OUTGOING Bankers Association of the Philippines president Lorenzo Tan proposed to the incoming board of the group the creation of a committee that will look into counter-terrorist financing and money laundering activities in the country.
Lorenzo, president and chief executive of Rizal Commercial Banking Corp., said in a statement Tuesday said the industry must face up to the challenge of these activities, which introduced systemic and institutional risk.
“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,” Tan said.
“This is unprecedented and has dire consequences on how we conduct business in our 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,” Tan said.
Tan, who was implicated in the bank’s alleged involvement in an $81-million money laundering activity, said the committee should look into all means possible to help strictly implement relevant laws and regulations, including close coordination with the Anti-Money Laundering Council.
He said the committee should also identify loopholes in existing laws and regulations and lobby hard with legislators, regulators and banks’ governance boards for the needed amendments.
He proposed a comprehensive strategy to prevent similar incidents from recurring, in close coordination with the Bangko Sentral ng Pilipinas, the Anti-money Laundering Council, Congress, law enforcement agencies and all financial institutions.
He said the industrymust have the singlemindedness for the consistent implementation of policies across all banks and financial institutions.
Tan said all banks must participate and contribute their expertise after the issue highlighted the sector’s vulnerability and exposed the banks’ directors, officers, and employees to compliance, operational and reputational risks.
“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 bank board of directors,” Tan said.
Tan was twice re-elected as BAP president. He will be succeeded by his older brother, BDO Unibank Inc. president and chief executive Nestor Tan.