EDITORIAL - Strengthening the AMLC

The executive director of the Anti-Money Laundering Council is stepping down today as Congress deliberates on proposals to include casinos under the coverage of the Anti-Money Laundering Law. Julia Bacay-Abad is quitting a month after President Duterte threatened to “whack” AMLC members, accusing them of corruption and refusing to cooperate in the war on drugs.

Abad is also resigning shortly after Pampanga Rep. Gloria Macapagal-Arroyo, a Duterte ally, proposed that the Bangko Sentral ng Pilipinas governor be disallowed from supervising the AMLC. The proposal was described as “irresponsible” by one of the authors of AMLA, Teodoro Locsin Jr., now the country’s permanent representative to the United Nations in New York.

The President’s tirades against the AMLC apparently stems from the council’s failure – or refusal, as administration officials describe it – to provide documents on hidden assets of drug traffickers as well as certain individuals linked to Sen. Leila de Lima, who is accused of coddling drug dealers at the New Bilibid Prison.

The AMLC first incurred Duterte’s ire during the election campaign, when he suspected the council of being the source of a report, which he described as false, that he had P211 million in undeclared bank deposits. Duterte believed the then ruling Liberal Party was the purveyor of the story, and he has accused the AMLC of favoring the previous administration.

Instead of “whacking” the AMLC or trying to emasculate its officials, the President should find ways of strengthening it. AMLC officials have said restrictions set by law on the council’s powers prevented them from looking into bank deposits or providing documents demanded by the Duterte administration. The President should look into those restrictions and push his congressional allies to pass the necessary reforms.

Congress, with its members focused on self-preservation, had passed the AMLA with great resistance. Legislators included only enough predicate crimes under the coverage of the law that would keep the Philippines from being blacklisted as a money-laundering haven by the Paris-based Financial Action Task Force. More predicate crimes were added in trickles. For years, several graft-related offenses and tax evasion were excluded.

Hackers who stole nearly a billion dollars from the US Federal Reserve account of the Bangladesh Bank managed to funnel $81 million to the Philippines through casinos and a bank because casinos were exempted from the reach of the AMLC. If President Duterte is serious in his campaign against corruption, he must work to make the AMLC stronger rather than defanging it.