AMLA, 'know your customer' rules up for review

MANILA, Philippines - Anti-money laundering regulations, including bank rules on customer knowledge, are up for review amid the $81-million heist that has rattled the entire Philippine banking industry.

"The Governor has actually already ordered to review AMLA regulations," said Emmanuel Dooc, Insurance commissioner and member of the Anti-Money Laundering Council (AMLC).

The AMLC is chaired by Bangko Sentral ng Pilipinas (BSP) Governor Amando Tetangco Jr. 

Pressed for details, Dooc told reporters on Thursday: "Everything will be reviewed. The KYC is embedded in the AMLA, so it is included."

Under Republic Act 9160 or the Anti-Money Laundering Act (AMLA), banks and other financial institutions, including remittance centers and pawnshops, are mandated to institute "know your customer" (KYC) rules that ensure the legitimate source of funds.

Customer identification requirements may include, but not limited to, knowing their name, address, nature of work, date and place of birth, nationality, and their contact numbers.

AMLA rules also require covered institutions to maintain a system that will allow them to verify the existence of both their individual and corporate clients.

The existence and practice of KYC rules was one of the questions by legislators probing the $81-million money laundering case that saw funds from Bangladesh Bank illegally transferred to local casinos.

Five accounts at the Jupiter Branch of the Rizal Commercial Banking Corp., where the funds allegedly were channeled, are now under scrutiny for being fictitious.

During the Senate hearing, at least one of the accounts was said to have been opened by branch manager Maia Santos-Deguito for businessman William Go without his consent. 

For his part, Dooc admitted "there seemed to be lapses", although so far, these were more evident in the implementation than the actual policies.

"It would appear that it's in the enforcement. We believe we have a good law," he told reporters. 

Sought for comment, Astro del Castillo, managing director of First Grade Holdings Inc., said while he cannot exactly point out what is wrong with the law, a review will be welcome.

"For me, I think the process is already stringent and the source of funds are being monitored by financial institutions," Del Castillo said in a phone interview.

"But the only good thing about this controversy is now everyone is in the table and everyone acknowledges that there may be something wrong which we need to find out," he added.

For now, Dooc said AMLC will strengthen its coordination with other government agencies, particularly those covered institutions required to report to the inter-agency body.

He reiterated however the need to include casinos in the list of entities, something which gaming regulators have already expressed support to.

In 2013, Republic Act 10168 left out casinos in the expanded list of reporting bodies and predicate crimes to money laundering.

"Definitely, we want to fast track the passage of the casino bill, but as announced even by Malacanang, we have no more time to do that during the (16th) Congress," he said.

"This will now be a concern that should be addressed to the succeeding administration," he added.

Meanwhile, Dooc reiterated that the AMLC is doing its best to track down the money to return it to Bangladesh.

"They cannot doubt the resolve of AMLC and even the Senate to resolve this case," he said.