered down the law. They note that the threshold amount for banks to disclose deposits is eight times that in the United States. Under American law, banks must disclose suspicious deposits of more than $10,000 to the Treasury Department.
The committee that drafted the legislation proposed setting the threshold at $20,000, twice the level in the United States. But in a heated debate, the House and Senate quadrupled that number.
Some say the lawmakers are protecting ethnic Chinese tycoons, who like to keep their finances under wraps, in part to reduce their tax bills. Many of these tycoons are generous campaign contributors.
Still, even critics acknowledge that the law will enable investigators to catch the most flagrant cases of money laundering. Mr. Estrada, a movie actor who became president in 1998, is a case in point.
During his impeachment trial in the Senate, prosecutors asserted that Mr. Estrada had laundered more than $8 million in proceeds from illegal gambling rings through various bank accounts.
Published: October 13, 2001
While backed by testimony from people involved in the scheme, the case against the former president was weakened because the banks did not release records of deposits made by Mr. Estrada or his associates.
Only when one bank, Equitable PCI, allowed a clerk to testify about the president’s use of an account under a fictitious name did the extent of his suspected wrongdoing become evident. Officials said that under the new law, the deposits into that account could have been easily traced by the authorities.
”It would have been labeled as a suspicious transaction because the identification on the account was not complete,” Mr. de Zuniga said. ”That would be a red flag under an anti-money-laundering program.”
Mr. Estrada’s impeachment trial was suspended, but his criminal trial on charges of plunder began here Oct. 1.
Despite its origins in domestic corruption, the new law may get its first test in the American-led war against terrorism. On Sept. 24, the Bush administration froze the assets of 27 organizations suspected of terrorism. Among those was a Philippine Muslim rebel group, the Abu Sayyaf.
Officials here acknowledge they have little clue where the group’s assets are. But the law gives them fresh tools. They said it was likely that terrorists would open accounts under aliases, or in the names of spouses. By having access to deposit records, the police have a better chance of tracking that money.
”If it comes through banks, there are several trigger points,” Mr. de Zuniga said. ”From the moment it enters the country, it can be flagged. Even if it is broken down into smaller amounts, it can be flagged.”
2. The Philippine Bank Sercrecy: A Primer
With recent events putting in issue the confidentiality of bank deposits and the identification process by the banks for their depositors, the Bangko Sentral ng Pilipinas, in coordination with the Bankers Association of the Philippines, deemed it advisable to come out with the following primer on frequently asked questions.
This primer seeks to clarify any misunderstanding or misapprehension that may have arisen on the subject and, more importantly, emphasizes that the secrecy of bank deposits remains sacrosanct and that their disclosure remains subject to strict safeguards and compliance with legal requirements. Trust accounts and other investments are partly included in the discussion.
A. Secrecy of bank deposits
Q. What guarantees on confidentiality do depositors enjoy under the law?
A. For peso deposits, Republic Act No. 1405 (Bank Deposits’ Secrecy Law) declares all deposits of whatever nature with banks in the Philippines, including investments in government bonds, as of an absolutely confidential nature and prohibits the examination or inquiry into such deposits or investments by any person, government official, bureau or office, as well as the disclosure by any official or employee of a bank of any information concerning said deposits.
There are only four (4) instances under the law where bank deposits or investment in government bonds may be disclosed or looked into, namely: (1) upon written permission of the depositor; or (2) in cases of impeachment; or (3) upon order of a competent court in cases of bribery or dereliction of duty; or (4) in cases where the money deposited or invested is the subject matter of the litigation.
It may be noted that RA 1405 covers not only bank deposits but also investments in government bonds.
For foreign currency deposits, Republic Act No. 6426 (The Foreign Currency Deposit Act) similarly declares that these deposits are of an absolutely confidential nature and cannot be examined, inquired or looked into by any person, government official, bureau or office whether judicial or administrative or legislative or any other entity whether public or private. There is only one instance for disclosure under said law and, that is, upon the written permission of the depositor. RA 6426 also exempts foreign currency deposits from attachment, garnishment, or any other order or process of any court, legislative body, government agency or any administrative body whatsoever.
