Anti-financial crime arm in BAP eyed | Inquirer Business

Anti-financial crime arm in BAP eyed

Identify loopholes in existing laws, regulations
By: - Reporter / @bendeveraINQ
/ 02:03 AM March 16, 2016

The outgoing head of the Bankers Association of the Philippines (BAP), whose bank is now embroiled in alleged money laundering, on Monday sought the creation of an anti-financial crime committee within the industry group whose members include the top executives of the country’s biggest lenders.

After three consecutive terms as BAP president, Rizal Commercial Banking Corp. (RCBC) president and chief executive Lorenzo V. Tan turned over the position to his elder brother, Nestor, who is the president and chief executive of BDO Unibank Inc., the biggest bank in the country.


The younger Tan was absent during BAP’s cocktail reception Monday evening, a day before the Senate probe on the alleged $81-million money laundering that penetrated the banking system through RCBC.

In a speech during a closed-door meeting with BAP members and newly elected officers, Tan said the alleged money laundering transactions were “unprecedented and [have] dire consequences on how we conduct business in our industry.”


“We need to face up to the challenges, which introduces systemic and institutional risk. We have threats that originate from sources outside of our borders and beyond the reach of Philippine legal jurisdiction. Threats that require new risk mitigating strategies and creative financial crime preventive tools,” Tan said.

“Given this unparalleled menace facing the industry today, I strongly propose to the incoming board and to the members of the association the immediate creation of a BAP anti-     financial crime committee to be headed by a BAP board member with the specific mandate to look into financial crime compliance, anti-money laundering, counter-terrorist financing and sanctions screening,” the RCBC chief said.

According to Tan, the committee he was proposing would look into all means possible to help strictly implement relevant laws and regulations, including close coordination with the Anti-Money Laundering Council (AMLC).

The committee would also identify loopholes in existing laws and regulations and lobby hard with our legislators, regulators and banks’ governance boards for the needed amendments. It would likewise streamline and standardize industry definition of financial crime terminologies and procedures including know your client, politically exposed person, high risk client and special category client standards, Tan added.

“In close coordination with the Bangko Sentral ng Pilipinas, the AMLC, Congress, law enforcement agencies and all financial institutions, a comprehensive strategy needs to be immediately implemented in order to prevent similar incidents from recurring. The industry has to have the single-mindedness for the consistent implementation of policies across all banks and financial institutions,” Tan said.

The RCBC chief urged all banks to “participate and contribute their expertise because this issue highlighted our vulnerability and exposed the banks’ directors, officers and employees to compliance, operational and reputational risks.”

“We must strengthen our compliance group, empower each and every staff to ensure compliance and adherence to the risk governance framework prescribed by each of our bank board of directors,” he said.

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TAGS: AMLC, Anti-Money Laundering Council, Bankers Association of the Philippines, BAP, Laws, RCBC, regulations, Rizal Commercial Banking Corp.
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