Ultimately, the issue that needs to be zeroed in on the ongoing investigation of laundering by a Philippine bank of multi-million dollars of stolen money is the liability of Rizal Commercial Banking Corporation (RCBC) as an institution.
The trail of the $81 million robbed from the account of the Bangladesh central bank by cybercriminals has exposed rogue elements at RCBC.
So far, the country’s Anti-Money Laundering Council (AMLC) has filed criminal cases against Maia Santos-Deguito, the RCBC branch manager, and 2 businessmen. These are pending with the justice department.
It was at the Jupiter branch, headed by Santos-Deguito, where the $81 million landed in 4 fictitious accounts and was eventually traced to casinos.
But beyond the liabilities of individuals, the Bangko Sentral ng Pilipinas (BSP), as the country’s financial regulator, should determine the liability of RCBC. It is clear, by now, that RCBC had lax controls.
A Senate probe showed that RCBC allowed the withdrawal of the $81 million despite a stop payment from the Federal Reserve Bank of New York which holds the account of the Bangladesh central bank.
The RCBC case is not an isolated one. Other banks in different parts of the world have been heavily sanctioned for loose controls and their inability to prevent laundering dirty money.
In 2012, HSBC was fined a record $1.9 billion for its “role in aiding money laundering by Mexican drug cartels.”
Last year, Sweden’s Financial Supervisory Authority fined 2 of its leading banks the maximum amounts under their law for “major deficiencies” in their compliance with strict money-laundering regulations.
Similarly, Barclay’s Bank in the UK had to pay penalties last year because it “ran the risk of being used to launder money or finance terrorism. ”
The BSP can learn lessons from its counterparts in these countries.
Two other major issues that have been crying to be addressed have become more urgent.
First, the anti-money laundering law should be strengthened. It is about time that casinos be covered in the sectors to be monitored by the AMLC. Why they were not included in the law appears to be a result of a vigorous lobby.
Second, bank secrecy laws should be relaxed. No less than BSP Governor Amando Tetangco Jr has called for this to sea change to allow them to track illegal fund transfers.
As the Foundation for Economic Freedom has pointed out, the entire Philippine financial system is “put at risk” when anti-money laundering authorities are “blocked from uncovering the truth.” The damage goes well beyond RCBC.
We hope the next administration will not forget lessons from the $81-million heist – and include these corrective measures in its legislative agenda. For now, our presidential candidates should weigh in and tell us what they propose to do should they win. – Rappler.com
There are no comments yet. Add your comment to start the conversation.