Monitor clients’ gambling exposure, banks told

MANILA, Philippines - The Bangko Sentral ng Pilipinas (BSP) has ordered banks to closely monitor the exposure of customers engaged in gambling or online gaming businesses as part of the heightened campaign against money laundering and terrorist financing.

BSP Deputy Governor Chuchi Fonacier said banks should set the risk appetite for the risk exposure, conduct customer due diligence and risk assessment as well as perform continuing account and transaction monitoring.

“In view of the increasing exposures to customers engaged in gambling and/or online gaming business, banks are reminded to ensure the soundness of their risk management policies and practices to manage risk exposures arising from the transactions of these customers,” Fonacier stated in a memorandum.

Under Memorandum M-2018-001, Fonacier said there should be an adequate reporting mechanism to regularly apprise the board of directors of banks of the relevant risk exposures to enable them to make informed decisions and issue appropriate directives.

On customer due diligence, Fonacier said banks should conduct the appropriate due diligence necessary to the relationship to ensure that they will not be used as channel for money laundering or terrorist financing activities.

“This includes developing an adequate understanding of the business model and operations of the customer engaged directly or indirectly in gambling and/or online gaming business to identify unusual or possibly suspicious activities,” she said.

According to Fonacier, banks should only deal with gambling and online gaming businesses that are authorized or licensed by or registered with the appropriate government agency and should be able to identify and verify the identity of the customers including their beneficiaI owners.

Fonacier explained banks should consider relevant factors such as business operations, types of customers, product or service availed of, distribution channel, jurisdictions they are exposed to and expected account activity as part of the customer risk assessment.

Furthermore, the BSP official said banks should implement a robust system or process to identify unusual movements of funds or transactions of customers that warrant further investigation to determine if filing of suspicious transaction report is warranted.

“This includes proactive monitoring of the customers’ transactions based on appropriate parameters or alerts scenarios that capture their financial profile and behavioral account activities,” she said.

President Duterte signed Republic Act 10927 amending RA 9160 or the Anti-Money Laundering Act of 2001 designating casinos as covered persons under the purview of the Anti-Money Laundering Council (AMLC) last July 14.