Senate Concurs in Ratification of Cybercrime Convention, Agreement Establishing AMRO, and Double Taxation Avoidance Treaties

Senator Loren Legarda, Chair of the Senate Committee on Foreign Relations, today said that the Senate has unanimously concurred in the ratification of five (5) treaties covering the Philippines’ Double Taxation Avoidance Agreements (DTAA) with Mexico, Thailand and Sri Lanka, the Cybercrime Convention, and the Agreement on the ASEAN+3 Macroeconomic Research Office (AMRO).

With 20 affirmative votes, zero negative vote and no abstention, the Senate on Monday (February 19, 2018) approved on third and final reading five resolutions seeking the Senate’s concurrence in the ratification of the DTAA Between the Philippines and Mexico (Senate Resolution No. 613), Agreement Establishing the AMRO as an International Organization (SRN 614), DTAA Between the Philippines and Thailand (SRN 615), Budapest Convention on Cybercrime (SRN 616), and DTAA Between the Philippines and Sri Lanka (SRN 617).

The Budapest Convention on Cybercrime aims to address the threats posed by cybercrime and facilitates multilateral cooperation and enhanced collective capability to suppress cybercrime.

“The Internet improved many things and ushered in a more intertwined humanity. But it also gave rise to numerous unintended consequences, foremost of which is cybercrime. Since cybercrime, by its very nature, is borderless, simultaneous and persistent, cooperation, coordination, and collaboration with other countries is therefore vital,” said Legarda.

A major feature of the Convention is the track towards the harmonization of domestic legal procedures of state parties, with the intention of, among others, addressing the emergence of so-called ‘safe havens’. These ‘areas’ are created when certain activities are not criminalized in a specific country. This results in individuals and/ or organized groups being able to act with impunity in committing offenses in these countries.

“This treaty is very important to protect our people from cybercrime especially since the country is the number one haven for those committing child pornography,” said Legarda.

According to the UNICEF, the Philippines is the number one global source of child pornography and a hub for the live-stream sexual-abuse trade. Eight out of every 10 Filipino children are at risk of online sexual abuse or bullying.

Meanwhile, the DTAAs generally provide for the elimination of double taxation between the Philippines and Thailand, Sri Lanka and Mexico.

“These Double Taxation Avoidance Agreements are intended to promote international trade and investment in several ways, the most important of which is by allocating taxing jurisdiction between the Contracting States so as to eliminate or mitigate double taxation of income,” Legarda explained.

To promote cross-border trade and investment, these agreements seek to (1) allocate taxing jurisdiction so as to avoid double taxation; (2) reduce source-State taxation; (3) prohibit discrimination based on alienage, foreign organization, or foreign ownership; and (4) promote resolution of situations in which the income taxable by one Contracting State as opposed to the other Contracting State is in question.

“With regard to better enforcing domestic tax laws, these treaties also provide that Contracting States exchange information under the Exchange of Information article. This is necessary since the tax systems of most countries rely, to a very large extent, on voluntary compliance, which leaves room for abuse. Thus, it is important that a Contracting State be able to obtain from its treaty partners information about persons and activities subject to taxation in that State,” said Legarda.

Finally, the Agreement Establishing the ASEAN+3 Macroeconomic Research Office (AMRO) will constitute AMRO as an international organization with full legal personality.

The AMRO, initially established as a company limited by guarantee in Singapore, aims to contribute to securing the economic and financial stability of the region through the conduct of regional economic surveillance and by supporting the implementation of the Chiang Mai Initiative Multilateralisation (CMIM), a multilateral currency swap arrangement among ASEAN+3 members.

This international orgaization status will provide the AMRO with a higher profile, at par with other premier international institutions such as the Asian Development Bank (ADB), the International Monetary Fund (IMF) and the World Bank.

“The international organization status will afford the AMRO an intangible capital that can give it access to intelligence, research and other resources owned by other international organizations, and regional and global fora. This will provide greater macroeconomic surveillance capability for the institution, and consequently benefit the Philippines as one of its clients together with other ASEAN+3 Members,” said Legarda.