The Philrem Service Corpoation, which is being involved in the alleged money laundering of about US $81 million stolen from Bangladesh Bank (BB), faces possible charges for violation of Bangko Sentral ng Pilipinas rule on third party reliance.
During the Senate hearing on Thursday, Philrem owner Salud Bautista was asked by Senators if her company properly checked the identity of Kim Wong, also known as Kam Sin Wong, a casino owner who reportedly received part of the stolen money, when the company delivered multimillion dollars to him in February 2016.
Bautista repeatedly told lawmakers Philrem leaned on the third party reliance rule of the central bank, hoping that Rizal Commercial Banking Corporation (RCBC) followed the know-your-customer rule, which requires clients to submit valid identification documents.
Anti-Money Laundering Council (AMLC) Executive Director Julia Bacay-Abad, during the same hearing, said remittance companies could tap the third party reliance rule of the central bank, particularly Section X806.1.e.3 of the central bank Circular 706 (series of 2011), but they should still conduct their own due diligence process.
Violators of the rules included in the said Circular will be subjected to written reprimand, suspension or removal from the office they are currently holding, and disqualification from holding any position in any covered institution.
They will also be slapped with “monetary penalties computed in accordance with existing regulations and in coordination with the Anti-Money Laundering Council.”
Bangko Sentral ng Pilipinas (BSP) Deputy Governor Nestor Espenilla Jr., during the said Senate hearing, said remittance companies need to register with the central bank in line with the Anti-Money Laundering Act (AMLA).
He explained that for these companies to be able to tap the third party reliance rule, they need to first secure a sworn certification that says the bank has conducted the KYC and face-to-face identification, that the bank has the minimum information on the customer, and that the remittance company can secure identification documents from the bank without delay.
Asked by Senator Sergio Osmena III if the central bank will penalize Philrem for violation of the third party reliance rule, Espenilla said this is possible.
“They (Philrem) may rely based on those requisites but as pointed out earlier by the AMLC Executive Director the ultimate responsibility for customer due diligence lies with the remittance agents,” he said.
Related story and video coverage here: Senate hearing on the alleged US $100-million money laundering in PH, second part
“Based on what we’ve heard today, Mr. Chairman, there maybe basis to cite them for violating our regulations,” he added. (from PNA report by Joann Santiago)