Anti-laundering law ‘enough’ to deter dirty money

Bank supervision in the Philippines is strict enough to help ensure unscrupulous individuals and terrorist groups are not able to launder money in the country, the Bangko Sentral ng Pilipinas has assured in the wake of a controversy involving a US branch of Standard Chartered Bank.

BSP Deputy Governor Nestor Espenilla Jr. said the regulator has a unit—called the Anti-Money Laundering Specialist Group—focused on supervising bank operations for the purpose of guarding against potential money laundering activities.

“All our banks are closely supervised for anti-money laundering compliance,” Espenilla told the Inquirer.

He said the BSP unit is in addition to the inter-agency Anti-Money Laundering Council (AMLC), which is mandated to help prevent money laundering and to go after individuals and groups guilty of such activity.

“In addition to the AMLC, the BSP ensures bank compliance to [anti-money laundering laws] as part of normal supervision,” Espenilla added.

He gave the statement when asked about his assessment of the ability of regulation in the country to prevent money laundering activities, which normally transpire through banks.

Money laundering is the act of making “dirty money,” or funds that come from illegal activities, appear to have come from legitimate sources.

Talks about money laundering heightened globally amid allegations by US regulators that the New York branch of Standard Chartered helped launder $250 billion worth of dirty money from Iran.

The bank has denied the accusations.

Under the Philippines’ Anti-Money Laundering Act, banks are required to report to authorities any transaction that involves movement of at least P500,000.

In June, the Financial Action Task Force (FATF), an international body against money laundering, upgraded the Philippines from the “dark gray” to the “gray list” after Congress passed key amendments that tightened the Anti-Money Laundering Act.

In particular, the amended version no longer requires the AMLC to notify a suspect that his bank account is being investigated. Moreover, the stricter law criminalizes the extension of financial support to terrorists.

Prior to the passage of the stricter version of the law, the Philippines was facing threat of being placed in the FATF’s black list of countries that are not cooperating in the global fight against money laundering and terrorist financial.

Being in the dark gray list indicates lack of progress in efforts to improve anti-money laundering environment, while the gray list shows significant progress.