BusinessMirror October 31, 2020

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BusinessMirror

www.businessmirror.com.ph

A broader look at today’s business n

Saturday, October 31, 2020 Vol. 16 No. 23

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THE HALF-BLIND LAUNDRY LIST

Senate not keen on passing AML law just yet, despite risk of being greylisted

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By Bianca Cuaresma

ESPITE the threat of the country being on the bad side of international finance watchdogs again, lawmakers will not be rushed into giving blanket approval to the proposed amendments to the AntiMoney Laundering Act of 2001. They believe the specifics of the law could be used for overregulation, inequality in implementation and harassment.

One glaring observation they made: the proposed amendments subject to constant scrutiny realestate transactions set at a very low threshold (P1 million), when money-laundering regulators cannot even detect wrongdoing by Philippine Offshore Gaming Operators (POGOs) that transact by the billions. The Committee on Banks, Financial Institutions and Currencies discussed in a hearing this week steps to strengthen Republic Act 9160 or the Anti-Money Laundering Law. The Anti-Money Laundering Act was enacted in 2001 to ensure that the Philippines shall not be used as a money-laundering site for the pro-

ceeds of any unlawful activity. However, the international money-laundering watchdog Financial Action Task Force (FATF) said the current anti-money laundering (AML) law of the Philippines does not meet the globally practiced standard. As a result, the Philippines was then placed under a 12-month observation period by the FATF in October 2019, following the country’s evaluation. However, in view of the general pause in the review process due to the pandemic, the observation period was extended until February 2021. Under this 12-month observation period, the Philippines must address the recommended actions to

avoid being included on the international organization’s grey list. Being on the grey list is expected to result in an additional layer of scrutiny from international regulators and financial institutions and will increase the cost of doing business and delay the processing of transactions. According to FATF’s data, there are currently 18 countries on its grey list. These are Albania, the Bahamas, Barbados, Botswana, Cambodia, Ghana, Iceland, Jamaica, Mauritius, Mongolia, Myanmar, Nicaragua, Pakistan, Panama, Syria, Uganda, Yemen and Zimbabwe.

Contentious amendments

SENATORS, however, called for

further time and review of the proposed additional powers for the AML Council (AMLC). Among those that concerned senators include the oversight in the real-estate sector, inequality of oversight among various sectors, proper definition of scope of terms and grant of juridical powers to the agency. “We must be very careful here, because indeed, while we know that we should not be used as a haven for terrorist financing, a grant of broad powers can result in abuses,” Sen. Franklin Drilon said. Among the heavily debated during the three-hour hearing was the proposal to subject real-estate Continued on A2

The messy, booming business of recycling cruise ships

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By Fran Golden | Bloomberg News

ARNIVAL Fantasy was a ship famous for its outlandish décor, all-night revelry and its size— back when 2,000 was an incredible number of passengers. The “Fun Ship” vibe it introduced in 1990 came with such whimsical spaces as an Egyptianthemed piano bar, decorated with a fake sarcophagus, and a glitzy glass-topped atrium that was the hub of the social scene. Today the Fantasy is attracting a whole different breed of bootyseeker. In July, the 30-year-old ship sailed to the Aegean Sea, wrapping its final voyage in the shipbreaking capital of Aliaga, Turkey. Its resting place there is a demolition yard where old cargo ships, tankers, research vessels— and now cruise ships retired during the Covid-19 pandemic—get torn apart and broken into pieces. In this case, they’re not being broken in half to get upgraded and stitched back together. Instead, circling the Fantasy’s partially deconstructed innards are buyers from all sorts of industries, looking for rock-bottom deals on everything from artwork

and kitchenwares to electrical wires and stainless-steel sinks. For the cruise company, it’s an opportunity to recoup at least some value from an asset that’s currently acting as dead weight; while ships’ values decline with age, the Fantasy was originally built for about $225 million. And for the recycling companies that buy the vessel for cash and take on the hazardous task of emptying all its valuables, it’s a matter of a months-long salvage resale on steroids.

Cutting the losses

IT’S hard to gauge how much money exactly is made off of cruise-ship recycling. Companies don’t immediately disclose the sale prices of the vessels after relinquishing ownership, and the resale value of their most soughtafter commodity, scrap steel, fluctuates in each global market on a daily basis. Continued on A2

PESO EXCHANGE RATES n US 48.4010

SHIPS being broken down for scrap metal at the Aliaga ship recycling port in Izmir, Turkey. CHRIS MCGRATH/GETTY IMAGES EUROPE

n JAPAN 0.4628 n UK 62.5825 n HK 6.2438 n CHINA 7.2067 n SINGAPORE 35.4119 n AUSTRALIA 34.0259 n EU 56.5082 n SAUDI ARABIA 12.9066

Source: BSP (October 30, 2020)

SEBASTIAN HARMS | DREAMSTIME.COM

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