Banks reminded to keep tight watch on transactions involving Iran, North Korea

THE BANGKO SENTRAL ng Pilipinas (BSP) told banks to keep tighter scrutiny for fund transactions involving “high risk jurisdictions” such as Iran and North Korea following a call for action from Paris-based Financial Action Task Force (FATF).

BSP Deputy Governor Chuchi G. Fonacier in Circular Letter No. CL-2021-021 said financial institutions under the central bank’s watch should adhere to FATF statements and findings for their risk analysis and mitigation strategies.

The global “dirty money” watchdog said while they have paused the review processes for both the Democratic Republic of Korea and Iran in view of the pandemic, their call to action issued in February 2020 to impose enhanced due diligence on the “high risk jurisdictions” remains in effect.

“BSP-supervised institutions should take necessary actions (such as immediate freezing and filing of returns) required under the Anti-Money Laundering Council’s (AMLC) issuances on targeted financial sanctions in cases of funds or property, including related accounts, of the designated individuals and entities referred to in all applicable UNSC (United Nations Security Council) and AMLC Resolutions,” Ms. Fonacier said.

Meanwhile, the FATF also identified “jurisdictions with strategic deficiencies” such as Albania, Barbados, Botswana, Burkina Faso, Cambodia, Cayman Islands, Ghana, Jamaica, Mauritius, Morocco, Myanmar, Nicaragua, Pakistan, Panama, Senegal, Syria, Uganda, Yemen, and Zimbabwe.

The said countries are under the watchdog’s “gray list” and “have committed to resolve swiftly the identified strategic deficiencies within agreed timeframes.” However, they are subject to increased monitoring in relation to dirty money, terrorist financing, and proliferation financing.

“The FATF does not call for the application of enhanced due diligence measures to these jurisdictions, but encourages its members to take into account the information presented in their risk analysis,” Ms. Fonacier said.

In May, BSP Circular Letter�� No. CL-2020-026 also signed by Ms. Fonacier instructed BSP-supervised financial institutions to submit urgent reports to the AMLC for transactions that involve both Iran and North Korea.

Republic Act No. 11521 signed in January strengthened the country’s Anti-Money Laundering Act, beating the Feb. 1 deadline set by the FATF to avoid its gray list. Meanwhile, Republic Act No. 11479 or the Anti-Terror Act of 2020 was signed in July to address lapses in the country’s measures against counter-terrorism and proliferation financing. — L.W.T. Noble