Philippines acts on money laundering

The Abu Sayyaf has carried out abductions and eluded troops

By Rufi Vigilar
CNN

MANILA, Philippines (CNN) -- Philippine President Gloria Macapagal-Arroyo has signed a law against money laundering, hoping to stall banking sanctions and give teeth to anti-terrorist efforts.

Arroyo beat a September 30 deadline by the Paris-based Financial Action Task Force (FATF) to pass such a law.

But there is no certainty that the Philippines will avoid sanctions by members of the FATF, which still has to examine in a February plenary session next year what critics call a "railroaded" law.

The Senate and the House of Representatives worked through Saturday to reconcile their respective versions of the Anti-Money Laundering Act of 2001.

The Senate passed its version of the bill only on Friday, after the House of Representatives completed its own earlier in the week.

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Lawmakers admitted that they had needed more time to refine their respective bills, earlier predicting that they would not be able to meet the September 30 deadline.

The FATF, established by the world's industrialized countries in 1989, has tagged the Philippines as a "non-cooperative country" in global efforts to stem money laundering.

The Philippines has been pressured into creating an anti-money laundering law, with U.S. banks earlier this month tightening checks on remittances of Filipinos in America.

The Philippines' new law meets certain requirements of the FATF, mainly "criminalizing" money laundering.

The law penalizes those whose funds are obtained through various crimes, notably crimes whose incidence had worsened in recent years, like kidnapping, drug-trafficking, illegal gambling, and smuggling.

Hijacking was also included in the crime list, as were graft, plunder, extortion, piracy, theft, swindling, violations under the E-commerce Act, arson and murder, securities fraud, and "felonies of similar nature under the penal codes of other countries."

Banks monitor

Congressman Carlos Padilla said the law still "does not have enough teeth" but added that the law at least hangs like "a sword of Damocles."

There have been many anti-war and anti-terrorism protests in the Philippines

An Anti-Money Laundering Council, which will be set up to monitor banks and probe suspicious accounts, can "act in behalf of requests of foreign states," Presidential spokesman Rigoberto Tiglao said.

An oversight committee in Congress will also be set up to safeguard confidentiality and guard against harassment, particularly during an election period when candidates are awash with cash.

Bank accounts of "more than four million pesos," or about $77,980, are subject to the law.

Violators face a maximum penalty of 14 years' imprisonment and a fine of three million pesos, or about $58,480.

The law also cracks down on malicious reporting, with a penalty of six months' imprisonment and a fine of up to 500,000 pesos, or about $9,750.

The Philippine government had needed an anti-money laundering law to investigate organizations suspected of terrorist links abroad.

Anti-terrorism

Arroyo recently directed the Securities and Exchange Commission to identify organizations suspected of using accounts to channel funds for Muslim separatists in the south.

Arroyo's order was part of a domestic anti-terrorist strategy supporting a United Nations resolution and U.S.-led coalition against the September 11 attacks on New York and Washington.

One suspected organization is the International Islamic Relief Organization, which allegedly channels funds from Saudi dissident Osama bin Laden to the Abu Sayyaf and the Moro Islamic Liberation Front (MILF).

The United States has listed the Abu Sayyaf, based in Basilan, some 900 km (560 miles) south of Manila, as one of more than 20 terrorist groups with international links.

The Abu Sayyaf has carried out three abductions since May 27 and still holds more than a dozen hostages, including American missionary couple Martin and Gracia Burnham.

The guerrilla group has beheaded 10 hostages and claim American tourist Guillermo Sobero has suffered the same fate.

The Philippine government is in peace talks with the MILF, persuading it to give up armed rebellion for autonomy. But skirmishes have continued despite a bilateral ceasefire.