The Bangko Sentral ng Pilipinas (BSP) has issued a guidance paper reminding banks to design and implement preventive measures against money laundering, terrorism, and proliferation financing,
According to BSP Deputy Governor Chuchi Fonacier, the guidance paper provides practicable insights about institutional risk assessment (IRA) to achieve optimal results that would inform risk-driven approach to fighting the identified risks.
BSP-supervised financial institutions, Fonacier said, are encouraged to consider the guidance paper in the conduct of the IRA and implement a preventive measure corresponding to their risk posture.
“The guidance paper outlines, among others, the governing rules and international standards, regulatory expectations, and the IRA process,” the deputy governor said.
With IRA considered as the cornerstone of risk-based approach to money laundering, BSP outlined the paper adhering to existing laws, rules, and regulations governing IRA, including relevant documents issued by standard-setting bodies and regulator, as well as observed best practices in the conduct of IRA.
“It must be emphasized that in conducting the IRA, there is no one-size-fits-all approach and the methodology should tailor-fit to the nature and complexity of BSFI’s activities and operations,” Fonacier said.
The IRA’s function is to identify the following: the sources of money laundering and other banking risks such as terrorism, proliferation financing and sanction threat or risks; the vulnerabilities of the BSFI’s operations; the assessment of the existing controls to prevent or mitigate such risks; the determination of the residual risk and evaluation of corresponding action plans.
Last month, the intergovernmental anti-money laundering organization FATF, put the Philippines together with 22 other nations under their “gray list” which places them to increase monitoring due to strategic deficiencies to counter money laundering, terrorist financing, and proliferation financing.
The Philippines, however, has made significant progress after being reincluded in the FATF’s gray list in June last year, as it commits to work with the FATF and Asia Pacific Group on Money Laundering (APG) to strengthen the measures against money laundering and other identified risks.
This article is published on BitPinas: BSP Reminds Banks To Strengthen Measures Against Money Laundering
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