For investments in trust accounts or in deposit substitutes, if these are in the form of investments in government bonds or deposits, the protection under RA 1405 and RA 6426 extends thereto accordingly. If these are in other forms of investments, the disclosure of information related thereto is covered by Section 55 of the General Banking Law of 2000 (Republic Act No. 8791) which prohibits, unless there is an order of a court of competent jurisdiction, the disclosure by any director, official, employee or agent of any bank any information relative to the funds or properties in the custody of the bank belonging to private individuals, corporations or any other entity.
Q. How do banks respond to an order of a competent court?
A. For peso deposits, banks comply with orders for disclosure in court cases subject to these requirements: (a) there must be a court order; (b) the order must be issued by a competent court specifically directing the bank concerned to disclose the required information; and (c) the bank should check and satisfy itself that the deposits or investment in government bonds being inquired into are either the subject of a case of bribery or dereliction of duty of public officials, or of a case where the deposit or investment itself is the subject matter of the litigation. If these requirements are not met, there would be basis for the bank to request the court to excuse compliance with the court order.
In impeachment cases, it is necessary that there be an order issued by the impeachment court or by its authorized officer. For foreign currency deposits, the law does not provide an instance for disclosure upon a court order. As mentioned above, there is only a single instance for disclosure under RA 6426 and, that is, upon written permission of the depositor. Thus, for foreign currency deposit accounts subject of a court order, the bank can invoke RA 6426 to excuse compliance.
Q. What is the liability of the banks and/or its officers and employees for violating the laws against disclosure?
A. Violations of the prohibitions against disclosures under RA 1405, RA 6426 and under the General Banking Law of 2000 are subject to stiff criminal penalties.
Under RA 1405, the offender is subject to imprisonment of not more than five years or a fine of not more than P20,000, or both, in the discretion of the court. Under RA 6426, the penalty is imprisonment of not less than one year not more than five years or a fine of not less than P5,000 nor more than P25,000, or both, in the discretion of the court. The violation of Sec. 55 of the General Banking Law of 2000, the penalty is imprisonment of not less than two years nor more than 10 years or a fine of not less than P50,000 nor more than P200,000, or both, in the discretion of the court; and in addition, if the offender is a director or officer of a bank, he is subject to suspension or removal by the Monetary Board.
B. Use of alias or number in opening deposit accounts
Q. Are banks allowed to open accounts using an alias or a number?
A. There is no specific banking law up to the present prohibiting banks from opening deposit accounts using an alias or a number. Prior to July 7, 2000, there is also no banking regulation providing for such prohibition. On July 7, 2000 and in seeking the adoption of anti-money laundering measures, the Bangko Sentral ng Pilipinas (BSP) issued a regulation, Circular No. 251, providing that, unless otherwise prescribed under existing laws, anonymous accounts or accounts under fictitious names are prohibited.
The exception referred to under Circular No. 251 was RA 6426 (The Foreign Currency Deposit Act) which explicitly allows the keeping of numbered accounts for the recording and servicing of deposits.
For peso accounts, when banks allow the opening of deposit accounts under pseudonyms, it is assumed that: (1) they have exercised due diligence to ascertain the identity of their clients; and (2) they are aware of the legal provisions and requirements on the use of pseudonyms.
The above notwithstanding, it may be pointed out that in the Manual of Regulations issued by BSP, or even before the issuance of Circular 251, there were already regulations requiring the banks to: (a) adopt systems to establish the identity of their depositors; and (b) require to set a minimum of three (3) specimen signatures from each of their depositors subject to regular updating. Even for numbered accounts as authorized under RA 6426, BSP has required banks, under Circular 258, to take necessary measures to establish and record the true identity of their clients, which identification may be based on official or other reliable documents and records.
Q. Are there other laws governing the use of pseudonyms or aliases?
A. Art. 178 of the Revised Penal Code penalizes the: (a) publicly using of a fictitious name for the purpose of concealing a crime, evading the execution of a judgment, or causing damage; and (b) concealment by any person of his true name and other personal circumstances.
