BSP: Philrem may be held liable for not knowing owner of illicit funds

 

Money remittance agent Philrem Service Corp. may be held liable for its failure to scrutinize the source of the funds believed to be part of the $81 million stolen by hackers from Bangladesh Bank's account in the Federal Reserve Bank in New York and diverted to casinos in the Philippines, a Philippine central bank official said in Thursday's Senate inquiry into the money laundering case.

"Based on what we've heard today, there may be basis to cite them for violating regulations," said Bangko Sentral ng Pilipinas Deputy Governor Nestor Espenilla Jr. when asked by Senator Sergio Osmeña III whether he sees a violation of regulations on fund transfers.

Philrem president Salud Bautista admitted during the hearing that she only relied on the information given by Maia Santos-Deguito, manager of Rizal Commercial Banking Corp. (RCBC) branch on Jupiter Street in Makati City.

It was Deguito who tapped Philrem's services to transfer multi-million dollars under businessman William Go's account to casino junket operator Wei Kang Xu, Eastern Hawaii Leisure Company and Solaire Resort & Casino.

Bur for third party reliance to hold, Espenilla said Philrem must have secured certification from RCBC that it knows the customer or in this case, Go.

"The certification should say that RCBC in this case has in its custody all the minimum information of the customer and that the remittance company, Philrem, has the ability to obtain identification documents from RCBC without delay," Espenilla said, citing BSP Circular No. 706 or the Updated Anti-Money Laundering Rules and Regulations issued in 2011.

Bautista said they followed the law to the best of their knowledge even as she apologized for not looking into the background of the fund's source. 

The Senate investigation will resume on March 29 after the Holy Week break.

'We will not profit from tragedy'

Philrem, in a statement issued late Thursday, said it has no interest in profiting from questionable fund sources, as it reiterated its statement in the Senate hearing that the company will return "every centavo our company earned from this series of transactions" to the Bangladeshi government.

The company said it earned P10.4 million from the handling fee it charged for facilitating the money transfer.

"As stated in front of the Senate during today's session, PhiRem Service Corporation would like to correct a misinterpretation of what we said from the last hearing. There are certain transactions that we undertake for which we have a flat fee—this is usually given to OFWs to ease remittance. However, when we deal with other financial transactions, we apply a handling fee and this is variable depending on the type of transaction at hand. For the transaction in question, our handling fee was ¼ of 1 percent. This fee was equivalent to the amount of P10,474,654 in earnings.

"Having clarified that, we would like to say this: trust is an integral part of our business. PHILREM has no interest in profiting from any questionable sources. We accepted this transaction with the understanding from the receiving bank that this was a clean and legitimate transaction. It now seems evident to us that this was not true, and we are deeply regretful for our unknowing participation in this shameful chapter in Philippine history.

"We will prepare a check as soon as the Bangladeshi delegation confirms to us who the payee will be. That check will represent every centavo our company earned from this series of transactions, equivalent to P 10,474,654. We are ready to return it to the Bangladeshi delegation not only as an apology, but as a symbol of a Filipino company willing to help them find justice," the statement read. — APG, GMA News