EDITORIAL - A weapon vs money laundering

Beating the deadline, President Duterte signed into law on Jan. 29 Republic Act 11521, broadening the scope of RA 9160 – the original Anti-Money Laundering Act of 2001. Failure to enact the amendments to RA 9160 by Feb. 1 would have landed the Philippines on the so-called gray list of the Paris-based Financial Action Task Force or FATF, which could have made it more difficult to do business in the country and remit earnings of Filipinos working overseas.

Persons or entities covered by the two laws now include Philippine offshore gaming operators and POGO service providers as well as real estate developers and brokers. The covered offenses now include financing of terrorism and the proliferation of weapons of mass destruction, tax evasion involving deficiencies above P25 million and casino cash transactions above P5 million.

Terrorist offenses are defined under RA 11479, the controversial Anti-Terrorism Act that was signed into law in July last year. As allowed under this law, the Anti-Terrorism Council has started identifying groups classified as terrorist organizations, whose assets can be frozen and scrutinized by the Anti-Money Laundering Council or AMLC, and seized by the state. The groups include Islamist extremists operating mostly in Mindanao as well as the Communist Party of the Philippines and its armed wing the New People’s Army.

The broader powers given to the AMLC, particularly in running after large-scale tax evasion, should give more teeth to the campaign against plunderers in government, jueteng lords, smugglers, drug traffickers and tax-evading POGOs. At the same time, care is required in applying the law against groups identified by the government as communist rebel front organizations, especially in the light of the recent “unpardonable gaffe” committed by the military in red-tagging certain alumni of the University of the Philippines.

In complying with the FATF requirement, the AMLC has been handed a powerful weapon to curb money laundering. The weapon must be wielded to the fullest while exercising utmost prudence.