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Anti-money laundering law 'lacks teeth'

Joseph, Jinggoy Estrada plunder trial
Ousted Philippine President Joseph Estrada sits in a courtroom with his co-accused son Jinggoy  

HONG KONG, China -- The likely effectiveness of the Philippines newly-passed anti-money laundering law has been called into question by the country's parliamentarians.

Lawmakers who voted against the bill complained it was "watered down" since Congress "was made to work with a loaded gun."

Congressman Carlos Padilla admitted that the law "does not have enough teeth," since lawmakers failed to refine the bill due to the pressure to pass the law swiftly.

The Philippines government was striving to beat a deadline imposed by the Financial Action Task Force (FATF) under the threat of economic sanctions by industrialized countries.

The U.S. government was also applying pressure in a bid to identify and freeze the accounts of suspected terrorists.

Anti-money laundering council

Finance Secretary Jose Isidro Camacho told CNN that the law would still be effective in solving the problem of money laundering in the country.

"The passage of the bill would allow the creation of an anti-money laundering council which would have the power to check suspicious accounts."

Camacho said the council would have the authority to inspect dubious bank accounts.

"The motivation for the passage of the law is to stop money laundering in the country, as well as to support the bid of international communities in fighting terrorism."

Camacho said the anti-money laundering law would be used to check the accounts of suspected terrorists, as well as accounts maintained by government officials accused of corruption.

The law would first be tested in the plunder case against deposed leader Joseph Estrada.

Estrada was accused of stealing millions of dollars worth of public funds and keeping them under fictitious names.

Abu Sayyaf in the sights

But government prosecutors then faced a blank wall since banks refused to provide information about Estrada's accounts while invoking the country's tough Bank Secrecy Law.

At the same time, the government is also bent on tracking the funds of the notorious Abu Sayyaf bandits, who have earned a living through kidnap-for-ransom activities.

The absence of an anti-money laundering bill has prevented the government from cracking down on the hidden funds of terror groups linked to Saudi dissident Osama bin Laden, the main suspect behind the attacks that killed thousands in the U.S. on September 11.

The President said that once the bill was passed she would hunt down the bank deposits of the Abu Sayyaf, a Philippine Muslim guerrilla group that is alleged to have links with bin Laden.

The law is subject to a review by the FATF when it holds its next plenary in February 2002.

The FATF, established by the world's industrialized countries in 1989, has tagged the Philippines as a "non-cooperative country" in global efforts to stem money laundering.


• House of Representatives Official Website
• The Philippine Senate

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