RCBC reported $81-M transaction as 'suspicious' a day after AMLC probe

Rizal Commercial Banking Corp. (RCBC) reported the $81-million transaction as "suspicious" a day after the Anti-Money Laundering Council (AMLC) began to investigate the scheme.

While the move by RCBC was within the 10-day allowable period for reporting questionable transactions, any fund movement involving more than $500,000 must be reported to the council within one banking day.

Bangko Sentral ng Pilipinas (BSP) Governor Amando Tetangco Jr. received a phone call from the Bangladesh central bank governor on February 11, requesting for help in investigating and recovering the funds, AMLC Executive Director Julia Bacay-Abad told a press conference on Tuesday.

But RCBC reported the $81-million transaction as "suspicious" to the AMLC only on February 12.

The funds were transferred from the Bangladesh Bank's account at the Federal Reserve Bank of New York to four accounts at the RCBC Jupiter branch a week earlier, on February 5.
 
"We did not realize that something is irregular. Not until February 11 when our governor received a call from the central bank of Bangladesh," Abad said.

In the present set up of the banking system, transactions – deposits, withdrawals, fund transfers, and remittances – involving a cumulative amount of more than $500,000 must be reported to the AMLC within one banking day.

Such transactions will be reviewed and may be considered "suspicious" if in any way related to an unlawful activity. The "suspicious transaction" must then be reported to the AMLC within working days.

RCBC would know

Asked if there may have been a lapse the way RCBC handled the $81-million transaction, Abad answered shifted the burden upon the bank.

"There's no way for us to know... The bank could have determined (the transaction to be suspicious) on their own."

In the same briefing, Abad fended off allegations that the council was slowly in responding to the problem.

"We learned about this thing on February 11 and immediately conducted an investigation," Abad said.

An initial investigation happened on February 12 to 13 in which case the transactions were confirmed to have happened in the country.

"From there we required the concerned banks or financial institutions to submit identification documents to at least four bank accounts – submit account opening forms pertaining to the accounts," Abad noted.

In the working days that followed or on February 15 and 16, Abad said the AMLC received the identification documents from RCBC. These included photocopies of the identification cards of the supposed account holders from the Land Transportation Office (LTO), the Bureau of Internal Revenue (BIR), and the Social Security System (SSS) – that turned out to be bogus documents.

"We did all these verification," Abad said.

March 1 freeze order

On February 16, the AMLC contacted its Bangladesh counterpart and two officials from the Bangladesh central bank touched base with them in the Philippines.

"They already brought with them the requested documents we would need for filing a petition for freeze authenticated by the Philippine embassy. From there we submitted the recommendation (to freeze the accounts) to the council," Abad said.

The AMLC met on February 22, ahead of the February 24 schedule, and it submitted a recommendation for a freeze order and an application for bank inquiry with the Court of Appeals.

"We prepared initiatory pleadings, prepared petitions to the Office of the Solicitor General (OSG). Wednesday (February 24) we were able to transmit everything to the solicitor general," Abad said.

This was then followed by a thorough review by the solicitor general who signed the petition for a freeze order at around 3:30 p.m. or 4:00 p.m. of February 26 (Friday).

"Hindi umabot ng 4:30 p.m. sa Court of Appeals (CA)... Receiving sa CA 4:15 p.m. lang," Abad said.

The petition was filed before the CA on February 29. The freeze order was issued on March 1. – VDS, GMA News