The Department of Finance (DOF) yesterday cited the need to strengthen enforcement of rules on detection, prosecution and conviction of financial fraud in the country
“(I) have discussed with SEC (Securities and Exchange Commission) their poor record of law enforcement of financial fraud perpetrators,” said DOF Secretary Carlos Dominguez, adding that the Commission has yet to make any convictions on operators of pyramid scheme operators.
Dominguez also noted the need to pass the proposed measure to get the bank secrecy law in line with international best practices.
The finance chief was reacting to a story released over the weekend by Nikkei Asian Review, which highlighted the lack of enforcement capacity on the part of the SEC, the Bangko Sentral ng Pilipinas and the Anti-Money Laundering Council (AMLC), when it comes to financial fraud.
The article titled, Why does the Philippines attract financial fraud, also pointed out that there is barely any encouragement for whistleblowers to come forward, suggesting the need to develop a strong whistleblower system.
In March, Dominguez had pointed out the Anti-Money Laundering Act, enacted in 2001, remains a weak tool against money laundering and other unlawful activities, especially because tax evasion and other financial crimes are not among the predicate offenses listed under the law that would allow the AMLC to examine bank accounts after securing a court order.
“This leaves us powerless in going after tax evaders and other criminals using funds for other illegal activities,” Dominguez said.
He also noted that as early as 2016, the DOF has called on the congress to pass amendments to Republic Act No. 1405, or the Bank Secrecy Law, to enable the government “to penetrate the wall of confidentiality used to conceal ill-gotten money by lifting the bank secrecy rules for suspected criminal cases.”
The DOF tried to include the lifting of bank secrecy in the tax amnesty bill, but this was excluded by the congress in the final version of the measure.
