BSP reviews BPI, 10 banks for links to Australian bank linked to dirty money


Posted at Dec 18 2019 03:15 PM | Updated as of Dec 18 2019 10:09 PM

MANILA (UPDATED) - The Philippine central bank said Wednesday it was reviewing transactions of 10 banks, coursed through Bank of the Philippine Islands (BPI), for money that came from Westpac, one of Australia's largest banks that is accused of money laundering.

BPI said it had a remittance tie-up with Westpac, which it suspended last Nov. 24 after news broke that Australian authorities were investigating Westpac.

"Still premature to comment about ramifications. We have to complete our review first," Bangko Sentral ng Pilipinas Deputy Governor Chuchi Fonacier said.

The Bangko Sentral requested for "certain information regarding Westpac LitePay transactions," BPI said, adding it was not facing a formal investigation.

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"When we entered into that agreement, Westpac undertook to do all the due diligence on their side, which is very customary, since they are the sending bank they are responsible that the funds that they send are clean," said BPI president and CEO Cezar Consing. 

Under the partnership forged in 2016, BPI said Westpac clients remitted money to the Philippines using the Westpac LitePay platform. BPI said it "fulfilled" the transactions either by crediting it to the accounts of BPI clients or those of other banks.

From July to October, BPI said 61,687 transactions were coursed through its system, representing 0.27 percent of the total 23 million Westpac transactions.

"The alleged failures of Westpac's LitePay facility are a very serious concern to us. We have always worked closely with the regulators and authorities to ensure continued compliance with both domestic and global money laundering laws and regulations," BPI said.

Consing also said that BPI was not even the largest bank in terms of accounts involved in the controversy. He did not name the other banks but said these were big Philippine banks. 

He added that BPI is doing its own investigation about the accounts that may be involved in money laundering. 

"So far we have not gotten any information from the Australian authorities as to whom these accounts might be. Are there any patterns that we should be looking for? So we're doing our won investigations," Consing said. 

In November, Westpac was sued by Australian regulators over 23 million breaches of anti-money laundering laws, the country's biggest ever such scandal. 

Westpac accepted most of the regulator's assertions, which included the facilitation of payments to child exploiters. Its CEO and compliance head have quit, while the chairman brought forward his retirement to early 2020.

Westpac potentially faces a massive fine, as each transaction carries a maximum penalty of $14 million. In theory, that could add up to $330 trillion in fines. Westpac's executives may also be held personally liable.

- With a report from Reuters