‘Freeze bid nothing but politics’

By Dean dela Paz (Last of two parts)

A product of the peculiarities of the political slime they wallow in, the original legislators crafting the seminal anti-money laundering laws tailored, custom-designed and worked into the law safeguards to address their personal circumstances.

The original objectives of the European-based Financial Action Task Force (FATF), which had insisted on stricter anti-money regulations as a tool against global terrorism and its funding were largely ignored.

Analyze the list of predicate crimes considered requisites to initiate the laundering provisions. While most involved cliché criminality, many were of the domestic kind, albeit classic sources, of political campaign funding.

These included bank robberies, extortion, kidnap-for-ransom, carjacking, prostitution, human trafficking, intellectual-property theft, illegal gambling, gun-running and the illegal drug trade—all of which were classic political campaign-funding sources, as well as both sources and uses of terrorism money.

Note the inclusion of terrorism financing as defined under R.A.10168 (An Act Defining the Crime of Financing of Terrorism, Providing Penalties Therefor and for Other Purposes).

As to the use of the financial system to re-channel the fruits of predicate crimes where ill-gotten money flows into terrorist activity within the preemptive provisional safeguards, there really was very little verbiage save for anemic provisions on the identification of bank clients.

Banks were simply asked to ascertain identities. Nothing on the sources of wealth and even less on where such wealth would be applied. Suspicion was needed to merit a report, but such suspicions can easily be diluted by the sheen of substantial deposits and the glitter of potential transactions. A bank manager is unlikely to look gift horses in the mouth.

Our honorable legislators were after protecting their backs and were characteristically annoyed at the FATF pressures, but begrudgingly realized that they had little choice. It did not help that among the silent, albeit persuasive advocates, was a group of consultants funded by a foreign entity. The group embedded itself within the local hierarchy on the pretext of technical assistance.

Within the law, the political hand is evident. Our local bank secrecy laws remain the most rigid despite relative laxity in other economies. In our version of the list of predicate crimes, a good quarter relate to terrorism directly and another quarter indirectly. Here the influence of the primordial objective of combatting terrorism can be inferred quite clearly.

To do so would, however, mean the opposite where absence from the list of predicate crimes is likewise just as important as inclusion. On this, the crimes of graft and corruption were included but remained an insignificant portion. Moreover, the statutes on graft and corruption in the Philippines were based on ancient laws drafted in the early 1960s. While, indeed, graft and corruption necessarily import from all over the library of criminality and directly from the Penal Code, in this country at least, it is one of those crimes constantly accused but rarely prosecuted to the very end.

Ambiguity seemed to be the best compromise for the original legislators but the FATF would have nothing of that. As a result, from the first drafts of the law to the final version, the FATF felt it necessary to revisit what our politicians had written to regulate their greed, and as versions were written the statutes had gotten stricter.

Unfortunately, the political dimension rather than its global anti-terrorism aspects would remain focal points in our milieu.

This was the case when the law was applied in impeaching a Chief Justice and this is the case today in the demolition jobs employed against a presidential contender. Such is the reality of our laws where it comes to selective applications.

As the anti-money laundering reports show in the latter case, the funds have been withdrawn.

For what purpose then is the court order to freeze non-existent funds? It is to publicize and hope for misconceptions. Once again the bane reveals itself. It is all politics and nothing else.