Mar 28, 2012

Philippines - PH Fails In Counter-Terrorist Financing Commitment


MANILA, Philippines — The Philippines has failed to address enforcement and implementation deficiencies on anti-money laundering/counter-terrorist financing (AML/CTF), an annual report recently submitted by the State Department to the United States Congress revealed.

In Volume II of the 2012 International Narcotics Control Strategy Report, it was pointed out that the Philippine government foundered in its commitment to pass legislation that would address structural deficiencies, particularly criminalizing money laundering and implementing adequate procedures to identify and freeze terrorist assets and bank secrecy in December, 2011.

Other important amendments that need to be introduced in the prevailing Anti-Money Laundering Act (AMLA) or Republic Act 9160 include enhancing financial transparency and extending suspicious activity reporting requirements to additional entities.

"The GOP (government of the Philippines) should criminalize terrorist financing as a stand-alone offense," the report stressed adding that legislation pending in the Philippine Congress would address cited deficiencies.

The failure of the government to amend the AMLA has landed the country in the list of nations described to be one of the 66 major drug laundering havens in the world. Recognizing the importance of correcting this, President Benigno S. Aquino III has pushed for the passage of a law to address these deficiencies.

According to the report, investigations by the financial intelligence unit (FIU) continue to be constrained by limited authority to access bank information.

"Except in instances of serious offenses such as kidnapping for ransom, drugs and terrorism-related activities, the FIU is required to secure a court order to examine bank deposit accounts related to unlawful activities enumerated in the Anti-Money Laundering Act (AMLA)," the report stated.

In addition, the report said that a Supreme Court ruling prevents ex parte inquiry into bank accounts even though the FIU can, however, seek an ex parte freeze order from the Court of Appeals before seeking authorization to inquire into bank deposits.

"The Government of the Philippines should enhance the FIU’s access to financial records, and ensure it can rapidly freeze terrorist assets," the US State Department report declared

This recommendation came to fore as the report noted that FIU also must obtain a court order to freeze assets, including those of terrorists and terrorist organizations placed on the United Nations 1267 Sanctions Committee’s consolidated list and the lists of foreign governments.

The report emphasized that this requirement is inconsistent with the international standard, which calls for the preventative freezing of terrorist assets “without delay” from the time of designation.

At the same time, the report noted that terrorist financing is not a stand-alone offense under Philippine law and therefore not a predicate crime under the AMLA.

"A person who finances the commission of terrorism may be prosecuted as a terrorist either as a principal by inducement pursuant to Article 17 of the Revised Penal Code or as an accomplice pursuant to Section 5 of the Human Security Act," it pointed out.

ROY C. MABASA
mb.com.ph



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