THE BANGKO SENTRAL of the Philippines (BSP) reminded banks to implement targeted fifinancial sanctions (TFS) such as the freezing of assets to combat Ifnancing of terrorism and proliferation of weapons of mass destruction.
BSP Deputy Governor Chuchi G. Fonacier through Memorandum No. M-2022-007 instructed its supervised financial institutions to implement policies related to TFS that are “consistent and commensurate with their risk profile.” “.
The memorandum was released as the country aims to report to the Financial Action Task Force in May that it has beefed up the TFS for terrorist financing and proliferation financing following its gray listing in June 2021.
TFS are measures such as freezing assets and limiting the availability of funds that will benefitIft designated persons or entities, who may in turn be used for terrorism Iffinancing, the proliferation of weapons of mass destruction and the proliferation Ifnancing.
The BSP said banks should conduct an assessment, regular audit or review of screening systems to ensure that their systems and processes on TFS are operating as intended.
“The methodology must be adapted according to the risk and the context of the supervised BSP Iffinancial institutions. The simpler the institution’s products, services and operations, the simpler the approach that can be used,” the central bank said.
At a minimum, they are expected to practice sanction screening by verifying the names and country of residence of account holders and other persons acting on behalf of account holders.
Information on electronic transfers and commercial transactions must also be filtered. This should be done at account opening, periodically, and whenever there are updates to a client’s account information, including ultimate beneficial ownership, authorized signatories, or change of names. client.
Banks must also conduct a periodic review of all customers whenever changes are made to the sanctions list and designated persons, the BSP said.
Corporate accounts that involve one or more designated person signers will also be subject to TFS, the central bank said.
“Even if a company is not listed/designated, but there is reasonable or probable cause to believe that the company is under the control of a designated person, the penalties will also apply,” said the BSP.
Banks are expected to confirm with the Anti-Money Laundering Council within 24 hours of a target match or account that bears all the identifying information designated in the sanctions database, even if there is no amount to freeze in an account.
The Sanctions Database of Iffinancial institutions includes terrorist groups identified by the United Nations Security Council, among others.
The BSP said banks have the flexibility to include in their sanctions database other individuals or groups who have been designated by other jurisdictions, including Office of Foreign Assets Control of the United States Department of the Treasury and the European Union. — Luz Wendy T. Noble