Financial Institutions Must Comply with Anti-Terrorism Financing Rules
Background
The Bangko Sentral ng Pilipinas (BSP) has issued guidelines for financial institutions to comply with anti-terrorism financing rules, aiming to prevent the use of the financial system to finance terrorism.
Compliance Requirements
To mitigate risks, financial institutions must:
- Conduct risk re-assessment and enhanced due diligence on customers and transactions
- Submit Suspicious Transaction Reports (STRs) if there is a match with individuals or entities listed in unilateral sanctions lists, including related accounts
Delisting Process and Asset Freezing
The guidelines also cover the delisting process for designated persons or entities, as well as procedures for:
- Freezing assets
- Financial services restrictions
Proactive Approach
A BSP official emphasized that financial institutions must take a proactive approach to prevent terrorism financing: “We urge all banks and financial institutions to conduct thorough checks on their customers and transactions to ensure compliance with anti-terrorism financing rules.”
Clarification on Asset Freezing
The guidelines provide clarification on situations where assets must be frozen, including:
- Cases where a designated person is a beneficial owner
- When there are reasonable grounds to believe that an entity is under the control of a designated person
Additional Requirements
Financial institutions were reminded to file STRs against immediate family members of designated individuals if their accounts meet the definition of suspicious transactions. Additionally, e-returns and STRs must be filed even in cases where:
- There is no asset to freeze
- Banking relationship has been discontinued
International Standards
The guidelines are part of the Philippines’ efforts to comply with international standards on anti-terrorism financing and prevent the use of its financial system for terrorist activities.
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