Banks Ordered by BSP to Enhance the Filing of Suspicious Reports

MANILA, Philippines – In an attempt to ramp up its fight against financial crimes, the Bangko Sentral ng Pilipinas (BSP) has ordered banks and other financial institutions to enhance the filing of Suspicious Transaction Reports (STRs) with the Anti-Money Laundering Council (AMLC). 

BSP, which is the central bank of the Philippines, was pushed to make this move following the results of the 2021 STR Quality Review by the AMLC. The Deputy Governor of BSP, Chuchi Fonacier, stated that BSP-supervised financial institutions (BSFIs) have been continuously misreporting fraud schemes and activities. She stated: 

“In view of the foregoing, BSFIs are reminded to further enhance their suspicious transaction reporting process and ensure proper filing of STRs using the appropriate suspicious indicator or predicate crimes,” 

According to the findings of the 2021 STR Quality Review, the AMLC revealed several institutions were still misreporting fraudulent transactions and cases under PC16 – Fraud and Illegal Exaction and Transactions, as well as PC18 – Forgeries and Counterfeiting. Instead, they must be reported under PC9 – Swindling and PC33 – Fraudulent Practices and other Violations Under the Securities Regulations Code of 2000. 

Adding to this, Financier also stated that the Quality Review identified major gaps in the reporting activities by banks, along with the challenges posed by covered persons. Numerous institutions were also found to be misusing the Suspicious Indicator (SI) 6. 

SI6 has been instructed to be used for reporting, only in the event that none of the listed predicate crimes or suspicious indicators are applicable. However, firms were found to be overusing S16 for the random sampling of STRs. This step goes against the AMLC Registration and Reporting Guidelines (ARRG), as stated by Foncier, and downplays the prioritization and importance of the STRs. 

Provided that filing a suspicious transactions report is crucial for the prevention of potential criminal activities, such as money laundering and financing of terrorism, companies have been ordered to comply with the BSP’s strict advice. The BSP’s guidance extends to all financial institutions that aim to minimize the threat of fraud and lower losses due to non-compliant activities. 

Suggested Read: A Comprehensive Guide to AML Compliance [2020]