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DOF: ‘Funds passport’ to foil smuggling, laundering

/ 04:13 AM October 17, 2014

MANILA, Philippines–The Philippines is pushing for the establishment of a “funds passport,” which the Department of Finance (DOF) said would help combat tax deficiencies across borders.

Finance Secretary Cesar V. Purisima told delegates of the 44th International Association of Financial Executives Institutes (IAFEI) World Congress that the creation of a passport for funds “would make global recovery more sustainable and … make the Philippines’ own financial sustainability more of a reality for a longer time.”

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Purisima later told reporters that a passport for funds would help boost the fight against tax evasion, smuggling, as well as illicit movement of funds.

Similar to ordinary passports that people use when moving across boundaries, funds passports are necessary as global financial markets open up, Purisima said.

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“When people cross geographic boundaries, you need a passport so that you can properly manage the flows of the people. The same is true in a globalized financial environment. We need to manage the flows of funds,” he explained.

The Finance chief said a funds passport ideally should have three components: A convention on standardized tax identification numbers; mutual recognition; and information sharing.

Purisima added that a funds passport would be complementary with anti-money laundering initiatives.

“If we have a passport for funds, money laundering, tax evasion and smuggling can be a thing of the past,” he said.

Purisima is pitching this mechanism to multilateral organizations, including the Asia-Pacific Economic Cooperation (Apec). Next week, Purisima will join other finance ministers of Apec’s member-economies in China for a meeting.

A recent economic cost-benefit analysis on a potential “Asia Region Funds Passport” made by Apec’s Policy Support Unit showed that the establishment of such a mechanism would likely generate many new jobs, as well as “channel more of the region’s savings into investments that promote economic growth and prosperity, at lower cost.”–Ben O. de Vera

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TAGS: Cesar V. Purisima, Finance, funds passport, money laundering, Smuggling
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