On the other hand, there is also Commonwealth Act No. 142, as amended by Republic Act No. 6085 (Regulating the Use of Aliases) which provides that, except only as a pseudonym for literary purposes and athletic events, it is unlawful for any person to use an alias, unless the same is duly recorded in the proper local civil registry. Related thereto, Articles 379 and 380 of the Civil Code provide that no person shall use different names and surnames except the employment of pen and stage names provided it is done in good faith and there is no injury to third persons.
What can be noted is that the above provisions allow the use of aliases under certain circumstances. Conversely stated, the use of aliases is not absolutely disallowed. Moreover, the sanctions for any violation of the above provisions on aliases are mainly directed to the one using the unauthorized alias.
Q. How does Circular No. 251 apply to existing numbered accounts?
A. For peso accounts, the banks should have their respective programs of compliance with the Circular. For foreign currency deposit accounts, they are allowed to continue maintaining numbered accounts opened in accordance with RA 6426 subject to the requirement that the banks shall take necessary measures to establish and record the true identity of their clients.
Q. What penalties/sanctions are applicable for violating the laws/regulations?
A. Article 178 of the Revised Penal Code is directed to the person concealing his identity publicly or using a fictitious name and the penalty would range from one day up to six months imprisonment and/or a fine up to P500,000. For violation of Commonwealth Act 142, which is likewise directed to the person using an unauthorized alias, the penalty is imprisonment from one year to five years and a fine of P5,000 to P10,000. For the violation of Circular 251, it is subject to the administrative sanction on the bank and/or responsible directors/officers of fine up to P30,000 per transaction.
C. Continued confidentiality/secrecy of deposit transactions
Q. Is confidentiality/secrecy of deposit accounts compromised with the issuance of Circular 251?
A. No. Circular 251 merely disallowed the opening of fictitious and anonymous accounts and has not in any way modified nor lessened the safeguards and protection to depositors under RA 1405. This means that, notwithstanding Circular 251, deposit accounts cannot be examined or looked into except under the limited circumstances provided for in RA 1405.
Q. Why are the BSP and the BAP advocating the amendment to bank secrecy laws?
A. The proposal of BSP and BAP is for access to deposit accounts only under exceptional circumstances, such as deposits only above the P50-million level and in relation to the commission of serious offenses like racketeering and illicit drug trade. Except for these instances, depositors and those with legitimate transactions remain protected under RA 1405. The objective of the proposal is to institute this measure as an anti-money laundering campaign so as to delete the Philippines as a non-cooperative country in the list of the Financial Action Task Force against money laundering.
MANILA, Philippines – Former Agriculture Undersecretary Jocelyn “Joc-Joc” Bolante admitted on Tuesday that he withdrew a “small” amount from some of his bank accounts which were ordered frozen by the Anti-Money Laundering Council (AMLC).
During the resumption of the Senate investigation into the P728-million fertilizer fund mess, Bolante made the admission but declined to disclose specific details of the transactions.
“Maliit lang (Just a little)… I’m sorry I cannot disclose the specifics,” Bolante said.
When asked if he withdrew the amount from the bank after the account was unfrozen, Bolante said replied in the affirmative.
Bolante’s answer prompted AMLC executive director Vicente Aquino to inform those at the hearing that the bank where Bolante made a withdrawal may face sanctions for allowing the withdrawal, saying the Anti-Money Laundering Act requires official confirmation from the AMLC for any such withdrawal.
“May possible liability ang bank for not getting official confirmation from AMLC (The bank faces a possible liability for not getting an official confirmation from AMLC),” Aquino said.
Aquino admitted that such information is covered under the Bank Secrecy Act, and it is up to Bolante as the account owner to disclose it.
During the hearing, Sen. Panfilo Lacson expressed dismay over the situation, saying: “Talong-talo ang gobyerno rito. Ang bank secrecy act dapat ma-amend (The government is one big loser here. The bank secrecy law needs to be amended).”
This, as he pushed for the exclusion of government officials from the Bank Secrecy Act.
