BSP looking at money laundering angle in LitePay transactions to PHL from Australia

The Bangko Sentral ng Pilipinas (BSP) is now conducting its own probe into fund transfers using LitePay, a money transfer service supposedly flagged in money laundering allegations in Australia.

The central bank wants to know which local banks may have been receiving laundered funds from Australia, BSP Deputy Governor Chuchi Fonacier said on Tuesday.

“So far we’ve identified other banks that became the recipient of the remittances from Australia. We’re doing a review and then if there is a need for us to do on-site (review) then we will do on-site to see whether banks are complying with anti-money laundering regulations,” she said.

LitePay, a service of Westpac Banking Corp., has allegedly breached anti-money laundering laws.

Australian authorities have earlier said that the company failed to check customers who sent out small funds to countries in Southeast Asia, such as Philippines.

LitePay was made available to the Philippines under a partnership with the Bank of the Philippine Islands (BPI), a partnership which has since been suspended by the bank.

“We  have  suspended  indefinitely  our use of the LitePay facility and have asked WestPac to provide us detailed information about  suspicious  and  possibly  illegal  transactions that may have been coursed  through  us,” BPI said in a separate statement.

“We have also initiated our own investigation to look into various LitePay transactions that may be suspicious and illegal,” the bank added.

Fonacier said BPI has submitted an initial report to the BSP, which is currently under review.

“Sila ‘yung entry point—cross-border from Australia—then nacha-channel sa ibang banks. They have shared with us ‘yung ano, na how much ‘yung nacha-channel sa kanila. Channel lang sila and then it goes to another bank,” she said.

“Other banks na commercial banks and universal banks din. We are still in the process of verifying ‘yung mga na-share na information,” Fonacier added.

The review will be tedious as the transactions from Australia to the Philippines are mostly retail and small in amounts, the BSP official noted.

“What makes this one different is that small transactions. So hindi siya required to be reported to Anti-Money Laundering Council (AMLC) kasi nga 'yung threshold hindi naman umaabot dun,” Fonacier said.

Under Philippine laws, single transactions worth P500,000 within one banking day are required to be reported to the AMLC for a review of money laundering practices.

“Tinitignan whether there was some kind of behavior pattern doon sa transactions. So that’s still what we are looking at,” Fonacier said.

“Depende sa findings namin, we will get in touch with counterparts in Australia after we (see) the results,” she added.

Fonacier said the investigation into the transactions will most probably extend until early 2020.

“With the holiday season, siyempre. Normally kasi busy rin for reports and all, baka this will flow until January 2020,” she added.

“The  alleged  failures  of  WestPac’s  LitePay  facility are a very serious concern  to us. We are prepared to work with the regulators and authorities to  ensure  compliance  with both domestic and global money laundering laws and regulations,” BPI said. —VDS, GMA News