SEC joins clampdown on bank secrecy

SEC joins clampdown on bank secrecy

The Securities and Exchange Commission is backing moves aimed at strengthening legislative measures to safeguard the financial system against money laundering, terrorist financing and tax evasion.

In a statement, the SEC said it was in favor of easing the restrictive provisions of the Bank Secrecy Law, which is considered among the strictest in the world.

House Bill 8991 seeks to empower the Bangko Sentral ng Pilipinas to inquire into and examine deposits when there is reasonable found to believe that fraud, serious irregularities or unlawful activity has been committed by stockholders, owners, directors, trustees, officers or employees of supervised institutions or their representatives, related parties or conspirators.

The bill will further allow the BSP to make the results of the inquiry 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.

Enacted in 1955, the Bank Secrecy Law prohibits the disclosure of information about bank deposits except with the written consent of the depositor, in cases of impeachment, upon the order of a court in cases of bribery or dereliction of duty of public officials, and when the deposit is the subject of litigation.

According to the SEC, the secrecy of bank deposits has limited the corporate watchdog’s effectiveness to establish the owners of bank accounts of persons and groups behind fraudulent activities.

The proposed bill, when passed, is seen to result in lower costs of cross-border transactions and eased restrictions in investment and foreign currency inflows by keeping the Philippines off the FATF “grey list” of jurisdictions under increased monitoring for high risks of money laundering and terrorist financing.

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