Fine banks that take in dirty money too–Joker Arroyo


Sen. Joker Arroyo

MANILA, Philippines—Unless Philippine laws penalize a bank that accepts cash deposits of questionable origin, it would be useless to approve amendments to the Anti-Money Laundering Law (Amla), a senator has pointed out.

Sen. Joker Arroyo said he would insist on a provision in the second bill of Amla amendments to include severe penalties for banks that take in dirty money deposits, saying that money laundering could not take place without the banks’ acquiescence in the crime to hide illegally acquired wealth.

Arroyo said banks in the United States had been meted out stiff penalties for accepting dirty money deposits.

The Philippine government should take its cue and do the same, otherwise, Arroyo said, amendments to the Amla would just be regarded as a pallid attempt to placate the global-based Financial Action Task Force (FATF) which monitors terrorist financing and money laundering around the world.

The FATF had warned that the Philippines would be included in its blacklist unless it amended and put more teeth into its current Amla.

Inclusion in the blacklist would make it more difficult for Filipinos to remit or receive funds from overseas.

Arroyo said that at present, the Anti-Money Laundering Council (AMLC) freezes the deposits of an individual suspected of laundering cash through banks.

“How about the bank that accepted the money? That is crucial. The AMLC says the bank should not be penalized, only the owner of the dirty money. But laundering would not have taken place if the bank did not accept the money in the first place,” Arroyo said.

The senator noted that banks are supposed to follow a “know your client” policy that requires its officers and employees to know the background of their depositors.

He said the rule becomes more necessary “if very big amounts being deposited are not commensurate to the financial standing of a depositor.”

“We cannot make it easy for a money launderer to hide his loot,” he said.

Arroyo lamented that the AMLC would rather look the other way when it explains that banks also have to adhere to a rule that protects their depositors.

Arroyo noted that banks in the US found accepting dirty money are first made to explain why they accepted the deposit. Then they are meted out penalties for repeated infractions.

Arroyo e-mailed to the Inquirer a list showing the fines meted out to banks in the US that accepted dirty money.  These include HSBC which paid $1.9 billion (P75 billion); Chartered Bank, $667 million (P26 billion); ING, $619 million (P24 billion); Credit Suisse, $536 million (P21 billion); ABN AMRO, $500 million (P20 billion); Lloyds, $350 million (P14 billion), and Barclays, $298 million (P12 billion).

Arroyo recalled that the AMLC recently announced it had collected P3.1 million—about P250,000 a year—in penalties from local banks in the last 12 years.

“You can imagine that for the past three years the total of penalties paid by American banks was $190 billion. That translates to P7.8 trillion. So why should the AMLC protect our banks,” he said.

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  • themask celestial

    An ordinary persons opening a bank account with starting deposit of 2000 andaming hinihingi ang banko, 2 ID’s, so kung tindera ka lang sa palengke ang never worked in an office, forget about opening a bank acct.

  • imok2012

    Agree with Sen. Arroyo.  Scams like Aman Futures would not have been difficult to pull off if their bankers were more critical of the inordinate transactions that passed thru their banks daily. Unless the banks turned a blind eye, the sheer volume of transactions and amounts that went thru Aman’s accounts were a clear give-away that something wrong was going on. 

  • vilmavee

    Should not your bank too be penalized for accepting your deposits of questionable origin, specifically the P1.6M largesse?  Need we say more?

  • Patalastas

    Based on the comments here, a number of the readers understand this law and how it should be implemented.  Unfortunately, a lot more of us are skeptical and do not understand it.  Bringing in all these money does not help honest people and the government.  Only who launder money and Banks who profit from investing it, actually benefit.  For one, these moneys are not properly taxed.  I know that it will take a lot of education, but we have to start somewhere.  Also, it is true that there have been fines for Libor fixing, but the larger amounts have been due to money laundering and transacting with countries against US sanctions.

  • Patalastas

    Totally agree.  Severe monetary penalties must be imposed on Banks.  Violation of anti money laundering law should also be criminal.  This way the Banks and its management have a big stake when they collaborate with criminals laundering money.  If the current administration is really sincere in its anti-graft efforts, this type of stringent law should be passed.  If there is no severe repercussion for Banks, it will only fail.

  • glycerlean

    kalokohan yan…so everytime pala na mag deposit ang depositor ng malaking pera eh suspect na sya? mejo improper ata kun tanungin ung mga cliente kung san galuing ung pera? pano na ung bank secrecy law?

    • Patalastas

       Unfortunately, kailangan natin iyan.  HIndi naman basta malaki and deposito, suspect ka na agad.  Ito ay dapat investigahan ng bangko.  Sa ibang bansa, responsibilidad ng Bangko na alamin ang pinanggalingan ng deposits.  Ika ng, know your client and customer identification.  Ang bank secrecy is about the bank not divulging personal information to other parties.  If there is suspicion of money laundering, Banks have an obligation to report to the anti-money laundering authorities, who should investigate discreetly.  Kung ayaw nating ng corruption, isa ito sa dapat nating ipa-iral.

  • orchid

    The government have to  allow investigation of dollar or foreign currency Philippine bank accounts of suspected money launderers to eradicate laundering problems by local and foreigners using their own bank accounts. This confidentiality clause of foreign currency deposits is crafted for corrupt politicianns and citizens. 

  • The Truth

    Now the banks needs to audit a $10,000++ depositors? Another pea head in the senate

    • FernandoBusi

      Nah most banks skip $10K usually they check $50K and up transactions. 

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