Miriam wants 'politically exposed persons' strictly monitored by banks

With several corruption issues hounding the Philippines, Senator Miriam Defensor Santiago wants banks to be more diligent in monitoring the accounts of “politically exposed person” to combat graft and stop the practice of laundering ill-gotten wealth or misappropriated public funds.

 

In Senate Bill 2438, Santiago said banks should practice due diligence, specially focusing on politically exposed persons, such as:

 

current or former senior official in any branch of the government

 

senior official of a major political party

 

a senior executive of a corporation, foundation or other entity formed by or for the benefit of any such individual

 

an immediate family member of such individual; meaning spouse, parents, siblings, children, and spouse's parents or siblings

 

any individual publicly known (or actually known by the relevant financial institution) to be a close personal or professional associate.

 

Under the bill, banks should require clients to complete a written declaration of beneficial ownership and maintain a system of verifying their true identity and, in case of corporate clients, require a system of validating their legal existence and structure of organization, including the authority and identification of all persons acting on their behalf.

 

Banks should also require public officials to submit a copy of their SALN (Statement of Assets, Liabilities, and Net Worth), enhance the monitoring of accounts of politically exposed persons, and report all suspicious transactions to the Anti-Money Laundering Council within five working days.

 

Under the bill, those who will intentionally make a material false statement will be penalized by 10- to 12-year prison terms.

 

Any bank officer who fails to carry out due diligence measures will suffer the penalty of imprisonment, from six months to four years, or a fine of P100,000 to P500,000. The bank’s license will also be suspended.

 

Santiago said due diligence should not be difficult to implement, since customer identification should already be part of the responsibility of bank officers.

 

“While some criminals are unlikely to be deterred by the written declaration on beneficial ownership, their family members and close associates will be less inclined to lie to banks if they face individual criminal liability for issuing false statements,” she said.

 

The senator said the bill is a defense measure against the far-reaching effects of corruption which include devastating impact on development and destabilization of financial systems, damage to the country’s investment climate and prospects for macroeconomic stability, and impeded poverty-reduction efforts and heightened inequalities. – Amita Legaspi/VS, GMA News