BSP Deputy Governor Nestor Espenilla Jr. issued Memorandum 2017-009 reminding all banks about their dealings with money service business (MSB) based on the Manual of Regulations for Banks and M-2016-004 issued in April last year.
MANILA, Philippines - The Bangko Sentral ng Pilipinas (BSP) has directed banks to put in place a system to detect unusual and suspicious accounts as part of the government’s efforts to combat money laundering and terrorist financing.
BSP Deputy Governor Nestor Espenilla Jr. issued Memorandum 2017-009 reminding all banks about their dealings with money service business (MSB) based on the Manual of Regulations for Banks and M-2016-004 issued in April last year.
Espenilla said banks should have a system that would enable them to understand the normal and reasonable account activity of customers and detect unusual or suspicious patterns of activity as part of ongoing monitoring of customers, accounts, and transactions.
“This includes, among others, the ability to identify customers or accounts which are being used to facilitate MSB activities and subject them to appropriate due diligence and monitoring procedures,” he said.
The BSP official stated in the memo that banks should only deal with registered foreign exchange dealers, money changers, as well as remittance and transfer companies.
“Banks are required, as part of customer identification process, to secure, among others, a copy of registration of foreign exchange dealers, money changers and remittance and transfer companies, or collectively known as MSBs, with the BSP,” Espenilla said.
He also reminded banks about the enhanced oversight framework for MSB that includes the revised rules for registration with the BSP.
“Banks may not deal with unregistered MSB,” Espenilla said.
As of June last year, there are more than 18,000 BSP-registered money service businesses comprising of 5,300 head offices and 12,700 branches. Of the total number about 6,700 are also BSP-authorized pawnshops.
The number of MSB in the Philippines is continuously growing and evolving to support the expanding needs of its customers. It now includes, among others, the electronic money business subsidiaries of telecommunication companies.
In January, the Monetary Board approved an updated comprehensive framework aimed at enhancing BSP oversight over the operations of MSB to promote more effective compliance with the Anti-Money Laundering Law.
Under the new rules, the BSP will regulate all remittance and transfer companies such as remittance agents, remittance platform providers, and e-money Issuers.
Money service businesses are required to register with the Anti-Money Laundering Council (AMLC) and submit activity level reports to the BSP.
The BSP also limited the ability of money service businesses to transact in cash wherein large value pay-outs of more than P500,000 or its foreign currency equivalent, in any single transaction with customers or counterparties, houldl only be made via check payment or direct credit to deposit accounts.
Also, foreign exchange dealers and money changers are only allowed to sell foreign currencies in the amount not exceeding $10,000 or its equivalent and not to exceed $50,000, or its equivalent per month per customer.
Source: http://www.philstar.com/business/2017/03/16/1681444/bsp-orders-banks-install-system-vs-suspicious-accts