AYALA-LED Bank of the Philippine Islands (BPI) has suspended its ties “immediately” with LitePay, the remittance platform of Australian bank Westpac involved in a massive money laundering scandal.
In a statement, BPI said “the alleged failures of Westpac’s LitePay facility are a very serious concern to us.”
BPI is the remittance partner of Westpac, one of the biggest banks in Australia, but the former suspended its use of latter’s LitePay on Nov. 24, 2019 after learning about the Australian authorities’ investigations against the bank.
“We have always worked closely with the regulators and authorities to ensure continued compliance with both domestic and global money laundering laws and regulations,” it said.
BPI is among the 10 banks reviewed by the Bangko Sentral ng Pilipinas (BSP) in connection with the scandal.
The BSP on Thursday, Dec. 19, 2019, said it has received an initial report from one of its supervised banks.
“The BSP is closely coordinating with the Anti-Money Laundering Council Secretariat and other identified institutions to gather additional information and verify details of the transactions,” the central bank said in a statement.
“The duration of the onsite review, which will be a focused look on the remittance transactions and processes, will depend on the extent of information that we will be able to gather,” the BSP said.
According to a report, Westpac allegedly failed to report more than 19.5 million fund transfer instructions in and out of Australia to the Philippines and other parts of Southeast Asia.
The transactions in question supposedly involved money for child exploitation.
Australian regulator Austrac has accused Westpac of breaking the law over 23 million times, as the supposed frequent and low-value payments sent via LitePay trace back to “at least 2013.”
Westpac tied up with BPI in 2016 to offer the LitePay service to local depositors, targeting overseas Filipinos looking to send money to their families back home faster.
“Westpac’s clients used this platform to send remittances to the Philippines for BPI to fulfill, whether for credit to the accounts of BPI clients or for those of other Philippine banks,” BPI said.
“At the time of initiation of the partnership, Westpac made representations and warranties that they are in compliance with all applicable regulations,” the lender further said.
BPI also noted that from July 2016 to October 2019, a total of only 61,687 transactions were coursed through BPI and credited to various recipient banks in the Philippines.
Of this number, 34 percent was credited to BPI accounts, the second largest in terms of transaction count. Of the 23 million Westpac transactions cited by Austrac, only 0.27 percent was coursed through BPI.