BSP probes possible rule breakers

Published July 18, 2020, 10:00 PM

by Lee C. Chipongian

The Bangko Sentral ng Pilipinas (BSP) is looking into cracks in the Wirecard scandal to see if anybody – a bank or individual – is guilty of breaking a BSP rule or regulation.

“Investigation by the BSP’s Financial Supervision Sector, which focuses on determining whether any banking regulations were breached, is well underway,” the BSP said in a statement Friday.

The BSP also said it will know immediately if a transaction as big as $2.1 billion has passed through the local banking networks and system.

 “We have systems in place that send us red flags in case of huge/suspicious transactions,” the BSP stressed. “As has been previously stated, current available evidence shows that the money did not enter the Philippine banking system.”

The central bank said they and “all relevant institutions” including the BSP-led Anti Money Laundering Council (AMLC) will make sure that “clear and credible information is made available to the public” with regards to this issue.

Presently, the BSP and the AMLC have what they call a “multi-pronged investigation” to “determine if illicit funds entered the country.” It said the AMLC, the country’s financial intelligence unit, has probed the matter to see if there were violations of the Anti-Money Laundering Act of 2001 (AMLA).

In the meantime, the BSP reiterated that banks are exercising good corporate governance and effective risk management systems, and have benefited and been under a lot of central bank reforms for many years.

The BSP said banks are subject to “strict regulations” such as disqualification and watch-listing of erring bank officers, and that these rule breakers will eventually be deemed unfit and banned from taking any official positions in banks or non-banks.

The AMLC has its own rules in the identification of the beneficial owner of accounts, as well as guidelines for designated non-financial businesses and professions, which cover the so-called gatekeepers, such as lawyers and accountants, requiring them to comply with their obligations under the AMLA, on know-your-customer requirements, recordkeeping, and transaction-reporting, said the BSP.

 “These measures will be used with their full force against any individual found culpable of wrongdoing,” the BSP said.

The BSP reiterated what BSP Governor Benjamin E. Diokno said during a pre-SONA briefing last July 8, that the central bank and AMLC, and with the National Bureau of Investigation, is “open to coordination with concerned international authorities to hold unscrupulous individuals accountable.”

Diokno said they will collaborate with German regulators and other international agencies to go after persons or companies that commited the fraud.

Diokno has said that the two local banks that were dragged into the Wirecard scandal – BDO Unibank Inc. and Bank of the Philippine Islands  – were not involved with the fintech firm. He also commented that there were no hits to both banks’ reputational risk, that the financial institutions continue to enjoy investor confidence.