Banks told to deal only with registered forex, money changers

MANILA, Philippines — The Bangko Sentral ng Pilipinas (BSP) reminded banks and financial institutions to only deal with registered foreign exchange dealers, money changers as well as remittance and transfer companies as the country continues to step up its anti-money laundering efforts.

BSP Deputy Governor Chuchi Fonacier said BSP-supervised financial institutions (BSFIs) should only deal with forex dealers that are registered with the regulator and the Anti-Money Laundering Council (AMLC).

“BSFls are reminded to ensure the soundness and adequacy of their risk management policies and practices in dealing with forex dealers, money changers and remittance and transfer companies,” she said.

She said banks should conduct risk assessment to identify, understand and assess money laundering/terrorism financing risks arising from these entities and and apply appropriate standard of customer due diligence.

“The risk assessment should consider relevant factors, such as business operations, anti-money laundering/combating the financing of terrorism processes or controls, types of customers, product/service availed, distribution channel, jurisdictions they are exposed to, expected account activity and results of the national or sectoral risk assessment,” she said.

Fonacier said financial institutions should also perform appropriate due diligence when dealing with forex dealers, money changers as well as remittance and transfer companies, either as remittance partners or tie ups or accounts being used to facilitate remittance/money changing business, to effectively manage and mitigate risks.

She said enhanced due diligence procedure should be performed for forex dealers, money changers as well as remittance and transfer companies that are classified as high risk.

 The procedures include the review of the anti-money laundering and fighting the financing of terrorism adopted by these entities as well as securing senior management approval for establishing business relationship.

“Inability to comply with relevant customer due diligence measures is a ground for refusing to open the account, commence business relation or perform the transaction and/or terminating the business relationship. This is without prejudice to the filing of a suspicious transaction report,” she said.