No haven for launderers (2)

published 1 Dec 2008, MST

Blurb: Partnership is the operative word.

Last week, I wrote about the basic concepts pertaining to the fight against money laundering in the Philippine setting. I referred to provisions of the law and lifted some items from the October 2008 accomplishment report of the secretariat of the Anti-Money Laundering Council. We learned that since the council's creation in 2001, there have been more than 130 million reports of covered transactions (these include all banking transactions that exceed P500,000 in one banking day) and 22,609 reports of suspicious transactions. We also discovered that the number of reports of suspicious transactions has increased, from an average of 22 per month in 2002 to 434 in 2008.

I also quoted the executive director of the secretariat, Atty. Vicente Aquino, as saying that taxpayers' money is “well and wisely spent” in the upkeep of his agency. Let's find out more, and then gauge whether it is reasonable to take comfort in these words

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Upon establishment of probable cause, the council can seek the freezing of monetary instruments or properties, without notice to the other party, before the Court of Appeals. The CA then issues a freeze order on said assets, which will be good for 20 days. Cumulatively, P1.4 billion worth of assets have been frozen by the court.

Presently, there are 13 pending applications for freezing and another 3 for extension of the freeze order. The CA can grant extensions to the freeze order for another 6 months. During this time, the council, through the secretariat, is expected to file with the courts an action for civil forfeiture. This is an effort to recover the money from the frozen accounts (mother account and the web of accounts that branch out from the mother account) without first securing the arrest of the money launderer.

Aquino explains that the crime of money laundering is distinct from the predicate crimes (we enumerated these last week) because of their different elements. He says that while most law enforcers are bound to go after the criminal, his office is more concerned with immobilizing that criminal by seizing his funds. The work is three-fourths done then, he explains, because without the money, the launderer cannot flee, or hire the best lawyers to defend him, or even bribe officials who could influence the outcome of his prosecution.

After civil forfeiture, the money is returned to the victims – to the families who paid ransom, for instance, or to investors who have been tricked. To date, P965 million have been unfrozen and returned.

One of the items on display in Aquino’s office is an odd-looking head accessory. “It's a bobby hat,” he explains. “It was given to us by the UK government in 2004, when we helped repatriate $750 thousand in dirty money to the authorities.” In 2005, another $118,376 was repatriated to the United States in 2005. The council also assisted the Northern Ireland Police in investigating a terrorist financing case against a Filipino national in 2004.

“Partnership,” Aquino says, is an operative word in the council. The secretariat can make requests for assistance from domestic agencies like the National Bureau of Investigation, Philippine National Police, Office of the Ombudsman, Department of Social Welfare and Development (some use humanitarian and charitable fronts for their sleazy deeds) and trial courts. It can also go the other way around. Since the council's creation in late 2001, it has received 296 requests from these domestic partner agencies; on the other hand, it has made 1,583 requests to these organizations.

Likewise, there is international cooperation in the fight against money laundering. The council has received 315 requests for assistance from foreign jurisdictions. Conversely, it has made 174 requests from the international community. The Philippines is also a member of the Egmont group, Aquino says, which is a group of 108 countries exchanging financial intelligence information, noting fund movements and other developments (not necessarily prosecuting all of them – yet) in their jurisdictions 24/7.

There used to be a time when the Philippines was in the black list of the Financial Action Task Force, the inter-governmental body tasked to combat money laundering and terrorist financing, and our removal from that “dirty” list in February 2005, was cause for celebration. The Paris-based agency required that a law be in place, that there be an agency or institution to implement the law and discharge operations, and that these efforts be effective. Ultimately, it's the results that matter.

“Effective,” of course, is always relative. A country's performance can be evaluated by comparing it to other countries' progress. Or the number of cases prosecuted, much less resolved, in its own jurisdiction, versus the actual number of reports received. Or the amount of money classified as dirty, frozen and seized. Or the prominence of the personalities hauled off to justice. Or mere perception of the people, based on the attention given my media to efforts, or results, if any, delivered by that agency.

How does the Philippine AMLC fare in all these? Is the title of this column, “No haven for launderers,” more a statement of fact or an articulation of an aspiration?

To be concluded next week.