BSP Seeks to Tighten Rules on Reporting ML/TF Threats

The Bangko Sentral ng Pilipinas (BSP) is seeking to tighten guidelines on reporting threats related to Money Laundering (ML), Terrorism  Financing (TF), and Proliferation Financing (PF) to manage risks in the financial sector.

The central bank’s suggested measures include establishing appropriate systems for spotting threats or primary sources of ML/TF/PF risks that might call for reporting to the BSP and senior management of BSFIs.

The proposed circular will be open for stakeholders’ comments until January 31.

“The sound management of ML/TF/PF risks is critical in ensuring the sustained resilience and integrity of the financial system in general as well as the safety and soundness of the BSFIs in particular,” the BSP said.

The central bank also stressed the importance of timely collecting and analysing pertinent data as part of a BSFI’s risk evaluation and management procedure.

Financial institutions are required to file an annual Anti-Money Laundering/Countering the Terrorism and Proliferation Financing Reporting Package (ARP) as well as a risk event report under the proposed regulations.

Financial institutions must submit an ARP to the relevant BSP department within 30 banking days after the end of the reference year.

Additionally, the central bank would deploy enforcement measures to enhance compliance with the reporting obligation. Penalties will apply to an ARP that is deemed “erroneous, delayed, and/or unsubmitted”.

“The initial submission of the Annual ARP with reference year 31 December 2022 shall be due on 30 June 2023. Subsequent submissions of the Annual ARP shall follow the prescribed timeline provided in this circular,” the BSP said.   

However, upon the proposed circular’s implementation, BSFIs would be required to file a Risk Event Report to the BSP within 24 hours of any ML/TF/PF-related occurrence. This will protect against any event that might have a detrimental effect on the BSFI as well as the financial industry.

“This shall enable the Bangko Sentral to have accurate and timely information on current ML/TF/PF risk and context information as well as significant risk events arising from ML/TF/PF-related activities and/or transactions as part of its risk-based anti-money laundering and countering the terrorism and proliferation financing supervision,” the BSP said. “Monetary and non-monetary sanctions, as provided under existing laws, Bangko Sentral rules and regulations, may likewise be imposed on the BSFI and/or its directors, officers and/or employees for violation of the reporting requirements.”

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