Tan urges anti-fraud body for bank group


Tan urges anti-fraud body for bank group

March 15, 2016 10:47 pm

Amid an ongoing money-laundering investigation into a transaction involving the bank which he heads, Rizal Commercial Banking Corp. (RCBC) President-CEO Lorenzo Tan urged the future leadership of the Bankers Association of the Philippines (BAP) to form a monitoring body to help authorities in ensuring anti-financial crime compliance.

Having denied allegations of his involvement in an $81-million money laundering transaction at RCBC’s Jupiter Street, Makati branch, Tan, who is also the president of BAP, said during the group’s leadership turnover ceremony on Monday, the money laundering issue is unprecedented and has dire implications for the industry.

“We need to face up to the challenges which introduce 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,” he said.

Tan said he strongly recommended to the incoming BAP Board and to the association’s members the immediate creation of an Anti-Financial Crime Committee (AFCC).

To be headed by a BAP board member, the committee, Tan said, would have a specific mandate to look into compliance with anti-financial crime measures, including those addressing money laundering, terrorist financing, and financial sanctions, in close coordination with the Anti-Money Laundering Council (AMLC).

Tan said the AFCC should also be tapped to streamline and standardize industry definitions of financial crime terminologies, standards, and procedures, including know-your-client, politically-exposed persons, high-risk clients, and special category clients.

A comprehensive strategy needs to be immediately implemented in close coordination with the Bangko Sentral ng Pilipinas (BSP), the AMLC, Congress, enforcement agencies, and all financial institutions in order to prevent incidents similar to the RCBC case from recurring, he added.

“The industry has to have the singlemindedness for the consistent implementation of policies across all banks and financial institutions,” Tan pointed out.

He stressed that all banks must participate and contribute their expertise, because the current money laundering scandal has highlighted banks’ vulnerabilities and exposed banks’ directors, officers, and employees to compliance, operational, and reputational risks.

“The BAP has the means and resources to make this happen, so let us do it,” he said.

“Lastly but equally important, 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 banks’ boards of directors,” he concluded.

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