THE Anti-Money Laundering Council (AMLC) said it will impose sanctions on organizations with lax internal controls against money laundering, including those that demonstrate shortcomings in meeting know-your-customer (KYC) rules and training standards.
In Regulatory Issuance No. 5 Series of 2020 published in BusinessWorld Tuesday, AMLC said a unit of its Detection and Prevention Department, the Compliance and Supervision Group, will monitor compliance of covered persons under the Anti-Money Laundering Act, the Terrorism Financing Prevention and Suppression Act and other AMLC rules.
“Consistent with the policy to exact compliance with these laws and issuances and to impose proportionate and dissuasive sanctions for non-compliance, the AMLC may use enforcement actions to require covered persons to take timely action to correct deficient practices,” the AMLC said.
The deficient practices include violations of know-your-customer procedures for banks, inadequate transaction and account monitoring, inadequate internal audit, non-compliance with record-keeping rules, and insufficient training in detecting and deterring money laundering.
Covered persons include banks and quasi-banks, insurance companies and their agents, and jewelry dealers.
The AMLC said the sanctions include warnings, compliance letters, compliance complaints, and a review of transactions those classified as covered persons.
The AMLC may also conduct a compliance test or appoint an independent external auditor to look into covered persons’ systems and processes.
The AMLC has the power to order covered persons to return funds or property subjected to a freeze order by a court. The AMLC may also issue a public advisory on its website regarding the non-compliance and other findings following an examination of covered persons.
The Philippines is under an observation period that was extended to February 2021 from the initial deadline set in October. During this time, the country is expected to address the gaps in its anti-money laundering and counter-terrorism financing rules.
Failure to pass the review will put the Philippines at risk of inclusion in the gray list of countries deemed lax in enforcing money laundering rules.
Amendments to the Anti-Money Laundering Act, which will grant more subpoena powers to the AMLC, remains pending in Congress. — Luz Wendy T. Noble