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Banks told to consider NRA data in risk review


By Lee C. Chipongian

The Bangko Sentral ng Pilipinas (BSP) said all banks’ risk review process should include the National Risk Assessment (NRA) on money laundering and terrorist financing (ML/TF) for a comprehensive evaluation of financing risks.

Bangko Sentral ng Pilipinas (BSP) logo

BSP Deputy Governor Chuchi G. Fonacier, in a memo, issued a reminder to BSP supervised financial institutions to have NRA results as part of risk analysis, that banks “take into consideration the (NRA) results on ML/TF in the risk assessment process and in implementing risk-based measures to manage and mitigate identified risks.”

Banks are strictly required to identify, understand and assess their money laundering ML/TF risks “arising from customers, countries or geographic areas of operations, products, services, transactions or delivery channels and apply appropriate measures to manage and mitigate the ML/TF risks,” said Fonacier in BSP Memorandum M-2018-029, signed this week.

Since 2014, banks are required to submit data and information in aid of the government’s efforts to apportion resources to fight against ML/TF.

The BSP is part of the NRA Working Group through the Anti-Money Laundering Council (AMLC).
Fonacier said the NRA examines the overall exposure of the country to money laundering, and its related predicate offenses, terrorism and terrorist financing.

“lt is a comprehensive process of identifliing and analyzing the ML/TF risks within the realm of the supervised sectors, financial institutions, and covered persons and entities under the AMLA, as amended,” she explained in the memo.
The first NRA results covered the period 2011-2014 while the second report for the 2015-2016 was released in 2017.

The inter agency-NRA is one of the Financial Action Task Force (FATF) recommendations to enhance anti-money laundering enforcement.

The NRA identifies and evaluate the sources and methods of ML/TF, the weaknesses in the Anti-Money Laundering/Combating the Financing of Terrorism (AML/CFT) systems and other vulnerabilities that have an impact, either direct or indirect, on the country conducting the assessment.

The NRA has sub-working groups that take care of specific areas of ML/TF.

The BSP, after gathering data and information from its supervised financial institutions, submit these to the NRA Working Group under categories of threat assessment, national vulnerability, banking sector vulnerability, other financial institutions vulnerability and financial inclusion products risk assessment.

The Paris-based FATF’s primary role is to set global AML/CFT standards and ensure the effective implementation of these standards in all jurisdictions to reduce money laundering and financing of terrorism.


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