Amend Bank Secrecy Law To Counter Terrorism, Corruption — Chiz

The Senate Committee on Banks, Financial Institutions and Currencies, which Escudero chairs, heard today several legislative proposals to amend the bank secrecy law or Republic Act No. 1405.

There have been talks of changing the bank secrecy law to allow authorities to probe highly suspicious bank accounts, especially after $81-million hacking of the Bangladesh account with the US Federal Reserve early this year that ended up in a Philippine bank.

The Philippines and Lebanon are the only remaining countries with stringent laws on bank secrecy in the world.

RA 1405 prohibits disclosure of bank deposits, either held by public officials or private individuals, with any banking institution.

Section 2 of the law states that all deposits of whatever nature in banks or banking institutions in the country are “considered as absolutely confidential nature and may not be examined, inquired or looked into by any person, government official, bureau or office, except upon written permission of the depositor, or in cases of impeachment, or upon order of a competent court in cases of bribery or dereliction of duty of public officials, or in cases where the money deposited or invested is the subject matter of the litigation.”

Escudero, however, said that since some Senate proposals may exclude government officials, they will however compel public officials to submit a waiver in favor of the Ombudsman on the secrecy of their bank deposits, along with their sworn Statements of Assets, Liabilities and Net Worth (SALN). Such move is enclosed in Escudero’s proposed Senate Bill No. 80.

“There are two ways of doing it in so far as government officials are concerned: One way is to remove government officials from the coverage of 1405, while the other is to comply with the provisions of 1405 by requiring all public officials and employees to submit a waiver together with their SALN in favor of the Anti-Money Laundering Council (AMLC), the Bureau of Internal Revenue (BIR) and the Ombudsman to look into their deposits,” Escudero said.

This way, he said, would not require changes to the law but would simply require public officials to submit a waiver together with his or her SALN.

Since 2010, the veteran lawmaker has been submitting, together with his SALN, a written waiver on the secrecy of his bank deposits, which he files every year with the Office of the Ombudsman.

In the case of private individuals, removal of bank confidentiality will apply under certain circumstances, the senator said.

“Halimbawa pag nag-apply ka ng abatement or compromise sa tax mo na dapat bayaran, siguro nman puwedeng tingnan magkano ba talaga ang pera mo, baka mamaya ang in-offer mo ay maliit lang.”

An example of this is the estate tax. “Sa estate tax, namatay yung depositor, ang problema pag may namatay na ang depositor at naglipat na ng bahay, ni hindi malalaman ng kaniyang asawa at mga anak na may deposito pala ang asawa o tatay dun. Dito marapat pasok na buksan yun.”

Escudero said that once amendments to the bank secrecy or the mandatory waiver for public officials is passed, bank records automatically become accessible to the AMLC, BIR, the Securities and Exchange Commission and the Ombudsman.

“Now if they refuse to sign a waiver, then they don’t have a business being in government. Para sa akin, sino mang nasa gobyerno wala siyang karapatang sabihing sikreto yun,” he said.