BSP sets rules on anti-money laundering reports

For a more timely and accurate data, the Bangko Sentral ng Pilipinas (BSP) is proposing stricter rules on the electronic submission of its supervised financial institutions’ (BSFIs) risk reporting and notification of money laundering (ML), terrorist financing (TF) and proliferation financing (PF).

In a draft circular issued on Thursday, Jan. 5, BSP Governor Felipe M. Medalla said the guidelines of the Anti-Money Laundering/Countering the Terrorism and Proliferation Financing Reporting Package (ARP) will cover seven BSFIs required to submit to the BSP information on current ML/TF/PF risk as well as significant risk events arising from ML/TF/PF-related activities or transactions.

As part of its risk-based Anti-Money Laundering and Countering the Terrorism and Proliferation Financing (AML/CTPF) supervision, Medalla in the circular said the ARP will foster the periodic gathering of relevant and updated data and information related to the ML/TF/PF risks of both banks and non-banks.

The seven BSFIs required to submit ARP within the prescribed timeline are: banks and quasi banks including their subsidiaries and affiliates; stand-alone trust corporations; non-stock savings and loan associations; money service businesses (foreign exchange dealers, money changers, and remittance transfer companies); non-bank electronic money issuers; virtual asset service providers; and stand-alone credit card issuers.

Based on the proposed circular, the ARP reporting requirement will be submitted to the BSP within 30 banking days after the end of the reference year.

Meantime, for any ML/TF/PF risk event reports, BSFIs will have to notify the BSP within 24 hours from date of knowledge of any significant ML/TF/PF risk event. This covers reporting of ML/TF/PF-related incident “that may present material and adverse impact on the BSFI, the financial system’s posture or erode public confidence.”

The BSP said that an ML/TF/PF risk event is reportable it it will affect a significant number of customers or counterparties, with crossborder element, or those covered/may be covered in adverse media reports.

Medalla in the draft circular said all of these information and data such as identification and assessment of the BSFI’s current level and direction of risks relating to ML/TF/PF as well as the extent of their vulnerabilities to ML/TF/PF activities is “essential in the continuous assessment of ML/TF/PF risks in the financial system and the conduct of sectoral, national and/or institutional risk assessments.”

The global anti-money laundering watchdog, the Paris-based Financial Action Task Force (FATF), has taken note of the Philippines’ progress in adopting stronger measures against money laundering and terrorist financing, part of efforts to be delisted from the “grey list”. Being on the list means the Philippines is one of jurisdictions under closed monitoring by the FATF until these strategic flaws have been addressed.

To be taken out of the grey list, the country has committed to comply with 18 action plan items by this month. The last progress report was released last August 2022 which was based on the government’s February 1, 2022 reporting to FATF.

Progress reports are submitted to the FATF in three reporting cycles in a given year, or in January, May and September.

So far, the Philippines has resolved some of its AML/CFT problems and has made good progress in resolving technical compliance deficiencies.

The country’s financial intelligence unit, the Anti Money Laundering Council which is chaired by Medalla, said that as a grey-listed FATF, the Philippines “must improve its AML/CTF regime” and “removal from such list requires accomplishing the country’s action plan within the prescribed timeline.”

The Philippines was gray-listed on June 25, 2021. The last time the country was on the FATF watch list was in 2013.