Drilon: Do not burden 42,000 real estate agents and brokers with reporting covered and suspicious transactions

Senate Minority Leader Franklin M. Drilon rejected a proposal to pass on to 42,000 real estate agents and brokers the burden of reporting covered and suspicious transactions, saying it should be done by the Land Registration Authority or the Bureau of Internal Revenue (BIR).

Drilon blocked a proposal under Senate Bill 1412 which would require all real estate developers and brokers to report to the Anti-Money Laundering Council single cash transactions in excess of P1 million, and other suspicious transactions within five (5) working days from occurrence thereof. If we approve this, all 42,000 real estate agents and brokers will have to do the following: establish and record the true identity of their clients based on official documents, and maintain a system of verifying the true identity of their clients; record, maintain and store all documents; and report to AMLC all covered and suspicious transactions, according to Drilon.

"Under AMLC's proposal, brokers and agents will now be required to ask their clients where they got their money. And they need to submit tons of requirements to the AMLC. Why burden agents and brokers with all these paper works?" he said.

Note that if the real estate brokers and agents fail to report these transactions to AMLC or they fail to keep the records, they may be imprisoned from six months to four years or be made to pay a fine of not less than P100,000 but not more than P500,000, or both.

"I think this is too much. Let me warn AMLC that we must always be guided by the requirements of the Constitution. We must always pass a law that is grounded on reason and free from arbitrariness," Drilon warned.

Drilon further pointed out that under the current law, AMLC can already require the Land Registration Authority and all its Registries of Deeds to submit to the AMLC, reports on all real estate transactions involving an amount in excess of Five hundred thousand pesos (P500,000.00) within fifteen (15) days from the date of registration of the transaction, in a form to be prescribed by the AMLC. It may also require the Land Registration Authority and all its Registries of Deeds to submit copies of relevant documents of all real estate transactions.

Drilon, who was the Senate President when the AMLA was passed in 2000, said requiring 42,000 agents and brokers in the country to submit a report to AMLC for every P1 million transaction, the threshold being proposed, is too much a burden to individuals who are only trying to make a living.

"I can't understand why we will impose the burden on the private sector. Itong real estate agents mga individual practitioners, maliliit lang po ito, mostly housewives who would engage in real estate brokering to earn income on the side. Can you imagine the burden? We are not talking here about real estate brokers as institutions, you have thousands of real estate brokers, mom and pop operations, housewives, somebody in the family who, to earn extra income, would go into real estate brokering," Drilon said.

"Wala na pong gagawin itong real estate agents kung hindi magreport sa AMLC. And we are talking about real properties here, hence the threshold of one million is too low. It will cover almost all real estate transactions," he added.

Drilon said the reports will only file up in the AMLC without being examined. He further questioned the capacity of AMLC to sift through all the papers and analyze the same.

Drilon said he hopes for the Philippines "to see the light at the end of the tunnel" insofar as compliance with the FATF is concerned as he lamented why the country always gets regular "threats" from the FATF despite having amended the AMLA many times to address the task force's concerns.