BSP reminds banks, non-banks, on strict due diligence

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MANILA – The Bangko Sentral ng Pilipinas (BSP) is reminding all its supervised financial institutions (BSFIs) to conduct stringent customer due diligence (CDD) on designated non-financial business and profession (DNFBP) customers such as lawyers and accountants in compliance with the anti-money laundering law.

In a memo (BSP Memorandum No. M-2023-019) issued on Tuesday, May 30, the BSP said under existing regulations and risk-based approach, where a covered person is unable to comply with the relevant CDD measures, a BSFI will “not open the account, commence business relations, or perform the transaction”.

Under such non-compliance, a BSFI will also “terminate the business relationship”.

“In both cases, (BSFIs will file) a suspicious transaction report (STR) in relation to the customer,” said the BSP. Failure to do so and other violations to BSP rules will trigger “appropriate enforcement actions under existing applicable laws and regulations.”

In the memo, it clarified that for DNFBP, CDD covers, among others: the identifying and verifying of the true identity of DNFBP customers and
beneficial owner or owners based on official documents or other reliable,
independent source documents, data or information; understanding and, as appropriate, obtaining information on the purpose and intended nature of the business relationship; and conducting ongoing due diligence on the business relationship and scrutiny of transactions undertaken throughout the course of the
relationship.

BSP Deputy Governor Chuchi G. Fonancier said previously that all BSFIs are expected to consider the money laundering, terrorist financing, and proliferation financing risks arising from the transactions of DNFBPs in their risk assessment.

According to the government’s Anti Money Laundering Council (AMLC), DNFBPs include the following: jewelry dealers; dealers in precious metals and precious stones whose business is trading in precious stones; company service
providers or CSPs; lawyers and accountants; and offshore gaming operators or OGOs and their service providers or SPs that are supervised, accredited or regulated by the Philippine Amusement and Gaming Corp. (PAGCOR) or Appropriate Government Agencies or AGAs.

“As disseminated under BSP Circular Letter No. CL-2019-043 dated 19 June 2019, pursuant to Chapter VI, Rule 18 of the 2018 Implementing Rules and Regulations of R.A. No. 9160 or the Anti-Money Laundering Act, as amended,
covered persons dealing with customers who are DNBFPs should require the presentation of the Provisional Certificate of Registration and/or the Certificate of Registration with the AMLC as part of the CDD,” said the BSP.

Based on a 2021 AMLC guidelines on DNFBPs, they are covered persons and are to be regulated for anti-money laundering or AML and counter-terrorism financing or CTF “proportionate to the nature, scale and complexity of the DNFBP’s operations in order to prevent criminals from exploiting them.”

The AMLC said DNFBPs must apply strict principles throughout their businesses such as: conforming with high ethical standards and observe good corporate governance to protect the integrity of DNFBPs; know sufficiently their customers and clients to prevent criminal elements and suspicious individuals or entities from transacting with, or establishing or maintaining relationship with the DNFBPs; and to adopt and effectively implement an appropriate AML/CTF risk management system that identifies, understand, assesses, monitors,and controls risks associated with money laundering and terrorist financing.

AMLC also instructed DNFBPs to “comply fully with existing laws and regulations aimed at combating money laundering and terrorist financing by making sure that their officers and employees are aware of their respective responsibilities and carry them out in accordance with a superior and principled culture of compliance.”

DNFBPs are also expected to cooperate fully with the AMLC for the effective implementation of the AMLA, RA No. 10168, otherwise known as the Terrorism Financing Prevention and Suppression Act of 2012 (TFPSA), their respective
implementing rules and regulations, and amendments, as well as directives and guidance from the AMLC and relevant government agencies.

Since 2011, the DNFBP sector has been tagged as having medium to high  money laundering and terrorism financing risks by the AMLC.

House committees to hold hearings during break

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Spread the loveMANILA – The House of Representatives has authorized for its committees to conduct hearings during the five-week congressional break, extending until late April.

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