Banks told: Observe risk management practices
Credit to Author: Mayvelin U. Caraballo, TMT| Date: Tue, 24 Dec 2019 16:13:57 +0000
THE Bangko Sentral ng Pilipinas (BSP) has reminded banks to ensure the soundness and adequacy of their risk management policies and practices in dealing with foreign exchange dealers (FXDs)/money changers (MCs) and remittance and transfer companies (RTCs).
In a memorandum dated December 12, Bangko Sentral Deputy Governor Chuchi Fonacier said BSP-supervised financial institutions (BSFIs) should only deal with FXDs/MCs and RTCs registered with the central bank and the Anti-Money Laundering Council (AMLC).
“BSFIs shall require submission of proof of registration with the BSP and the AMLC and/or independently validate in the list of registered BSFIs and covered persons in the BSP and AMLC websites, respectively,” she added.
BSFIs shall also require submission of the remittance sub-agents’ (RSA) proof of accreditation by the RTC containing the RSA Code assigned by the central bank.
Fonacier also said that throughout the business relationship with FXDs/MCs and RTCs, a BSFI shall conduct risk assessments to identify, understand and evaluate money laundering/terrorism financing risks arising from these entities and apply appropriate standard of customer due diligence.
“The risk assessment should consider relevant factors, such as business operations, anti-money laundering/combating the financing of terrorism processes or controls, types of customers, product/service availed, distribution channel, jurisdictions they are exposed to, expected account activity and results of the national/sectoral risk assessment,” she added.
BSFIs shall also perform appropriate due diligence when dealing with FXDs/MCs and RTCs, either as remittance partners or tie-ups or accounts being used to facilitate remittance/money changing business to effectively manage and mitigate risks.
They shall also perform enhanced due diligence procedures on FXDs/MCS or RTCs found to be or classified as high risk.
“Inability to comply with relevant customer due diligence measures is a ground for refusing to open the account, commence business relation or perform the transaction and/or terminating the business relationship….” Fonacier warned.