The Securities and Exchange Commission said Thursday it supports the proposed easing of the bank secrecy law to reinforce the country’s fight against money laundering, terrorist financing, tax evasion and other financial crimes.
It said in a statement the proposed amendment of Republic Act No. 1405, or the Secrecy of Bank Deposits Law, as provided under House Bill No. 8991, would empower the Bangko Sentral ng Pilipinas to inquire into and examine deposits when there is reasonable ground to believe that fraud, serious irregularity or unlawful activity has been committed by stockholders, trustees, officers or employees of supervised institutions.
The corporate regulator said the bill would also allow the BSP to disclose the results of the inquiry or examination conducted with the SEC, Philippine Deposit Insurance Corp., Anti-Money Laundering Council, Department of Justice and the courts, when necessary to prevent or prosecute any offense or crime.
“Such provisions will lift a long-standing barrier to effective investigation and prosecution of financial crimes,” the SEC said.
It said Secrecy of Bank Deposits Law limited the effectiveness of the regulator to establish the owners of bank accounts used in cases of violations of the Republic Act No. 8799, or the Securities Regulation Code; Republic Act No. 11232, or the Revised Corporation Code of the Philippines; and other laws implemented by the Commission.
It said that in certain cases, the Secrecy of Bank Deposits Law prevented the SEC from validating information on the declared financial position of companies where there are grounds to believe that there is an effort to conceal misconduct, corporate fraud or noncompliance with certain requirements.
The Financial Action Task Force, International Monetary Fund and other international organizations repeatedly raised concerns about the unintended consequences of the country’s stringent bank secrecy law and accordingly recommended its easing to enable effective supervision of the financial system.
The proposed bill also aims to improve the global competitiveness of the Philippine economy by ensuring the integrity of the financial sector and boosting investor confidence.
The proposed amendments will equally benefit financial consumers by boosting the capacity of financial regulators such as the SEC to pursue persons and groups behind fraudulent activities such as investment scams, according to the agency.