“(I had filed) an amendment to the Bank Secrecy Act, all government officials and employees should have automatically waive their rights once they are in government. That will solve a lot of problems of corruption in this country. Unfortunately wala ni isang hearing sa committee level for three Congresses I have been filing (not even one hearing was held for it in the three Congresses I filed it),” Lacson said.
He asked Senate president Juan Ponce Enrile to include his bill in the list of priority measures, now that they are in the majority bloc.
Lacson also pointed out that when he was being “vilified” in 2001 by then Armed Forces intelligence chief Victor Corpus, he waived his right to bank secrecy.
Enrile, for his part, said it was a “good proposal” but it needs study to make sure it is not used for harassment.
“My bill involves government officials and employees while in government service,” Lacson said. – GMANews.TV
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Senate seeks lifting of Bank Secrecy
The Senate led by Senate President Juan Ponce Enrile pressed yesterday for the immediate amendment of Republic Act 9160 (Anti-Money Laundering law) to lift secrecy on bank deposits following the controversial P728 million fertilizer fund scam.
The amendment, Enrile said, is needed to arrest criminality in the country, particularly on the unabated illegal drug industry, corruption and other illegal activities.
Yesterday, opposition Sen. Panfilo M. Lacson filed for the third time in three years his bill seeking to amend the law.
Sen. Richard J. Gordon, chairman of the Senate Blue Ribbon committee, said he is now terminating the committee hearing on the fertilizer scam with various proposed recommendations foremost of which are proposed amendments to the AMLC law.
Lacson complained that, based on the current provisions of the AMLC law, the government is at the losing end in the fight against criminality, terrorism and terrorism financing, trafficking in human beings and migrant smuggling, sexual exploitation of children, corruption and bribery, illicit arms trafficking, currency counterfeiting, forgery and environmental crime.
The filing of the bill came after controversial former Department of Agriculture (DA) Undersecretary Jocelyn ‘’Joc Joc” Bolante told senators in yesterday’s public hearing by the Gordon committee that he was able to withdraw a part of his four bank accounts earlier frozen by the Court of Appeals.
The testimony of Bolante, who continues to face senators following allegations that he is the architect of the fertilizer fund scam that preceded the May 2004 presidential elections, surprised Gordon and Vicente S. Aquino, executive director of the AMLC secretariat.
Bolante said he was able to withdraw a small portion of his bank account after the court had lifted its freeze order.
Pressed by Lacson, Bolante refused to disclose the amount he was able to withdraw and the specific bank because of the Bank Secrecy Law.
The former Philippine National Police (PNP) director-general had filed a bill that those entering the government service should waive their right to invoke the Bank Secrecy law but Congress has not acted on it favorably.
Aquino said he is supporting the Lacson bill because the ALMC cannot examine bank accounts that are criminally-tainted because the ALMC law is mandated to give advance notice to depositors on the release of questioned bank deposits based on the Eugenio decision of the Supreme Court.
This led Aquino to blurt out that the unspecified bank that allowed Bolante to withdraw his deposit has violated the law.
He stressed that he had asked the President of a bank association to remind its members to seek the approval of AMLC before allowing withdrawals of questionable bank accounts.
Aquino earlier assured Gordon that Bolante could not withdraw his four bank accounts because the bank needs clearance from the AMLC although the Court of Appeals lifted last Dec. 10 its freeze order on 23 questionable bank accounts. Bolante maintained that he only has four bank account covered by the CA freeze order based on the petition of the AMLC.
He also denied an allegation of a senior official of the Blue Ribbon committee officer as submitted to Gordon that he (Aquino) notified the banks that they could now release the deposits of Bolante after the freeze order had been lifted. ‘’I never misled anyone,” he added.
Aquino said there was never a lapse on the part of the council as he has already recommended the filing of civil forfeiture cases.
He confirmed that he wrote the banks last Jan. 5 that the freeze order has already expired and they should now be guided accordingly.
‘’It means they should be guided by the rule or that they should ask for confirmation from AMLC before releasing the accounts. We complied with the rule,” he added. ‘’The bank account (of Bolante) is still intact,” he added.
