Philippine president Benigno Aquino Jr. has signed Republic Act No. 10365, effectively expanding the coverage of the country’s Anti-Money Laundering Act. The expanded law, which saw numerous amendments before President Aquino put his signature to it, now includes bribery and corruption, malversation of public funds and terrorism, swindling, fraud and illegal exactions and transactions; forgeries and counterfeiting, and trafficking in persons.
The Philippine government’s decision to amend its anti-money laundering law came after pressure from the Financial Action Task Force (FATF) who threatened to blacklist the Philippines if it didn’t act on expanding the coverage of the law and impose stronger scrutiny on potential dirty money coming into the country. Inclusion in the FATF’s blacklist would characterize the Philippines ‘non-cooperative’ in the global fight against money laundering and terrorist financing.
Despite including a number of offenses in the scope of the anti-money laundering law, the newly signed bill doesn’t include tax evasion, as well as Philippine casinos and Internet gaming, the latter two of which, as a result, will not be required to submit regular reports of covered transactions to the Anti-Money Laundering Council (AMLC).
According to Senator Teofisto Guingona III, the exclusion of casinos from the scope of the law’s reach creates a loophole that the FATF can point to for further revisions. Senator Guingona did point out that the law could still be amended in the future should there be a need to address whatever shortcomings it may have in its current state.
Meanwhile, Senate president Juan Ponce Enrile told reporters last week that the decision to exclude casinos in Internet gaming from the scope of the amended law comes as a result of circumstances that could dampen the country’s pursuit of establishing itself as a prime gaming destination in the Asian region.“We have produced enough compliance with the requirements of the FATF,” Enrile explained, before adding that “we have to go slowly since some other countries have different circumstances”.
However, he said that the compromise on this was necessary in order to have the law approved before the FATF’s plenary session on Feb. 18.
As reported by the Philippine Star, the law covers a host of institutions that have been placed under the AMLA, including foreign exchange dealers, pawnshops, money changers, remittance and transfer companies and other similar entities, as well as pre-need companies and jewelry dealers in precious stones and metals for transactions in excess of Php1 million.
In addition, company service providers that provide services to third parties are also covered under the amended law. These include those acting as a formation agent of juridical persons; acting as (or arranging for another person to act as) a director or corporate secretary of a company, a partner of a partnership, or a similar position in relation to other juridical persons; providing a registered office, business address or accommodation, correspondence or administrative address for a company, a partnership or any other legal person or arrangement; and acting as (or arranging for another person to act as) a nominee shareholder for another person.
Likewise, any person who manages client money, securities or other assets; management of bank, savings or securities accounts; organization of contributions for the creation, operation or management of companies; and creation, operation or management of juridical persons or arrangements, and buying and selling business entities, are also now included under the newly-signed bill.
Should any bank and/or individual be caught breaking this law, these institutions, particularly its directors, officers, or personnel who knowingly participated in the crime, would receive harsh penalties, including a prison sentence of around four to seven years to go with a fine of not more than 200 percent of the value of the monetary instrument or property laundered.