The cross-border transfer of $81 million hacked from an account of the Bank of Bangladesh with the Federal Reserve Bank of New York is alarming for the Philippines because it shows a local bank’s non-compliance with regulatory policies, former Justice Secretary Leila de Lima said.
“Despite provisions of the AMLA [the Philippines’ Anti-Money Laundering Law]and regulations of the AMLC [Anti-Money Laundering Council] being already in place, such a huge amount still found its way to what appears to be fictitious accounts opened at the Jupiter Branch of the RCBC without raising any alarm bells from RCBC authorities. This indicates a breakdown in the bank’s compliance with BSP and AMLC regulatory policies,” de Lima said, referring to the Bangko Sentral ng Pilipinas (Central Bank).
RCBC is the Rizal Commercial Banking Corp.
“Banks and other financial institutions should hold the highest level of integrity to continue earning the trust of depositors and investors. As frontliners, these institutions have the responsibility to make sure money cycled into the local financial system remains legitimate,” the former Justice chief said.
De Lima backed the stance of Securities and Exchange Commission Chairman Teresita Herbosa that the Anti-Money Laundering Law should be amended to cover casinos and other establishments known for high cash flows as among the institutions subject to AMLC compliance.
The Senate started its investigation of the issue on Tuesday but RCBC Jupiter Branch bank manager Maia Santos-Deguito refused to answer questions.
De Lima, however, is not convinced of Deguito’s innocence.
“I urge RCBC Bank Manager Maia Santos-Deguito to tell all that she knows. Undoubtedly, either she is the lone culprit or the convenient scapegoat in this crime,” she said.
“But since it is highly unlikely that she was the mastermind, she remains to be the key in unraveling this complex hacking and money-laundering operation, and is therefore indispensable in identifying the people actually behind it,” de Lima added.
The law excludes real-estate property and casino operations as areas of concern, contrary to recommendations of the Financial Action Task Force, an inter-government anti-money laundering watchdog, to include casinos in the list of entities required to report to regulators.