AMLC wants real estate developers, brokers under its watch; Drilon opposes

Senate Minority Leader Franklin Drilon opposed Wednesday the proposal of the Anti-Money Laundering Council to include real estate developers and brokers in the list of institutions and persons covered under the Anti-Money Laundering Act.

During the Senate hearing on the proposed AMLA amendments, AMLC executive director Mel Georgie Racela said real estate transactions are being used for money laundering scheme and even terrorism financing.

“Based on our study, as of October 22, 2020, real estate assets with an estimated value of P861 million account for 22% of the total assets and properties subject of AMLC civil forfeiture proceedings. To date, the AMLC is able to confiscate, through civil forfeiture, P26 million worth of real estate assets,” Racela said.

“There are also several estate assets found to be related to terrorism financing which are the subject of existing freeze orders. So we confirm that real estate is a vehicle being used in money laundering scheme,” he added.

But Drilon does not believe including the real estate developers and brokers in the list of covered institutions and persons is the answer.?

“Are you telling us that real estate transaction is used generally by money launderers in our country so that the transactions must be covered by the Anti-Money Laundering law? Assuming so, isn’t the remedy to require the Registry of Deeds to report all suspicious transactions or transactions beyond the threshold amount rather than imposing an additional burden to the real estate agents,” he said.

The senator said the real estate agents are individual practitioners who engage in real estate brokering to earn extra income.

“Itong real estate agents, mga individual practitioners, maliliit po ito, housewives who would engage in real estate  brokering to earn income at the side. Can you imagine the burden? We are not talking here about real estate brokers as institutions, you have thousands of real estate brokers, mom and pop operations, housewives, somebody in the family who, to earn extra income, would go into real estate brokering,” Drilon said.

He added if the developers and brokers would be required to submit a report every time the P1 million threshold is reached, they would be able to do nothing except to report to AMLC.

“And I can assure you, you will not have the opportunity to examine these reports,” he said.

AMLC is seeking the amendment to avoid the country’s inclusion in an international body’s list of economies with a high-risk of dirty money and terrorist financing activities.

Racela earlier said the Philippines was placed under a 12-month observation period by Financial Action Task Force-International Cooperation Review Group since October 2019. The observation period was extended to Feb 2021 due to the pandemic.

“Amend the AMLA, with the inclusion of tax crimes as predicate crimes to money laundering; inclusion of real estate developers and brokers, who engage in buying and selling of real properties; expansion of investigative powers of the AMLC, that is, subpoena and contempt powers,” he said in a virtual press briefing in September.

“Failure to pass and implement the amendments to the AML before February 2021 will have similar effects that is the Philippines’ inclusion in FATF-ICRG gray list,” Racela said.

The country’s inclusion in the FATF-ICRG gray list will publicly identify the Philippines as a risk to the international financial system for having strategic deficiencies in its anti-money laundering and counter-terrorism financing framework.—AOL, GMA News