Dominguez to legislators: ‘You don’t want Pogos? Pass a law!’

If legislators wanted Philippine offshore gaming operators (Pogos) out of the country due to the social ills they’re supposed to bring, they should pass a law making online casino operations entirely illegal, according to Finance Secretary Carlos G. Dominguez III.

Dominguez said not only was the $350 to $380 million in supposedly dirty money just a fraction of the $1 billion in foreign exchange that enters the Philippines, but “in fact it is not illegal.”

Dominguez said that “if people in the legislature want more teeth to look at this, please give us more teeth” to implement the Anti-Money Laundering Act (Amla) to stop crimes linked to Pogos.

“We are not the ones who make things legal or illegal—it’s the legislature,” Dominguez said using we to refer to the Executive branch.

“We implement,” he said.

“If the law says all the guy has to do is tell us how much he’s bringing in, that’s all we can do,” said the finance chief.

He said the Executive “cannot assume” that it’s illegal to bring in foreign currency through Philippine ports because “it is legal to bring in any amount of foreign exchange as long as you declare it.”

“So why do they do it here? Because they can. Why can they? Because it is not illegal. So you want to make it illegal? Please pass a law—that’s all it is,” Dominguez said.

“We are sworn to implement all the laws that are in the country, but we cannot implement things that are not in the law—or else we will be accused of over stretching,” according to Dominguez. “You don’t want Pogos? Pass a law!”

Since Pogos are legitimate businesses, Dominguez said the Department of Finance (DOF) was going after their tax payments.

“The law we can go after them is taxes. My department is the only one trying to make these Pogos follow the law—and the law is pay your taxes, pay the taxes of your foreign employees, pay the 5-percent franchise fee,” he said referring to the amount that Pogos have to pay to the Philippine Amusement and Gaming Corp. (Pagcor) to start doing business.

In a speech before new local treasurers on Friday (March 6), Dominguez reiterated that the DOF and the Bangko Sentral ng Piipinas (BSP) had been pushing for amendments to AMLA and the Bank Secrecy law to “strengthen our ability to fight tax evasion and other financial crimes.”

“Recently, we have detected the unrestricted influx of millions of dollars worth of foreign currency,” he said.

“An investigation is underway to determine the sources and destinations of these foreign banknotes flagrantly stashed in suitcases and brought into the country,” Dominguez added.

“There is, of course, a large possibility that those who bring in these large sums of cash intend to launder them here in the Philippines,” he said.

“There is an even worse possibility that the money in question could be used by international criminal syndicates or terrorist networks,” Dominguez said.

“It is also very likely that the bulk foreign currencies are coming through our financial system through other channels, not only through the ports,” he said in his speech.

“They do this because they can. Our laws have no teeth to investigate and prosecute these activities effectively,” he continued.

“We don’t have enough tools to know where all this money is going, without being hamstrung by stringent bank secrecy laws,” he added.

Together with Lebanon, the Philippines remained one of two countries in the world preventing scrutiny of bank accounts.

Dominguez said that AMLA “remains a weak tool against money laundering and other unlawful activities.”

“Tax evasion and other financial wrongdoing are not among the predicate crimes listed under the law that would allow the Anti-Money Laundering Council or AMLC, to examine bank accounts after securing a court order,” he said.

“This leaves us powerless in going after tax evaders and other criminals using funds for other illegal activities,” he added.

“Now more than ever, we are ready to work with the legislature to advocate again for congressional approval of this crucial measure,” he said.

The DOF, he added, would support swift passage of a law amending AMLA “to ensure that the Philippines will not be used as a money laundering site for the proceeds of any unlawful activity.”

“While waiting for these crucial measures to be enacted, we are continuously working with other government agencies and the AMLC by utilizing currently available tools to curb tax evasion and other questionable activities, such as the unrestricted influx of foreign currency into the country,” according to Dominguez.

Edited by TSB