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Congress will escalate the fight against large-scale cash smuggling

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A technical working group (TWG) was established by the House Committee on Ways and Means on Monday in order to coordinate the sanctions against bulk cash smuggling into or out of the Philippines.

The House Bills (HB) 374 and 3254, which impose fines for the mass importation or exportation of foreign currency and other financial instruments and are a component of the money laundering and terrorism financing ecospheres, are assigned to the TWG.

Committee head Joey Salceda stated during the hearing that because of the severe penalties associated with supporting terrorism, foreign banks are now reluctant to conduct business with Filipinos and local institutions.

Remittances from overseas Filipino workers (OFWs) to their families and investments from investors to their partners in the nation are both hampered by uncertainty.

In addition to “improving the legitimacy of our financial system, cutting remittance costs for OFWs, notably in Europe,” he said that the measure would “safeguard the country against dirty money.”

We are the only ASEAN nation on the Financial Action Task Force’s (FATF) “gray list,” or countries that are subject to closer scrutiny, as of February 24, 2023. Accordingly, banks in other nations, particularly in Europe, take longer to assess money transfers to the Philippines because we are regarded as having a high danger of being used to fund terrorism and organized crime, the man said.

A person found to have made a fraudulent declaration or non-declaration of foreign cash or a bearer monetary instrument denominated in foreign currency would be required to provide information to the Bureau of Customs (BOC).

He added that the law would provide BOC the authority it needs to stop the smuggling of foreign currency, which is an action the FATF has demanded.

“By being a center for money laundering and cash smuggling through our porous security systems and our poor policy framework for cash smuggling, we risk being, yet again, listed in the list of nations under monitoring by FATF,” he warned.

Being on the FATF gray list, according to him, “hurts OFWs because foreign banks undertake more due diligence, or outright reject OFW remittances, or take longer to process them.”

The national GDP could be put at risk to the tune of 13.18 percent if Philippine banks are unable to conduct business with foreign institutions. Both investors and OFWs won’t be allowed to send money to partners in the Philippines in the form of remittances. Given the losses resulting from the inability to conduct business with international banks, Philippine banks will be forced to raise prices for Filipino consumers in order to maintain operations. This will have a significant impact on our capacity to support domestic businesses and generate employment, Salceda added.

The Anti-Money Laundering Act of 2001’s protection of one-time cash transportation of more than PHP500,000 at a time is to be increased under the proposed legislation.

Additionally, it will give the Anti-Money Laundering Council (AMLC) authority to specify what constitutes a “one-time” as a collection of closely related events.

Although many nations’ anti-money laundering initiatives are led by their Secretaries or Ministries of the Treasury, the Bureau of Treasury will enable counterpart-to-counterpart collaboration in the AMLC through the Treasurer of the Philippines.

To ensure that attempts to avoid leaving a paper trail for cash transfers will not be permitted, the law intends to make bulk cash smuggling illegal.

If found guilty of smuggling currency, the sentence must be between seven and fourteen years in prison.

Assets connected to cash smuggling shall also be subject to civil forfeiture in favor of the Philippines.

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