Monetary Board approves amendments to AML rules for banks

The policy-setting Monetary Board has approved amendments to the Bangko Sentral ng Pilipinas's (BSP) Anti-Money Laundering-Combating the Financing of Terrorism (AML-CFT) regulations for supervised financial institutions.

"This is part of the BSP’s ongoing efforts to strengthen the financial system’s safeguards against money laundering and terrorist financing (TF) balanced against the objective of also promoting financial inclusion of the unbanked," the central bank said in a statement on Friday.

The amendments feature refinements customer due diligence, more pragmatic definition of “official document” and the use of other reliable, independent source documents, data or information for customer identification and verification. 

"The new rules likewise introduced the concept of a 'restricted account' to cater to targeted unbanked sector, wherein minimal customer information are required subject to certain conditions, such as constraints in terms of activity," the central bank noted.

"These will provide much greater flexibility in on-boarding unbanked customers, especially in rural areas where official IDs are not prevalent," it added.

With the advent of new technologies in the financial system, the new rules recognize and allow the use of information and communication technology in customer identification, subject to implementation of appropriate measures to manage attendant risks, the central bank said.

It said that primary considerations were taken in amending the rules, such as the latest revised Implementing Rules and Regulations of the Anti-Money Laundering Act, which took effect on January 7, 2017; lessons learned from recent money laundering/terrorist financing cases; and the latest Financial Action Task Force Recommendations and Guidance Papers, particularly on applying a risk-based approach to AML-CFT standards and striking balance between financial integrity and financial inclusion.

"The revised regulations emphasize the importance of a sound money laundering and terrorist financing risk assessment, the foundation of a proportionate, risk-based approach, to appropriately focus greater efforts and resources on areas posing higher risks, while reducing these for low-risk transactions," the BSP said.

Requirements for group-wide AML compliance function and monitoring systems are incorporated for a holistic management and prevention of money laundering and terrorist financing risks. — Ted Cordero/VDS, GMA News