Money launderers turn to ‘dry cleaning’

MANILA, Philippines—Creative ways of “dry cleaning” instead of merely laundering stolen money have urged senators to eye the expansion of the list of institutions required to report purchases and other transactions involving P500,000 and above.

“It looks like from simply money laundering, [crooks] are now resorting to dry cleaning them, too,” said Senate blue ribbon chair Teofisto Guingona III at Friday’s meeting of the Global Organization of Parliamentarians Against Corruption (Gopac).

The government is feeling pressure from the global-based Financial Action Task Force (FATF) to sign into law three measures including one (SB 3123) that would require casinos, foreign-currency changers, real-estate agents and jewelers to report transactions of clients in the P500,000-and-above range to the Anti-Money Laundering Council by May.

“This is in recognition of the fact that money nowadays is not only laundered through banks but also through a whole gamut of institutions,” Guingona explained.

Tighten the noose

The measures are meant to address new forms of money laundering and terrorist financing.

Unless the Philippines would have these new laws by May, it would join the FATF’s blacklist. Inclusion means sanctions such as the submission of more documentary requirements before an overseas Filipino worker can remit money to loved ones back home.

Guingona said expanding the list of institutions required to report huge transactions is necessary to “tighten the noose on those using the formal banking system to launder ill-gotten funds, [who] have begun to look at other tools in which they can park such funds.”

There are concerns, however, whether the Senate would still be able approve the measures, considering its focus on the impeachment trial of Chief Justice Renato Corona.

SB 3009 would allow the Anti-Money Laundering Council to look into the bank accounts of a suspected launderer without having to inform him as presently required.

Problematic

SB 3127 criminalizes transactions that would benefit terrorist organizations.

Sen. Edgardo Angara told the forum that while the last two measures are ready for discussion in plenary, the one that requires more institutions to report huge transactions “seems to be the more problematic,” given the Senate’s impeachment schedule.

Guingona said he anticipates that SB 3123 would inspire more scrutiny by senators since more businesses would be affected by requirement to report.

“Each senator will ask his own clarificatory questions because there would be more industries that will be affected.  We expect the deliberations to take time,” he told the Inquirer.

Both senators assured that the Senate would manage to approve the three bills in May.