LATE last month, the Anti-Money Laundering Council (AMLC), mentioned that it is “ready to step into” the probe of the $2.1 billion missing funds of the German financial technology leader Wirecard AG. I hope it is able to do this.
Two major Philippine banks, BDO and BPI, have been involved as bank employees have allegedly issued certifications that both banks have the missing funds.
AMLC is mandated to make sure that the Philippines is not used for laundering the proceeds of any unlawful act.
I have not heard if there have been any developments.
Over the years, I have gained the impression that major banks are able to keep relevant government instrumentalities (Bangko Sentral ng Pilipinas and AMLC) at arms length. This means that the banks carry out their own investigations. They then control the narrative as to what details are released to the public.
The $81 million cyberheist in which the funds, stolen from Bangladesh Bank’s account in the Federal Reserve Bank of New York, was sent to four accounts in RCBC’s Jupiter Street branch and then successfully laundered, allegedly through casinos. It is not clear to me that either BSP or AMLC were able to carry out their own investigations to ascertain what happened. Instead, RCBC was able to give its own version of events without rigorous independent verification. Yes, RCBC was fined P1 billion by BSP but this did not explain the whole story as to who did what when.
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The Philippines does not enjoy an unblemished reputation when it comes to its banks and their ability to operate with international standards of probity.
Republic Act 9160 or the Anti-Money Laundering Act of 2001 was passed as a result of meeting international commitments to combat financing of terrorism.
AMLC is currently trying to avoid the Philippines from being put on the gray list of Paris-based global watchdog Financial Action Task Force (FATF).
After all, the 2016 RCBC cyberheist which was successfully pulled off in the Philippines was a complete failure in Sri Lanka where, at the same time, $950 million was sent, Sri Lanka instantly recognized the fraudulent intent and immediately returned the funds to Bangladesh Bank in New York.
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It is a challenging time for the banking sector. Applications are now being implemented which enable many more transactions to be made through electronic payments. We are far from being a cashless society but if customers are able to make electronic payments without adverse experiences, the benefits will be tremendous.
Already many are experiencing the benefits of not having to queue when paying utility bills.
I have noticed, however, that the innovative implementation of electronic payments systems are appreciated and acted upon by Millenials and Generation Z. – that is those born since 1981.
Senior citizens, I believe, need more help in gaining the confidence necessary to use the systems. Banks noticed the same phenomenon when ATMs were first introduced.
I hope, therefore, that BSP will be able to enhance its consumer protection procedures with this new and challenging environment.
My experience is that banks need to cooperate more wholeheartedly with BSP when consumers are subject to systems failures.
BSP Governor Benjamin Diokno supports amendments to the Philippines’ deposit secrecy laws to enable supervisors and law enforcement agencies timely access to deposits.
This, hopefully, will mean that banks will be less able to use bank secrecy to cover up staff misconduct./PN
