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SEC: Easing bank secrecy law provisions may boost PHL’s fight vs money laundering

THE Securities and Exchange Commission on Thursday said it supports the easing of some of the provisions of the Bank Deposits Secrecy Law to reinforce the country’s fight against money laundering, terrorist financing, tax evasion and other financial crimes.

House Bill (HB) 8991 amends the current law and hopes to empower the Bangko Sentral ng Pilipinas (BSP) to inquire into and examine deposits when there is reasonable ground to believe that fraud, serious irregularity or unlawful activity has been committed by stockholders, owners, directors, trustees, officers or employees of supervised institutions, or their representatives, agents, related parties or conspirators.

The bill will further allow the BSP to make the results of the inquiry or examination conducted with the SEC, the Philippine Deposit Insurance Corp., the Anti-Money Laundering Council, the Department of Justice and the courts, when necessary to prevent or prosecute any offense or crime.

“Such provisions will lift a long-standing barrier to effective investigation and prosecution of financial crimes,” the SEC said.

The regulator said the bank secrecy law has limited its effectiveness to establish the owners of bank accounts used in cases of violations of the Securities Regulation Code or the Revised Corporation Code of the Philippines and among other laws.

In certain cases, the said law also has prevented the SEC from validating information on the declared financial position of companies where there are grounds to believe that there is an effort to conceal misconduct, corporate fraud or noncompliance with certain requirements.

The Financial Action Task Force, the International Monetary Fund and other international organizations have repeatedly raised concerns about the unintended consequences of the country’s stringent bank secrecy law and recommended its easing to enable effective supervision of the financial system.

The enactment of HB 8991 into law will serve as one testament to the Philippines’s commitment to international standards and best practices against money laundering, terrorist financing and other financial crimes, the SEC said.

“The bill should likewise result in lower costs of cross-border transactions and eased restrictions in investment and foreign currency inflows by keeping the Philippines off the FATF ‘grey list’ of jurisdictions under increased monitoring for high risks of money laundering and terrorist financing,” the regulator added.

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