BSP tells banks to closely monitor cross-border fund transfers

MANILA, Philippines - The Bangko Sentral ng Pilipinas mandated banks yesterday to implement additional measures regarding fund transfers to better guard against them being involved in unlawful activities.

This is in compliance with the existing Manual of Regulations for Banks, which require financial institutions to have policies and procedures in place to prevent themselves from being used in the transfer of funds used in criminal acts, the central bank said.

“Covered institutions are reminded to observe relevant prudential safeguards in processing fund or wire transfer transactions, especially cross border transfers, to ensure that they will not be transmitting proceeds of unlawful or unauthorized activities,” the BSP said.

Banks should have a system that analyzes account activities and detects unusual patters as part of monitoring transactions, the central bank explained.

“Thus, a risk and materiality based on-going monitoring of customer’s accounts and transactions should be part of a covered institution’s customer due diligence,” the BSP said.

The BSP also reminded banks that they should not accept instructions to pay-out fund transfers to non-customers unless it has already reviewed the identity of said beneficiary.

With regard to cross-border transfers, the central bank stressed banks should have an enhanced due diligence survey when dealing with high-risk customers.

If the information on these high-risk customers and their beneficiaries cannot be obtained or verified, the BSP said the bank should refuse the transfer of funds.

At the same time, the central bank reminded banks they should report suspicious transactions to the Anti-Money Laundering Council when necessary.