Solicitor General Agnes Devanadera assured the senators that her office has, under the law, done its job on bank account preservation.
Enrile, a taxation expert, asked Aquino to specify the weaknesses of the AMLC law, particularly on its operations, to arrest problems in the country.
The law creating the AMLC ‘’is not a real law because it is liable to be breached, than obeyed,” Enrile said.
Enrile said there is a need to revisit the AMLC law ‘’not to oppress people but to arrest criminality in the country such as the (illegal) drug industry, any other illegal activities and corruption.”
He cautioned his colleagues that crafting a policy to lift secrecy on bank accounts should now endanger any sector of society or used to harass people.
Gordon noted that the AMLC law ‘’can be pierced’ ‘by inaction of government agencies such as the Office of the Ombudsman which has not acted upon the recommendations of the Senate agriculture committee then chaired in succession by Senators Ramon B. Magsaysay Jr. and Joker Arroyo 1,020 days ago that Bolante and others should be criminally charged because of the P728 million fertilizer fund scam.
He said the current AMLC law should now be altered because the AMLC cannot reveal its investigation in congressional hearings and that the current six-month freeze on questionable bank deposits should be lengthened.
AMLC, according to Aquino, also lacks manpower and is crippled by a string-bean budget.
Gordon emphasized that government, in furthering its investigation into allegations of money laundering, should be given the power to seize high-profile assets of depositors such as yachts or cars like Bolante’s expensive Porsche sports car.
The Lacson bill stated that the AMLC should be allowed to retain 25 percent of the forfeited assets not only as an incentive to intensify the drive to file more civil forfeiture cases for the State, but also to ameliorate AMLC’s budget.
Early passage of the bill, according to Lacson, would guarantee the Philippines’ recognition to the global efforts against money laundering.
Swine loan scammers cannot hidebehind bank secrecy law: Escudero
BY JP LOPEZ
OPPOSITION Sen. Francis “Chiz” Escudero yesterday belied the claim of Malacañang that the Quedan and Rural Credit Corp. (Quedancor) could not publish the names of its borrowers because of the bank secrecy law.
Escudero said the bank secrecy law covers only deposits and not loans.
An anomaly involving the Quedancor was made public by lawyer Harry Roque who said the Commission on Audit has discovered that at least P1.4 billion of the P2.5 billion that Quedancor released for the swine industry remains unliquidated. He said the farmers who supposedly received hogs were paid P200 to P300 to sign papers that indicated they received the livestock.
Escudero has asked Quedancor to publish the names of the borrowers. But Apostol, invoking the bank secrecy law, said Quedancor “would be liable to borrowers if it publishes their names without their permission.”
“Bank secrecy law covers deposits. Quedancor is not a deposit-taking institution. It is a non-bank financing institution. Only banks are allowed to use deposit instruments,” Escudero said.
R.A. 1405 (Bank Deposits Secrecy Law) states that all deposits of whatever nature with banks in the Philippines, including investments in government bonds, are absolutely confidential in nature. It prohibits the examination or inquiry into such deposits or investments.
Escudero said Quedancor could not hide behind the bank secrecy law. “All I’m asking for is to make public the list of borrowers. What was used in this program is public funds and is therefore subject to public accountability. The public has the rightful claim to information on where our taxes go,” he said.
Escudero said the loans are automatically subject to government audit because they are government funds.
He asked what the COA, the primary institution in charge of examining proper use of public funds, is doing. “If they have already audited Quedancor, we also want to see their findings and recommendations,” Escudero said.
Sen. Panfilo Lacson earlier called for an investigation.
He said President Arroyo might have a direct hand in it because it coincided with the 2004 presidential elections, the year the supervision of the financing agency was transferred to the Office of the President from the Department of Agriculture.
Escudero also expressed the same apprehension that the swine-raising funds could have been diverted to the administration campaign fund for the 2004 polls.
He said the publication of the list of delinquent borrowers would remove speculations the fund was pocketed by corrupt officials or was diverted to the administration’s campaign chest.