Duterte/Cayetano: Day 3 on Bank Secrecy Challenge

PRESS RELEASE

16 March 2016

"Day 3 on bank secrecy challenge"

Call to open bank accounts gains ground, Cayetano draws similarities between Binay's ill-gotten wealth and $81-M money laundering scheme

The call of vice presidential bet Senate Majority leader Alan Peter Cayetano for fellow candidates to open their bank accounts as part of their commitment to transparency continued to gain ground. This was after the administration's presidential candidate, former Department of Interior and Local Government (DILG) Secretary Manuel "Mar" Roxas signified intention to make public his bank records.

Cayetano welcomed Roxas' statement but urged him to prove his sincerity by immediately signing the manifesto they prepared pledging to open all bank accounts in local and foreign currencies, both here and abroad. Roxas agreed to open his accounts after Duterte and Cayetano wrote a letter to them urging them to sign the waiver.

"I welcome the response of Sec. Roxas to our challenge. Since 2007, when I scrutinized the bank accounts of then first gentlemen Mike Arroyo, I already called for the lifting of the bank secrecy provisions of the Bank Secrecy Law for public officials. I'm glad that the administration is finally with me on this issue," Cayetano said.

"Extremely similar"

Meanwhile, amid the Senate Blue Ribbon investigation into the $81 million money-laundering operation involving the Rizal Commercial Banking Corporation (RCBC), Cayetano drew attention to Binay’s own “money-laundering scheme” using the same bank.

Cayetano cited an Anti-Money Laundering Council (AMLC) report where Gerardo Limlingan, an alleged dummy of Binay, had transactions with the RCBC amounting to P3.1 billion. The senator said Limlingan’s transactions alone are equivalent to $68.1 million or just $12.6 million short of the $81 million allegedly withdrawn from Bangladesh’s bank account in the United States.

The one-page portion of the report Cayetano distributed to the media showed that Limlingan had one transaction of P2 Billion, and two transactions of P500 Million through the RCBC, the same bank in question in the ongoing Senate probe.

"The similarities are extreme. Like Binay's ill-gotten wealth, the same bank is involved on both cases. Both involved dummy accounts. And unscrupulous people are hiding behind the same banking law. The only difference is, Binay doesn't need hackers to amass ill-gotten wealth," Cayetano said. "I hope the government has the same enthusiasm in holding the vice presindent and his accomplices accountable for stealing from Filipinos as it now has in probing the $81-million money-laundering scheme," he added.

Day 3: Still Duterte and Cayetano

The duo signed a manifesto committing to open their bank accounts and challenged all candidates to do the same. To date, only Duterte and Cayetano are the only candidates who have actually signed the document.

Philippine Urged to Lift Bank Secrecy Law

By Danessa O. Rivera (The Philippine Star) 

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The Philippines needs to put in place a legal mechanism by lifting the bank secrecy law that will allow the exchange of information necessary in transparency, OECD Center for Tax Policy and Administration head of global relations Richard Parry said. File photo

MANILA, Philippines - The Organization for Economic Cooperation and Development (OECD) is urging the Philippines to lift its bank secrecy law to strengthen the country’s tax system and fight tax evasion while meeting global standards in tracking tax  fraud.

The Philippines needs to put in place a legal mechanism by lifting the bank secrecy law that will allow the exchange of information necessary in transparency, OECD Center for Tax Policy and Administration head of global relations Richard Parry said in a briefing during the two-day Workshop on Fiscal Management through Transparency and Reforms in Bagac, Bataan.

“It is possible to do it. The political will is needed for the Philippines to meet international standards in that area,” he said.

The bank secrecy law is a special legislation that requires banks and financial institutions to protect and keep confidential customer information from third parties even if these are government or tax authorities, unless the client relieves the bank of its duty.

Any violator will be convicted to an imprisonment of not more than five years or a monetary fine, or both, depending on the court’s decision.

Parry said the key challenge for tax administrators globally in dealing with money launderers and tax evaders is having enough information to detect law breakers.

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In 2009, G20 – an international forum for the governments and central bank governors from 20 major economies-declared that bank secrecy is approaching the end of its life in accordance with international standards.

That is why the OECD is introducing a new global standard for the automatic exchange of information between and among tax authorities to make it difficult for people to funnel investments outside of their country of residence, Parry said.

This will be set more broadly by the Global Forum on Transparency and Exchange of Information, a multilateral framework with 126 members including the Philippines.

“It is important for the Philippines to change its legislation in that issue in order to meet international obligations with regard to the exchange of information,” Parry said.

The OECD official said the Philippines’ commitment in upholding international standards would result in strides in holding violators accountable.

“That would lead to significant gain with regard to legitimate tax charges in Philippines. What it does is provide Philippines with revenue and resources it needs for social programs and deal with issues,” Parry added.

In March 2014, Bureau of Internal Revenue (BIR) commissioner Kim Henares urged lawmakers to lift the bank secrecy law amid renewed calls for greater exchange of information and increased transparency globally.