When the Senate Blue Ribbon Committee launched the investigation on the Bangladesh bank heist that had hackers laughing all the way to Philippine casinos with $81 million, Senator Sergio “Serge” Osmeña issued a warning that the Philippine government will be blacklisted by the Financial Action Task Force on Money
Laundering unless the country succeeds in helping Bangladesh recover the loot from hackers in conspiracy with a criminal syndicate.
The FATF was established by the G-7 summit in Paris in 1989 in response to mounting concerns over money laundering. Members include 29 countries and jurisdictions including the major financial center-countries of Europe, North and South America, Asia as well as the European Commission and the Gulf Cooperation Council.
The organization was tasked to develop a coordinated international response to the criminal activity which nets between US $800 billion and $2 trillion a year, according to latest reports from the United Nations Office on Drugs and Crime.
In 2000, the Philippines was blacklisted by FATF along with 14 other countries regarded by the global anti-money laundering watchdog as uncooperative in the fight against the transnational crime. Of course, the FATF was being euphemistic when it called those in the blacklist as uncooperative when it actually meant the high-risk countries were playing footsies with criminals.
The Philippines placed number 12 in the FATF hall of shame that had Bahamas in number one position and Saint Vincent and the Grenadines at the bottom. I wonder how many of these 15 countries laundered the plundered wealth of the former dictator Ferdinand Marcos, estimated at between $5 to $10 billion.
It may also be recalled that in 2000, the Philippines was rocked by a political tsunami brought about by the impeachment trial of then President Joseph “Erap” Estrada over charges that he accepted jueteng money from gambling lords.
The impeachment led to the discovery and exposition of the so-called Velarde account in Equitable PCI Bank. Bank executive Clarissa Ocampo told a riveting story that the Jose Velarde account had accumulated deposits of more than P1 billion. When she was called to have P500 million taken from the savings account and have it transferred to a trust fund/investment account, Jose Velarde signed the documents in the office of the president in Malacanang.
It was a rough time for Equitable PCI Bank whose owner and chairman of the board, George L. Go, was forced to resign. In 2007, the bank merged with the Henry Sy-owned BDO, currently the largest bank in the Philippines.
The sanctions imposed by the FATF on top of the notoriety that the Philippines gained for its indifference to money laundering eventually pressured Congress to craft and pass RA 9160 otherwise known as the Anti Money Laundering Act of 2001.
The measure was signed into a full and complete law in September 2001 and was later amended in 2013 in an effort to expand AMLA’s coverage to include casinos.
The trend in western countries that host a number of casinos show that these gambling resorts are a huge laundromat for dirty money.
But Congress was up against a powerful lobby allegedly represented by gambling titans of US, Australia, Hong Kong and Malaysia such that the most important amendment to the AMLA failed to pass.
Come to think of it, the very reason why these gambling moguls plunked $20 billion in Manila’s Entertainment City run by Pagcor is precisely the fact that casinos are not covered by AMLA.
As to Sen. Osmeña’s misgivings about OFWs getting the dire consequences of the Bangladesh bank heist, I would like to inform the good senator that this is already happening.
My niece who is based in Tamworth, New South Wales told me on social media that a remittance for her family in Bohol was put on hold until the Australia-based remittance firm submits official documentation, i.e., info who owns the remittance agency and who sits in the board of directors. The Filipino-owned company operates a number of shops and offers money remittance services in NSW, Australia .
I’m not sure if this restriction is limited only to PH remittances from down under, but I guess Australia’s financial system is looking at the PH episode as basis for a more stringent policy which simply means that Australia could impose the same controls on remittance outflows to other countries to be sure that their financial system is not infected by underworld money.
Another scenario is that other nationals will hate us for this restriction which they have nothing to do with.
It could well be a clue that the PH would be back in the FATF blacklist sooner than expected and all because Congress ignored the red flag raised by the Anti-Money
Laundering Council in 2013 — that gambling casinos are giving incentives to money launderers.
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