Banks could shed light on CJ dollars: expert

by David Dizon, ABS-CBNnews,com

Posted at May 14 2012 09:25 PM | Updated as of May 15 2012 05:56 PM

MANILA, Philippines – A banking law expert on Monday said the Senate impeachment court may have to summon officials of local banks to testify on Chief Justice Renato Corona’s dollar deposits.

Atty Reynaldo Geronimo said an Anti-Money Laundering Council (AMLC) report on Corona’s dollar accounts all come from reports of local banks.

“The AMLC simply receives the report from the so-called covered institutions…they have to eventually get to the bank and ask the covered institutions to say what do you know of these transactions,” Geronimo told ANC.

Geronimo said Corona cannot deny that he owns the dollar deposits once bank officials are made to testify in court.

“I would think that if he denies that, the bank will be exposed to a malicious report. In self-defense, they might say ‘No, no, no, sir. Here’s the account. We were complying with the law,’” he said.

The banking law expert said the Supreme Court temporary restraining order covers only specific dollar accounts in Philippine Savings Bank, and not other accounts.

“If I read the TRO correctly, it was sought by PSBank to temporarily restrain inquiry into their account not necessarily inquiry into other accounts,” he said.

He added; “The Senate impeachment court, I would imagine, would find it reasonable to ask the different banks to shed light on these transactions.”

Ombudsman Conchita Carpio Morales testified on Monday that Corona had at least $10 million in transactional balances in 82 US dollar accounts in 5 local banks. She said the information came from a report by AMLC Executive Director Vicente Aquino.

PSBank president Pascual Garcia earlier testified before the Senate impeachment court on Corona’s peso accounts but refused to talk about the chief magistrate’s dollar accounts due to possible violation of Republic Act 6426 or the Foreign Currency Deposits Act.

How AMLC learns about suspicious transactions

Geronimo said the AMLC has vast powers to look into bank accounts of persons who are suspected of being engaged in suspicious transactions.

He said under the Anti-Money Laundering Law, banks are required to report any covered transaction that is above P500,000 or its dollar equivalent.

On the other hand, local banks could also report transactions of clients that are “way off the usual ordinary transaction of the client.”

“The law permits you to open as many accounts as you like but there has to be a business purpose or legitimate purpose. For example, I may have an account for my granddaughter or for the education of my daughter abroad or an account to receive payments from my lessees, I could open different accounts for different purposes. I need not tell that to the bank but the bank has the obligation to know me. The know-your-client obligation is one of the obligations under the AMLA law…The bank as a covered institution must know the nature of the business of the client. That is why it is on notice if something suspicious occurs regardless of the amount,” he said.

Geronimo said any bank that has suspicions about a client’s financial transactions could investigate the client further. He said the bank could ask the client directly in a polite way or ask around.

“Ordinarily, the bank will not refuse an account because the branch manager is under pressure to increase the deposits. But they also have the obligation that these are clean money,” he said.

“The branch manager, if I was his lawyer, I would advise him to inquire into the reason why there is this flow of money. It could be he is investing his family’s funds…Amongst bankers, there are trust officers who talk to one another and say ‘Ah, legit yan because he just sold a piece of property.’”