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BSP strengthens AML rules anew

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By Lee C. Chipongian

 

To enhance safeguards already in place to combat money laundering in the country, the Bangko Sentral ng Pilipinas (BSP) has approved additional amendments to its anti-money laundering (AML) rules this week.

“The revised regulations emphasize the importance of a sound ML/TF (money laundering/terrorist financing) risk assessment, the foundation of a proportionate, risk-based approach, to appropriately focus greater efforts and resources on areas posing higher risks, while reducing these for low-risk transactions,” BSP said in statement Friday. It said the requirements for group-wide AML compliance function and monitoring systems are now “holistic” in management and prevention of ML/TF risks.

Specifically, the BSP refined rules on customer due diligence and will adopt a “more pragmatic definition of official document” and other independent source documents, data or information for customer identification and verification.

The amended rules will also implement what it called a “restricted account” for the “targeted unbanked sector, wherein minimal customer information are required subject to certain conditions, such as constraints in terms of activity.”  This addition should allow for more flexibility in “on-boarding” unbanked customers, especially in rural areas where official IDs are not prevalent, said the BSP.

“With the advent of new technologies in the financial system, the new rules recognize and allow the use of information and communication technology in the conduct of customer identification subject to implementation of appropriate measures to manage attendant risks,” explained the BSP.

It added that to have more impact, it is also introducing the “escalation of supervisory enforcement action” in cases of heightened AML/CFT supervisory concerns as reflected in the overall AML risk rating of the covered person.

“To facilitate transition, covered persons are allowed six months from effectivity of the revised regulations to update their AML/CFT policies,” said the BSP.

The central bank has been instituting stringent changes in its AML rules in the wake of last year’s $81-million Bangladesh Bank stolen and laundered money that involved a local bank.

In the Philippines, any bank transactions in excess of P500,000 is automatically reported to the AML Council based on the provisions of AMLA. This is the “covered transaction.” A suspicious transaction is, regardless of amount, a transaction where there is no underlying legal or trade obligation, purpose or economic justification.

The AMLC, as the Philippines’ financial intelligence unit, in 2015 received over 36 million covered transaction reports and 146,308 suspicious transaction reports. They have filed 365 cases last year of which 115 are pending. The total amount of frozen/forfeited amount initiated by AMLC in 2015 totaled P4.828 billion.

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