Wednesday, January 04, 2006
Is the overseas remittance business being used to launder money?
I do not have the slightest idea, but the largely unregulated “padala” system is the perfect scheme for laundering illegal money, and this could all be done with the convenience of a telephone. A money launderer, for example, who wants to bring his money to Italy, can set up an office in Italy to receive remittances from Filipinos there. His Italian office will receive money from workers and then convey the message to the Manila office, which holds the hot cash. Then, the Manila office will deliver the amount equivalent to the one delivered to the Italian office to the family of the overseas worker for a fee. And presto! The money delivered in the Italian office is clean and ready to be deposited in a European bank. If the money launderer wants to spread his hot cash abroad, all he has to do is set up another office in another country, and he will have his hot money wherever he wants. Is this how easy it is? Unless the government regulates remittance companies, especially those operated outside the banking system, it’s as simple as calling on the phone.