Banks told to strictly perform customer due diligence

MANILA, Philippines — The Bangko Sentral ng Pilipinas (BSP) has reminded banks and financial institutions to strictly perform customer due diligence amid the rising incidents of fraud and scams.

BSP Assistant Governor Lyn Javier said BSP-supervised financial institutions (BSFIs) are expected to strictly perform customer due diligence on designated non-financial business and profession (DNFBP) customers.

Javier said Sections 921 and 921-Q of the Manual of Regulations for Banks (MORB) and Manual of Regulations for Non-Bank Financial Institutions (MORNBFI) calls for the strict performance of customer due diligence.

“All BSFIs are further reminded that violations of Sections 921 and 921-Q of the MORB and MORNBFI, respectively, shall be subject to appropriate enforcement actions under existing applicable laws and regulations,” Javier warned.

Under the process, banks and financial institutions are required to identify and verify the true identity of DNFBP customers and beneficial owner/s based on official documents or other reliable, independent source documents, data or information.

BSP Circular Letter CL-2019-043 in June 2019 pursuant to implementing rules and regulations of Republic Act 9160 or the Anti-Money Laundering Act, as amended, stated that covered persons dealing with customers who are DNBFPs, including jewelry dealers, dealers in precious metals, and dealers in precious stones, company service providers, lawyers and accountants and real estate developers and brokers should require the presentation of the provisional certificate of registration   or the certificate of registration with the Anti Money Laundering Council (AMLC) as part of the customer due diligence.

Under existing regulations, she pointed out that a covered person who is unable to comply with the relevant customer due diligence measures, considering risk-based approach should not open the account, commence business relations, or perform the transaction.

Likewise, the business relationship should be terminated but should consider filing a suspicious transaction report in relation to the customer.

Paris-based Financial Action Task Force (FATF) re-included the Philippines in the gray list in June 2021 for failing to address the remaining deficiencies in its regime to counter money laundering as well as terrorist and proliferation financing.