HOUSE Ways and Means Committee Chair Joey Sarte Salceda (Albay, 2nd district) says that the enactment of a measure penalizing bulk cash smuggling into or out of the Philippines will “safeguard the country against dirty money” and “improve the credibility of our financial system, lowering remittance costs for OFWs especially in Europe.”
As such, the House tax panel created a technical working group to consolidate House Bills No. 374 by Salceda, and 3254 by Rep. Lex Colada.
“As of February 24, 2023, we are the only ASEAN country in the Financial Action Task Force’s “gray list” or countries under increased observation. That means, in countries especially in Europe, banks take more time to evaluate money transfers to the Philippines because we are considered high-risk for terrorist financing and organized crime.”
“Part of the ecosystem of organized crime in the country is bulk cash smuggling. Smuggled currency is currently not expressly part of the mandate of the Bureau of Customs – since it is not considered “goods,” so they have limited legal means to fight it.”
“This bill assigns the BOC the necessary powers to apprehend the smuggling of foreign currency, which is an action point requested of us by the FATF,” Salceda added.
Salceda warned that “If currency makes it into the country, it can then be laundered through Philippine businesses such as designated non-financial institutions such as real estate brokerage, a series of seemingly innocuous transactions with banks and other financial institutions, or with the Philippines as a transshipment point to countries with “porous” boundaries with the country, such as the Southern Backdoor”
Salceda adds that “due to high penalties for involvement in terrorist financing, foreign banks are hesitant to transact with Philippine banks and citizens. By being a hub for money laundering and cash smuggling through our porous security systems and our inadequate policy framework for cash smuggling, we risk being, yet again, included in the list of countries under observation by FATF. In the United States, the fine for basic money laundering and international money laundering offences is incarceration up to 20 years and a fine of up to US$500,000, or twice the value of the proceeds involved in the violation.”
