Bangko Sentral pushes AMLA overhaul

MANILA, Philippines - The Bangko Sentral ng Pilipinas (BSP) is pursuing major reforms, including a major overhaul of the anti-money laundering law, to rid the country of its tag as a major dirty money site.

BSP Deputy Governor Nestor Espenilla Jr. said yesterday the central bank has issued several regulations to promote a more effective compliance with the Anti-Money Laundering Act (AMLA).

The BSP has approved an updated comprehensive framework aimed at enhancing BSP oversight over the operations of money service businesses (MSBs) such as remittance and transfer companies (RTCs), money changers or foreign exchange dealers.

Under the new rules issued in January, the BSP regulates all RTCs like remittance agents, remittance platform providers and e-money issuers.

RTCs and other MSBs are now required to notify the BSP in cases of commencement of operations, new accreditation of remittance sub-agents (RSAs), change of tie-up partner/s, transfer of location, and closure of business.

New rules also require MSBs to register with the Anti-Money Laundering Council Secretariat for purposes of covered and suspicious transactions reporting.

As of June, there are over 18,000 BSP-registered MSBs (5,300 head offices and 12,700 branches), 6,700 of which are also BSP-authorized pawnshops.

The BSP has also approved the regulatory framework for virtual currency exchanges and similar entities operating in the country to provide an environment that encourages financial innovation while at the same time ensuring the Philippines is not used for money laundering or terrorist financing activities.

BSP Governor Amando Tetangco Jr., who is set to step down on July 2, has been pushing the proposed changes in the BSP charter, the AMLA and the bank secrecy law to further strengthen the enforcement powers of the central bank.

Tetangco earlier told the Senate committee on banks, financial institutions and currencies, the proposed changes would give authorities a better chance of detecting money laundering activities.

About $81 million worth of funds stolen from the account of the Bangladesh Bank at the Federal Reserve Bank of New York by hackers in February last year entered the Philippines via Rizal Commercial Banking Corp. (RCBC) through fictitious accounts.

The scandal resulted in the resignations of Lorenzo Tan as RCBC president and CEO and Raul Tan as treasurer. The bank also dismissed Jupiter, Makati branch manager Maia Santos-Deguito and customer relations manager Angela Torres for allegedly facilitating the entry of the stolen funds.

 The BSP’s Monetary Board slapped a record P1-billion fine against RCBC on Aug. 5 for non-compliance with banking laws and regulations in connection with the money laundering scandal.

The AMLC also filed several cases before the Department of Justice against individuals involved in the cyber heist.

The BSP is pushing for the Secrecy of Bank Deposits Law to further strengthen its enforcement powers.

Malacañang recently appointed CPA-lawyer Mel Georgie Racela as officer-in-charge of AMLC replacing former executive director Julia Bacay-Abad who resigned on Jan. 31.

The US State Department has included the Philippines in the list of countries considered as a ‘major’ site for money laundering in 2016.