Wirecard: Philippines’ Anti-Money Laundering Chief Explains the Investigation

Euromoney, July 9 2020

Attorney Mel Georgie Racela runs the Anti-Money Laundering Council Secretariat in the Philippines, one of two agencies tasked with getting to the bottom with the country’s involvement in the Wirecard scandal.

Can you bring me up to date with what you’ve established so far about how the Wirecard situation links to the Philippines?

First, the statement from the governor [Bangko Sentral ng Pilipinas governor Benjamin Diokno, also the AMLC chairman] that none of the missing $2.1 billion ever entered the Philippine financial system, this statement holds true until now. The two banks mentioned in newspaper reports [BDO Unibank and Bank of the Philippine Islands] have both denied having relationships with Wirecard; they stated that they have informed Wirecard’s external auditor, Ernst & Young, that the documents attesting to the presence of the supposed funds are spurious; and lastly they declared that they have dismissed the junior officers involved in the issuance of these spurious documents.

Coming from Wirecard itself, it admitted that the missing $2.1 billion may not have existed at all.

So based on all those established facts, it appears from the initial elaborate case of searching for the very huge amount of money, it came down to a case involving rogue bank employees engaging in criminal activity in exchange for financial gain. Nevertheless, the AMLC is still prepared to take action and give assistance to any law enforcement agency, both domestic and foreign, and the AMLC will not hesitate to prosecute those involved to the fullest extent of the law.

So, it’s become a smaller challenge for you if that money never existed: a case of junior employees engaging in fraudulent conduct rather than the Philippines being involved in a multi-billion dollar scandal. But is it concerning that junior members of bank staff can succeed for as long as they appear to have done with fraudulent documents? The banks themselves must have questions to answer.

Yes. We have reminded the banks to be strict on knowing their employees. That’s part of our anti-money laundering regulations: for them to strictly enforce their know-your-employee processes. And of course there are lapses in internal control.

Is the investigation of bank behaviour under the AMLC or the National Bureau of Investigation?

For money laundering and financial investigation, that will be the AMLC. For other criminal offences, that will be the National Bureau of Investigation.

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