Philippines to move against 'dirty' money

CNN -- The Philippine government says it will commit to improve anti-money laundering laws in the wake of sanctions being proposed by foreign banks.

The Philippine Central Bank will ask Congress to pass legislation that would remove the Philippines from an international blacklist of havens for money laundering.

Its omnibus anti-money laundering bill would also classify ransom payments as laundered money.

The move comes on the heels of a report by the Paris-based Financial Action Task Force (FATF) which identified the Philippines as a haven for money laundering.

The FATF has threatened to impose sanctions on the Philippines, along with Indonesia, Russia and several island nations including Nauru, from September 30 unless it starts taking tougher measures to address identified money laundering concerns.

It has recommended other measures including stepped-up surveillance and reporting of financial transactions.

Paying special attention to some transactions

The FATF has also called on its economic allies to ask their financial institutions to pay special attention to businesses and transactions with persons, companies and financial institutions in "non-cooperative countries and territories."

The countries and territories in FATF's updated list of money laundering havens are: Cook Islands; Dominica; Egypt; Guatemala; Hungary; Indonesia; Israel; Lebanon; Marshall Islands, Myanmar; Nauru; Nigeria; Niue; Philippines; Russia; St. Kitts and Nevis; and St. Vincent and the Grenadines.

The organization has also removed the Bahamas, the Cayman Islands, Lichtenstein and Panama from its list of NCCTs

Philippine Central Bank Governor Rafael Buenaventura said that an anti-money laundering bill has already been prepared, but was derailed by the local and congressional polls in May.

Congress is expected to tackle the law when it begins it first session this month.

Earlier this year, the central bank set up a task force to investigate suspicious banking transactions.

However, Finance Secretary Isidro Camacho lamented that the central bank does not have power to look into dubious accounts, adding that the rules and regulations "lack teeth."

Money laundering haven

Many analysts consider that the impending trial of deposed Philippine leader President Estrada will show the country's lack of effective laws to crack down on money laundering.

Estrada was arrested and jailed following his ouster, on charges of corruption and economic plunder. Plunder is a non-bailable offense and is punishable by death.

Estrada is due to be arraigned in Manila Wednesday.

During his aborted impeachment trial, Estrada was accused of stashing $200 million in several banks using fictitious names.