Bank Executive Says Money Laundering Issue To Keep Industry Up And Around

The money laundering activity that has put in the center a major Philippine universal bank should not be considered as purely negative but, on the flip side, should be taken positively.

East West Banking Corp. (East West Bank) President and Chief Executive Officer (CEO) Antonio C. Moncupa said the advantage of this situation is that it makes people aware of their responsibilities.

“Look at the positive side. It brings to the fore the issue and it reiterates the need for banks to be conscious about their efforts to control money laundering. So it’s positive,” he said.

Moncupa, a former officer of the Bankers Association of the Philippines (BAP), stressed that the issue “makes everybody aware of what we should be doing.”

Yunchengco-led Rizal Commercial Banking Corporation (RCBC) is now in the middle of controversy after its Jupiter, Makati branch was found to have been used to launder about USD 81 million of funds, remitted from the dollar account of the Bangladesh Bank, the said country’s central bank, with the Federal Reserve of New York in February 2016.

During the Senate hearing on the issue Tuesday, Anti-Money Laundering Council (AMLC) Executive Director Julia Abad said the Council first learned of the issue on Feb. 11, 2016 when Bangladesh Bank Governor Atiur Rahman asked Bangko Sentral ng Pilipinas (BSP) Governor Amando Tetangco Jr. for assistance to trace and “possibly freeze” the stolen money.

AMLC conducted its own investigation and preliminary results showed that remittances were indeed received by four accounts maintained with the RCBC Jupiter branch.

These accounts were owned by one Michael Francisco Cruz and received USD 6.029 million; Jessie Christopher Lagrosas, USD 30.28 million; Alfred Vergara, USD 19.999 million; and one Enrico Vasquez, USD 25.001 million.

These were opened in May 15, 2015 and remained untouched until last February, Abad said.

Funds from these four accounts were immediately withdrawn and transferred to an account said to be owned by one William So Go that was opened only on Feb. 1 this year.

During the same hearing, Go, owner of Centurytex Trading, denied owning the account and reiterated his earlier statement that it was RCBC Jupiter branch manager Maia Deguito who opened the account without his consent.

Abad said results of their investigations also showed that after the funds were consolidated in the account allegedly owned by Go, these were transferred and exchanged from US dollars to Philippine pesos through the remittance firm Philrem, which has an account in RCBC Greenhills, and transferred to the account of Solaire, which received USD 29 million; Midas Hotel and Casino, USD 21.245 million; and of one Win Khang Zhou, USD 30.691 million.

Abad said inclusion of casinos as among the covered entities under the Anti-Money Laundering Act (AMLA) could have possibly deterred this problem because unscrupulous individuals would not be able to see a gap on the law.

Relatively, Moncupa said the country’s anti-money laundering law is “more than sufficient” and proof to this is the country’s removal from the Financial Action Task Force’s (FATF) blacklist in 2005 due to measures put in place to address money laundering loopholes.

“The issue is not the adequacy of the rules. I think it’s the consciousness of how we do these things. Just follow the rules and you’ll be fine,” he added. (PNA) RMA/JSV/EDS