NextGen Day

MANILA, Philippines — Representative Joey Salceda, chair of the House Ways and Means Committee, said on Friday that he will ask the Philippine central bank, the Bangko Sentral ng Pilipinas (BSP), to draft legislation on the country’s targeted financial sanctions (TFS) framework to combat terrorism and proliferation financing.

Salceda stressed the importance of the Philippines enacting more effective targeted financial sanctions in order to persuade the Financial Action Task Force (FATF) to remove the Philippines from its “gray list” by the end of the year.

The FATF has raised concerns about the country’s ability to implement the targeted financial sanctions framework (TFS) for both terrorist and proliferation financing.

“I don’t believe our present bank secrecy laws would enable for targeted sanctions to be effective.” For tax purposes, I’ve been a big advocate for loosening our bank secrecy regulations. In a message to reporters, Salceda said, “It may be time to relax them for targeted sanctions as well.”

According to Salceda, imposing targeted sanctions will be difficult until the country’s banking sector becomes more transparent.

“As a result, claims that our banks are used as a conduit for all kinds of terrorist and illegal transactions will continue to be made. The BSP’s flexibility in policy modifications is limited. Legislation is required “he stated

He is researching tax legislation that would impose substantially greater taxes on unlawfully amassed income and allow evidence of tax evasion to be used in the prosecution of other offenses.

“The infamous American gangster Al Capone was captured not for murder, lawless violence, or any other crime but tax evasion,” according to Salceda.

“Organized crime is usually motivated by money. And hidden funds imply that some taxes are evaded. Tax evasion is always easier to pursue as a lead for other crimes because, unlike other crimes, where circumstances can mitigate culpability, the test for tax evasion is very straightforward: if you devised a plot to deceive the government, you’re guilty “he stated

He believes that enabling the use of evidence from tax evasion in investigations into other financial crimes can help the government improve its FATF ranking.

The BSP, for its part, said it is taking steps to address three action plan items: implementing new registration requirements for money or value transfer services, enforcing sanctions against unregistered and illegal money remittance operators, and improving the effectiveness of the TFS framework for both terrorism and proliferation financing.

“It will guarantee that the remaining action plan items for the BSP and BSP Supervised Financial Institutions are effectively handled,” the BSP said in its annual report, “in keeping with the country’s strong resolve to rectify all identified strategic shortcomings to exit from the gray list.”

According to the BSP, a group has been formed to track and collect activities and countermeasures seen in other jurisdictions. Similarly, the central bank stated that it keeps track of instances involving de-risking and correspondent banking, among other things.

“The data acquired will be used to implement relevant policy responses and other essential actions,” the report stated.

The implications of “gray-listing,” according to Anti-Money Laundering Council (AMLC) executive director Mel Georgie Racela, include an increase in the cost of transacting with foreign financial institutions, such as de-risking or de-banking, as well as an increase in fees, borrowing rates, and transaction fees.

Other consequences of gray-listing include transaction delays, which result in a 2 to 4% drop in yearly foreign currency transfers, as well as unfavorable reputational and country risks.

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