RCBC: SWIFT messages from Bangladesh Bank 'vague,' 'not urgent'
MANILA, Philippines (UPDATED) – Of the hundreds of messages from the Society for Worldwide Interbank Financial Telecommunication (SWIFT) sent to Rizal Commercial Banking Corporation (RCBC) on February 9, the bank said it did not receive any high priority notes from Bangladesh Bank, asking to freeze transactions related to the $81-million bank heist.
"The requests from the Bank of Bangladesh were not priority. Some were even vague," Maria Celia Estavillo, RCBC head of legal and regulatory affairs, told the Senate blue ribbon committee on Tuesday, April 12. (READ: SWIFT system and the $81-M money laundering issue)
The RCBC official said the bank's Settlements Department received a total of 790 messages from SWIFT on February 9, of which 111 were from the Bangladesh Bank and were authenticated free format messages of "normal priority."
A SWIFT code on February 4 was sent to RCBC, ordering an inward remittance of $81 million to the Philippines from Bangladesh Bank.
On February 9, RCBC received a SWIFT code from Bangladesh Bank requesting for a refund or putting the funds on hold if they had been transferred or freeze them for proper investigation, after finding out that unknown hackers breached the computer systems of Bangladesh Bank.
"Since there were more than 700 messages and none of the messages from the Bangladesh Bank were of high priority, they were read in sequential order," Estavillo said during the hearing. (WATCH: LIVE: Senate hearing on $81-M Bangladesh bank heist, Day 5)
Expert: RCBC should have seen it
But for Senator Teofisto "TG" Guingona III, it is not every day that a private bank will receive a message from a foreign central bank.
"By just looking at the SWIFT code, you'll know it comes from a central bank. And it's not every day you'll get messages from them," Guingona told Estavillo.
The RCBC lawyer said that they did not know at first that it was from Bangladesh Bank.
Asked for validation, Nenita Cadapan, Bangko Sentral ng Pilipinas (BSP) SWIFT messaging officer-in-charge, told the Senate that a receiver of the SWIFT message would know which bank and from what locality it is from through a "bic code."
Cadapan said Bangladesh Bank cannot send a high-priority "MT 192" stop payment request to RCBC because "it is not its corresponding bank. They have no relations."
"The best option for Bangladesh Bank is to send free format messages, which is what it did," the BSP officer added. "But this doesn't mean messages from Bangladesh Bank are less persuasive. They [RCBC] should check it."
Per regulations, before any dollar remittance enters the Philippines, it has to pass through US correspondent banks. In this case, these are Wells Fargo Mellon Bank, Citibank, and Bank of New York.
From the 3 correspondent banks, the $81 million did not enter the RCBC Jupiter branch directly, but was first coursed through RCBC's Settlement Division, which is part of the head office.
"Our Settlement Division did not receive any high-priority stop payment requests from the corresponding banks also," Estavillo said.
Brussels-based SWIFT, a cooperative owned by some 3,000 global financial institutions, does not transfer funds, but sends payment instructions between institutions' accounts, using codes.
Also on Tuesday morning, Deguito appeared at the justice department for the first preliminary hearing of the case filed against her by the Anti-Money Laundering Council (AMLC) in March.
The dismissed RCBC branch manager, through her counsel Ferdinand Topacio, is asking for more time to answer the money laundering charges, saying the case is complicated.
"We will respond at the right time,” Topacio told reporters in a mix of English and Filipino.
The lawyer questioned why the Department of Justice was investigating only Deguito and not casino junket operators Kam Sin Wong (Kim Wong) and Weikang Xu, against whom AMLC has also filed charges.
The AMLC is questioning Deguito for approving the opening 4 accounts in May 2015 under allegedly fictitious names: Michael Francisco Cruz, Jessie Christopher Lagrosas, Alfred Santos Vergara, and Enrico Teodoro Vasquez.
The $81 million that hackers stole from the Bangladesh Bank account allegedly went to these accounts.
Assistant State Prosecutor Gilmarie Fe Pacamarra has set a May 3 deadline for Deguito to submit a counter-affidavit. – Rappler.com