AMLC wants more reports on low-risk transactions

MANILA, Philippines — Money service businesses or MSB are now required to report various no/low-risk transactions as part of the government’s heightened campaign against money launderers, according to the Anti-Money Laundering Council (AMLC).

Mel Georgie Racela, executive director of the AMLC Secretariat, issued AMLC Regulatory Issuance 3 amending the AMLC Registration and Reporting Guidelines (ARRG) through the inclusion of no/low-risk transactions for money service businesses.

These transactions include pre-fund deposit and replenishment to process remittance transactions; payment of commission, charges or other operating income expenses for services rendered; payment of corporate income tax, value added tax and percentage tax by money service businesses, as well as foreign exchange transactions between a parent, its subsidiaries and affiliates, however limited to subsidiaries and affiliates which are also covered persons.

Likewise, no/low-risk transactions that shall be deferred for reporting  include internal operating and capital expenses such as lease agreement and rental payments, office repairs and maintenance expenses, as well as purchase of furniture, fixtures and equipment.

Others transactions deferred for reporting include money service businesses using its remittance services to credit employees’ salaries and to fund its employees travel allowances, as well as employees using the services to liquidate expenses such as excess funds from previous cash advance.

Bangko Sentral ng Pilipinas (BSP) Governor and AMLC chairman Benjamin Diokno earlier directed banks and other covered institutions to stay alert due to reports of money laundering activities  amid the coronavirus pandemic.

“Criminals and money launderers never sleep. They are unfazed by the virus,” Diokno said recently.

Diokno said the central bank continued to be pro-active, alert, and determined to closely monitor financial crimes and money laundering activities.

“I assure you that we will continue to work for an internationally compliant and effective anti-money laundering regime, which will provide the Filipino people with a sound, dynamic, and strong financial system in an environment that is conducive to the promotion of social justice, political stability, and sustainable economic growth,” Diokno said.

Last April 29, the regulator issued Memorandum 2020-036 directing all banks to pay close attention to new forms of money laundering and terrorism financing risks.

Aside from phishing or spear phishing campaigns and other cases of fraudulent activities,  Diokno said BSP-supervised financial institutions have been warned to be on the lookout for  illegal schemes that exploit the changes in work arrangements, lifestyles or behavior of the public due to COVID-19.

“While the global economic activities have slowed down sharply during the current pandemic, money laundering activities are continuously being reported, which give us reason to believe that opportunistic threats abound,” Diokno said.

The Philippines is in danger of being included in the gray list and face sanctions from Paris-based global watchdog Financial Action Task Force (FATF) after it was placed under a 12-month observation period by the Asia Pacific Group on Money Laundering (APG).

The country was blacklisted by the FATF in 2000 for failing to address “dirty” money issues paving the way for the enactment of AMLA in 2001. The country was subsequently removed from the blacklist in February 2005.

It narrowly avoided being placed on the blacklist in 2012 as  the country criminalized terrorist financing and pursued quicker freezing of suspect accounts.