Remittance firms, money changers face stricter BSP rules

REMITTANCE changers are now facing stricter rules as the central bank adopted an updated comprehensive framework to promote more effective compliance with the implementing rules and regulation of the Anti-Money Laundering Act.

In a statement on Friday, the Bangko Sentral ng Pilipinas (BSP) said the new rules approved by the Monetary Board aim to enhance its oversight over these MSBs.

One of the most controversial cases of money laundering in Philippine history involved $81 million of stolen funds from the Bangladesh Bank account at the Federal Reserve Bank of New York last year.

Officials of remittance firm Philrem Service Corp.’ s were among those charged by the AntiMoney Laundering Council for their supposed role in laundering the $81 million. The money was transferred to the country, by still unknown perpetrators, and opened at the Jupiter Street branch of Rizal Commercial Banking Corp. (RCBC).

For failing to comply with antimoney laundering rules, the BSP registration and fined RCBC a record P1 billion.

Under the new rules approved by the Monetary Board, the BSP said it will regulate all Remittance and Transfer Companies (RTCs) such as Remittance Agents, Remittance Platform Providers and E-money Issuers.

“RTCs and other MSBs are now required to notify the BSP in cases new accreditation of Remittance Sub-agents (RSAs), change of tieup partner/s, transfer of location, and closure of business,” it said.

The central bank added that MSBs shall be further required to obtain prior regulatory approval in the event of change in ownership or control.

“They shall also submit activity level reports to the BSP. Finally, the new rules require MSBs to register with the Anti-Money Laundering Council Secretariat for purposes of covered and suspicious transactions reporting,” it said.

The regulator said it will adopt a network-based regulatory approach for MSBs since they are numerous but generally interconnected.

As of June 2016, there were more than 18,000 BSP-registered MSBs ( 5,300 head offices and 12,700 branches), 6,700 of which are also BSP-authoriz ed pawnshops, it noted.

“The MSB in the Philippines is continuously growing and evolving to support the expanding needs of its customers. It now includes, among others, the electronic money business subsidiaries of telecommunication companies,” it added.

Under a network-based regulatory approach, the BSP said an entity that operates an MSB especially a remittance business shall be held responsible for monitoring the operations of its remittance network for compliance with rules and regulations as well as for their accreditation and training.

“The new framework also in of MSBs depending on their average monthly network volume of transactions. There will be corresponding minimum capital requirement for each type. Registration fees and annual service fees shall also be based on the said

MSBs are required as part of the registration process, to execute a Deed of Undertaking, which includes, among others, compliance with all the provisions of the Anti-Money Laundering Act of 2001 and its revised implementing rules and regulations as well as the implementing rules issued by the BSP, and adoption of the minimum standards of consumer protection in the areas of disclosure and transparency, protection of client information, fair treatment, effective recourse,

Existing MSB operators are given six months from the date

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of Customs, the Departments of Labor and Employment, of Health, and of Budget and Management, the Philippine Statistics Authority, the National Tobacco Administration, and the Technical Education and Skills Development Authority.

The Senate review is in response to Dominguez’s appeal to allow the measure to “run its course” after a bill seeking to retain a two-tiered excise tax on cigarette was railroaded in the House of Representatives late last year.

Dominguez made his appeal ahead of the adoption of a unitary tax system for tobacco products, as mandated by the sin tax law.