BSP cautions vs N Korea bank deals

The Bangko Sentral ng Pilipinas (BSP) has directed banks and other financial institutions to closely monitor any financial transaction involving North Korea in light of the sanction imposed by the United Nations (UN).

BSP Deputy Governor Nestor Espe- nilla Jr. issued Circular Letter 2017-035 informing all BSP-supervised financial institutions (BSFIs) about the imposition of sanctions against Democratic People’s Republic of Korea through UN Security Council Resolution

(UNSCR) No. 2321.

Espenilla said the BSP and the Department of Foreign Affairs (DFA) fully support the UNSCR issued last year.

“Within the bounds of banking laws, rules and regulations, advises BSP-supervised financial institutions to closely monitor and exercise vigilance on any financial transactions with the individuals and entities,” Espenilla said.

The UN Security Council issued the resolution last Nov. 30 imposing sanctions on North Korea for a nuclear test two months prior, a violation of the UN Treaty on Non-Proliferation of Nuclear Weapons.

Annex I of the resolution froze the assets of and imposed a travel ban on 11 individuals, most of whom were said to be affiliated with state-owned Korea Mining Development Trading Corp., North Korea’s primary arms dealer.

Annex 2, meanwhile, froze the assets of 10 North Korean banks and state-run firms.

“Please note that the measures imposed under UNSCR 2321 (2016) also apply to any individuals and entities acting on their behalf or at their direction, and to entities owned or controlled by them including through illicit means,” Espenilla added.

The incoming BSP chief said BSFIs should report to the central bank’s Supervision and Examination Sector and to the Anti-Money Laundering Council any known information, such as name, nature of transaction, amount involved, and date, regarding the cited individuals and entities referred to in the resolution.

The Senate is looking at passing the amendments to the Anti-Money Laundering Act (AMLA) this month to beat the deadline imposed by the Asia/ Pacific Group on Money Laundering (APG) to strengthen the law.

Sen. Francis Escudero, chairman of the Senate committee on banks, financial institutions and currencies, asked his colleagues to pass Senate Bill 1468, which he described as a simple amendment to the AMLA.

The bill, approved on second reading, seeks to put more teeth into the existing AMLA by including the casino industry under coverage of the law.

In its plenary meeting last September, APG decided to give the Philippines until June this year to pass the required legislation.

The inclusion of casinos in the AMLA coverage is one of the recommendations of the Financial Action Task Force (FATF), a global anti-money laundering and anti-terrorism watchdog, to avoid the potential blacklisting of the Philippines.

“Failure to enact the required legislation within the given timeframe would put the Philippines under monitoring of the International Review Group of the FATF, which could eventually result in the possible blacklisting of the Philippines,” Escudero said.

Moreover, the senator said the blacklist tag would put the country under stringent international financial scrutiny, which might increase the cost of bank transactions abroad.