The House Quad Comm hearings unwittingly led to a series of revelations that swept the nation. However, a revelation about banking practices could jeopardize the country’s efforts to leave the anti-money laundering gray list, potentially leading to a blacklist.

The Philippines is currently listed on the so-called financial gray list, along with 20 others that include Namibia, Mozambique, South Africa, Sudan, Syria and Yemen. Graylisting means remittances from OFWs are subject to strict conditions that lead to undue delays.

In several Quad Comm hearings, there were revelations when banks violated Anti-Money Laundering Council regulations, such as deposits in the billions that were apparently not reported to the AMLC. This fact was revealed by Congressman Bishop Benny Abante during the Monday Circle forum at the Westin Hotel, where he cited the possibility of bank presidents being invited as resource persons.

Rep. Abante said the Quad Comm identified several large deposits where AMLC received no notification, much to the lawmakers’ chagrin. In fact, there was even one notable instance where lawmakers found out where the funds were withdrawn immediately after the huge deposits were revealed during the hearings.

He said P8 billion from a bank deposit was withdrawn the next day, leaving the Anti-Money Laundering Board baffled. And to think there were 18 action points that the country needs to address to get out of the financial gray list.

With all the Quad Comm revelations, especially regarding banks that broke the AMLC’s anti-money laundering rules, the Financial Action Task Force, the global organization that oversees anti-money laundering activities in countries’ banks, could even put the Philippines. on its financial blacklist.

This could be why the Bankers Association of the Philippines (BAP), the banks’ umbrella organization, is being asked to use moral suasion so that Quad Comm does not follow through on its intention to get to the bottom of the missing deposits.

We understand that three big banks are in the crosshairs of the Quad Comm for allowing huge deposits that were not flagged and reported to the AMLC. Such violations, when investigated and proven true by the Bangko Sentral ng Pilipinas, will mean stiff monetary fines as they endanger the safety and stability of the banking system.

Since 2021, the country has been included in the financial gray list, which leads to an undue burden on customers. The FATF has listed 18 action plans and it would appear that in terms of addressing concerns about anti-money laundering activities, the Philippines has hit rock bottom with the disclosures of POGO activities.

According to the Abante representative, Quad Comm discovered the extent to which banks circumvented standard banking procedures. This negligence includes inadequate enforcement of KYC (know your customer) regulations, allowing banks to process millions in deposits despite suspicions about the questionable source of these funds.

Under anti-money laundering rules, banks are required to check whether deposits, particularly billions, should come from commercial operations or legitimate businesses. According to AMLC rules, banks are not allowed to accept deposits of “dirty” money, such as that from drugs or other illegitimate sources.

Quad Comm is in a quandary with the results of its investigation revealing the banks’ failure to fully verify the veracity of the deposits they were receiving. Speculation is rife as to whether or not the Quad Comm will pursue further investigation into the banks’ role in accepting large deposits.

Meanwhile, as speculation mounts on the BAP’s move on the matter, there is a big problem facing the Philippines ahead, the possibility of it being blacklisted with Iran, Myanmar and North Korea, which will affect the financial transactions of the country. on a global scale.

According to the FATF, “failure to address the remaining elements of the action plan would have exposed the Philippines to the risk of being blacklisted. FATF member countries impose additional restrictions and checks and possibly deny financial transactions with blacklisted countries. This results in failed transactions, delays and costs that can be passed on to consumers.”