BSP moves to boost drive vs dirty money

MANILA, Philippines - The Bangko Sentral ng Pilipinas (BSP) is set to issue a series of circulars to strengthen the country’s anti-money laundering law.

BSP Deputy Governor Nestor Espenilla Jr. said the regulator would issue several circulars as part of the updated rules on the Anti-Money Laundering Act (AMLA).

“You may be aware that the implementing rules and regulations of the anti-money laundering law were also amended late last year. So this one aligns to that,” he said.

Espenilla explained the circulars would incorporate the recommendations of the Paris-based Financial Action Task Force (FATF) allowing online know-your-customer (KYC) procedures.

“It would allow flexibility on the online KYC which is actually going to be a major factor that can facilitate the onboarding of new customers, especially unbanked customers in remote areas,” he said.

According to Espenilla, banks and financial institutions would have to establish a transparent and trusted online KYC procedures.

“So there’s also the concept of account openings. We have a reduced KYC, but it will have more limited functionality.  Also again in the spirit of allowing more people to open accounts much easier,” he said.

Espenilla said the new process would allow individuals to undertake online KYC procedures through Skype.

In the absence of valid government issued IDs, he said individuals could present electonic images, certificates issued by the barangay, among others.

The KYC rule requires banks and financial institutions to establish the full identity of individuals looking to transact with a financial firm, which is usually done by requiring identification cards from a client.

The Philippines has escaped a possible blacklisting by the global body on anti-money laundering and terrorist financing despite getting embroiled in a $81-million cyber heist exactly a year ago.

Since the Philippines was just evaluated over three years ago, there is no clear schedule yet on the next assessment by FATF.

The Philippines was included in the “dark gray list” or jurisdictions not making sufficient progress by the FATF in October 2010 after it failed to address the remaining deficiencies in implementing its action plan.

It was upgraded to “gray list” in June 2012 due to the initiatives of the government to enhance its transparency and accountability mechanisms in financial transactions.

In June 2013, the Philippines was eventually removed from the list of jurisdictions subject to the FATF’s ongoing global AML/CFT compliance process.

The country has since avoided getting blacklisted by FATF after it passed Republic Act 10167 and 10168 which criminalized terrorist financing and added predicate crimes to the AMLA.

However, RA 10168 left out casinos as among the entities required to report to AMLC.

The BSP has been pushing to amend the Anti-Money Laundering Act (AMLA) to include casinos; money services business or money transfer companies; dealers of precious stones, jewels and metals; dealers of high-value items or goods; and real estate developers, brokers and sales agents in the list of monitored institutions.