Senate eyes repeal of bank secrecy law

THE country’s existing banking laws are so strict that it’s proving to be an impediment for those investigating alleged suspicious accounts, such as in the case of the alleged undeclared 35 bank deposits of Comelec Chairman Andres Bautista in Luzon Development Bank (LDB). 

Senate probers were made to realize this as they attempted to look into allegations hurled at Bautista by his estranged wife Patricia on the said accounts that reportedly totaled to P329 million, supposedly amassed by the poll executive within the last two years or since the time he assumed the position in the Comelec. 

 

Bank Secrecy Law

Under intense consideration for repeal is the bank secrecy law which the senators have deemed is being used by concerned subjects to muddle investigations and evade prosecution.

“Malaking hadlang talaga ang bank secrecy law at gaya ng nasabi ko kanina, dalawang bansa na lamang sa mundo ang may bank secrecy law, Pilipinas at Lebanon. Siguro hindi maganda na mapabilang ang Pilipinas doon” Sen. Francis “Chiz” Escudero chairman of Senate banking and finance committee said.

He added that they are now moving to repeal bank secrecy law so as to stop it from being used as a shield during investigations.

Sen. Escudero said they will have to discuss if there is a need to issue a subpoena to trigger the legal process in the event that banks invoke the bank secrecy law to cover up for their clients in this case Chairman Bautista.

 

AMLA Provisions

Provisions of the revised implementing rules and regulations of the Anti-Money Laundering Act (AMLA) state that “when reporting covered or suspicious transactions, covered persons and their offices and employees are prohibited from communicating directly or indirectly in any manner or by any means to any person or entity or the media’.

They continued with “the fact that a covered or suspicious transaction has been or is about to be reported, the contents of the report or any information in relation thereto, any information about such reporting shall not be published or aired in any manner or form by the mass media or through electronic mail or other similar devices. In case of violation thereof, the concerned officer or employee and the media shall be held criminally liable.”

Majority Leader Vicente Sotto III, in inquiring Anti-Money Laundering Council (AMLC) officer in charge (OIC) and executive director Atty. Mel Georgie Racela whether such would apply even in inquiries by the Senate committee on banks, financial institutions and currencies, was told that criminal liability does not include the upper chamber panel. 

“It says nothing there that says that Philippine Congress or Philippine Senate. Perhaps you’re lumping us into the entity, is that right?” Sen. Sotto asked to which he was given an affirmative answer. 

“That’s one of the sections that we’re going to repeal in the AMLA,” the lawmaker said. 

Sen. Sotto along with Sen. Panfilo Lacson filed last Aug. 17 Resolution No. 468 the matter concerning Bautista following the reported execution of an affidavit by Patricia last Aug. 1, alleging that the Comelec chair has undeclared assets. 

 

35 LDB Accounts

Among the allegations against the Comelec chair was the supposed existence of his 35 LDB accounts, said to be under his name and some in joint his family members. 

Allegedly, according to Patricia’s affidavit, “the substantial deposits and withdrawals on each of these bank accounts were made within the last two years” and that “most of the deposits were made below the P500,000 threshold probably to avoid any AMLC detection. The deposits and withdrawals were made almost every day as if in distinct order.” 

 

A Second Look

“Because of these allegations, Sen. Lacson and I, authored the resolution (because we) believe that the AMLA deserves a second look and if it’s being executed or implemented properly,” Sen. Sotto said. 

Under the AMLC rules, banks and other covered financial institutions are required to flag transactions in cash or other equivalent monetary instrument exceeding P500,000 five to 15 days from occurrence. 

Bautista had said that most of his assets belong to his sister, brother and parents. 

 

Suspicious Transaction Reports

LDB president David Sarmiento told senators during the hearing Wednesday that the bank has submitted suspicious transaction reports (STRs) but could not just yet divulge information. 

This prompted Sen. Grace Poe to ask the committee chaired by Sen. Francis “Chiz” Escudero to summon in the next hearing the poll executive. 

But even if the committee subjects Bautista to a grilling, it would not suffice to have him “open” up and testify on the said accounts or make it public. 

Even if he agrees to sign a waiver for the opening of his accounts which he publicly announced that he’s willing to do, BSP and other bank officials told senators it’s not his sole discretion especially if it involves joint deposits. 

The waiver should entail the consent as well of Bautista’s relatives in the joint accounts. 

“The waiver of one of the deposits is enough but because of the uncertainty of the law, we strongly suggest that the waiver of all the depositors consent because this is an open question in law for which we may be criminally held liable by the courts,” Atty. Francis Lim, LDB legal counsel said. 

 

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Monday, 11 December 2017
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