DUE DILIGENCE. Senator Miriam Santiago has filed a bill seeking to deter dummies of public officials, and their families and associates. File photo by Mark Cristino/Rappler
MANILA, Philippines – Senator Miriam Defensor Santiago has filed a bill that seeks to expand the responsibilities of banks in preventing money laundering activities and discouraging people to act as dummies for corrupt public officials to hide illegally acquired assets.
Santiago has filed Senate Bill No. 2438 or the PEP Watch Act, which mandates banks to ask clients to sign documents to specify if the deposits are their own money or they are acting as "nominees" – or dummies – for the "beneficial owners" of the deposits.
PEP refers to a politically exposed person.
She issued a statement about her bill on Thursday, October 30, while a Senate blue ribbon subcommittee was conducting a hearing on the allegedly undeclared wealth of Vice President Jejomar Binay. Businessman Antonio Tiu was grilled by senators as he maintained that he, and not the Vice President, owned the so-called "Hacienda Binay" in Batangas province.
“While some criminals are unlikely to be deterred by the written declaration on beneficial ownership, their family members and close associates will be less inclined to lie to banks if they face individual criminal liability for issuing false statements,” Santiago said.
Under Santiago's bill, bank clients are required to identify themselves, the legal entity for for which the person is opening the account, and any beneficial owners associated with the legal entity.
Philippine law requires banks to pay special attention to the transactions of a PEP, referring to people with prominent public functions, their family members and close associates. But banks have been lax as shown during the impeachment trial of removed Chief Justice Renato Corona, who was not tagged as PEP by PSBank.
Santiago's bill defines PEP as the following:
Current or former senior official in the executive, Congress, the judiciary, or the military
A senior official of a major political party
A senior executive of a corporation, foundation, or entity formed by or for the benefit of any such individual
The spouse, parents, siblings, and children of such individual, or the spouse’s parents or siblings
Any individual publicly known, or actually known by the relevant financial institution, to be a close personal or professional associate of a PEP
Deposits owned by a PEP should be monitored. "The bank must combine knowledge of the customer profile, source of wealth and source of funds, and all applicable risk factors and evaluate whether the account activity is consistent with these factors," Santiago said.
Aside from the alleged use of "dummies" by Vice President Jejomar Binay for his businesses and property acquisitions as bared on an ongoing Senate probe, the use of immediate family members as supposed dummies was also an issue during the impeachment trial of Corona and the ongoing investigation of alleged pork barrel scam mastermind Janet Lim Napoles. – Rappler.com