The TWG is tasked to tackle House Bills (HB) 374 and 3254, which provide penalties for the smuggling of foreign currencies and other monetary instruments in bulk into or out of the country, which is part of an ecosystem of money laundering and terrorist financing.
During the hearing, committee chair Joey Salceda said foreign banks are now hesitant to transact with Filipinos and local banks due to high penalties for involvement in terrorist financing.
The hesitation affects the remittances sent by overseas Filipino workers (OFWs) to their families, as well as investments sent by investors to their partners in the country.
The proposal, he said, would “safeguard the country against dirty money” and “improve the credibility of our financial system, lowering remittance costs for OFWs especially in Europe.”
“As of February 24, 2023, we are the only ASEAN country in the Financial Action Task Force’s (FATF) “gray list” or countries under increased observation. That means, in countries especially in Europe, banks take more time to evaluate money transfers to the Philippines because we are considered high-risk for terrorist financing and organized crime," he said.
Under the measure, the Bureau of Customs (BOC) would be authorized to obtain information from a person found to have committed a false declaration or non-declaration of a foreign currency or foreign currency-denominated bearer monetary instrument.
He also explained that the bill would provide BOC the necessary powers to apprehend the smuggling of foreign currency, which is an action point requested by the FATF.
"By being a hub for money laundering and cash smuggling through our porous security systems and our inadequate policy framework for cash smuggling, we risk being, yet again, included in the list of countries under observation by FATF," he said.
He argued that being in the FATF gray list “hurts OFWs, as foreign banks perform more due diligence, or outright reject OFW remittances, or take longer to process them.”
“The inability of Philippine banks to transact with foreign banks could endanger as much as 13.18 percent of the national GDP. OFWs will be unable to send remittances to the Philippines and investors will be unable to send investments to partners in the country. Philippine banks will be obliged to increase costs on Filipino consumers to sustain operations given the losses due to inability to transact with foreign banks. This will have profound implications on our ability to boost domestic enterprises and create jobs,” Salceda added
The bill seeks to expand the coverage of the Anti-Money Laundering Act of 2001 to include one-time cash transports of more than PHP500,000 at any one time.
It shall also empower the Anti-Money Laundering Council (AMLC) to define a cumulation of closely-related events that would constitute “one-time.”
Likewise, the Bureau of Treasury, through the Treasurer of the Philippines, in the AMLC shall facilitate counterpart-to-counterpart cooperation, as many countries’ anti-money laundering efforts are spearheaded by their Secretaries or Ministries of the Treasury.
The bill proposes to criminalize bulk cash smuggling to ensure that the evasion of a paper trail for cash transfers will not be tolerated.
A person convicted of a currency smuggling offense shall be imprisoned for not less than seven years and not more than 14 years.
There shall also be a civil forfeiture in favor of the Philippines of assets related to cash smuggling. (Filane Mikee Cervantes)
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