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Bacolod City, PhilippinesTuesday, March 8, 2011
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Editorial

Financial
investigators need teeth

Daily Star logo
Published by the Visayan Daily Star Publications, Inc.
NINFA R. LEONARDIA
Editor-in-Chief & President

CARLA P. GOMEZ
Editor

GUILLERMO TEJIDA III
Desk Editor
PATRICK PANGILINAN
Busines Editor

NIDA A. BUENAFE

Sports Editor
RENE GENOVE
Bureau Chief, Dumaguete
MAJA P. DELY
Advertising Coordinator

CARLOS ANTONIO L. LEONARDIA
Administrative Officer

A US State Department 2011 International Narcotics Control Strategy Report released last week says that the Philippines’ financial intelligence unit, or FIU, investigations are severely constrained by limited authority to access bank information. The report indicated that the requirement of obtaining a court order to freeze assets, including those of terrorist organizations placed under the United Nations 1267 Sanctions Committee and lists of foreign governments, is inconsistent with the international standard which calls for preventive freezing of terrorist assets without delay from the time of designation.

The US government urged the Philippines to enhance the FIU’s access to financial records and ensure it can rapidly freeze terrorist assets. The report said that, because the Philippines is still a heavily cash-based economy, with substantial remittances coming abroad, it is vulnerable to money laundering activities that use formal financial institutions to conceal the proceeds of crime. This is compounded by a weak national ID system that makes implementing a robust “know your customer” system difficult. The report also cited human and drug trafficking, as well as official corruption and investment scams as principal sources of criminal proceeds.

If our Financial Investigation Units are to do their job properly and prevent our country from continuing to be hotbed and haven for these kinds of criminal activities, then our government has to seriously consider the recommendations of the US State Department report and give our FIU more teeth, not just so it can stop terrorist funding, but also so that the other crimes that are currently taking advantage of our weak FIU can be stopped. This is especially critical if we are truly serious about stopping corruption, as we have seen over the past few weeks just how easy it is for government officials to use financial institutions to hide and hoard the proceeds of their criminal activities and how many of them have exploited the weakness and the loopholes of the system to be able to get away with a great majority of their ill-gotten gains even after the full might of the lackadaisical Ombudsman is already onto them.

As long as safeguards are put in place to ensure that an improved and empowered FIU cannot be used as a weapon against political targets, it has become painfully obvious that we need a better Financial Investigation Unit in this country in order to prevent the terrorists, drug traffickers and plunderers from taking advantage of our weak laws and systems and enriching themselves while wreaking havoc on our society at our expense.*

 
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