A Guide to Anti-Money Laundering for Crypto Firms
The Philippines’ Anti-Money Laundering Council (AMLC) has issued guidance to banks and financial institutions to include the identities of beneficial owners or account holders in their suspicious transaction reports (STRs), as it continues its fight against money laundering and terrorist financing.
In a new advisory, the AMLC says: “STRs must be complete, accurate, and timely, as they are vital sources of financial intelligence and are essential in the investigation and prosecution of money laundering, terrorism financing, and other related cases/crimes.”
In June, the Financial Action Task Force (FATF) placed the Philippines on its ‘gray list’ of jurisdictions under increased monitoring, citing multiple compliance deficiencies in its AML/CFT framework. The Philippines needs to implement 18 action plans to be removed from the list.
The AMLC will submit a progress report to the FATF in September and hopes to be removed from the gray list by 2023.
Meanwhile, an August follow-up report on the Philippines’ 2019 Mutual Evaluation from the FATF’s regional affiliate – the Asia Pacific Group on Money Laundering (APG) – showed the Philippines has made “notable progress” in strengthening measures to tackle money laundering and terrorist financing, and is now “largely compliant” on six of the original FATF recommendations that AMLC asked to be reassessed.
“These reassessments pertain to our technical compliance, so it does not affect our action plan items,” said AMLC Executive Director, Mel Georgie B. Racela. “However, these upgrades confirm that our legal framework has achieved an acceptable level of compliance with the FATF’s 40 recommendations.”
Beneficial ownership advisory
The AMLC’s new beneficial owners advisory tackles two recommendations from the FATF report. Recommendation 24 says that competent authorities should be able to obtain or access in a timely manner, adequate, accurate and current information on the beneficial ownership and control of companies and other legal persons that are created in the country.
Recommendation 25 says that trustees of any express trust governed under their law should be required to obtain and hold adequate, accurate, and current beneficial ownership information regarding the trust.
It also addresses one of the APG Mutual Report action plans, which is to enhance and streamline law enforcement agencies access to beneficial ownership information and takes steps to ensure that beneficial ownership information is accurate and up-to-date.
For compliance teams, the AMLC’s Guidelines on Identifying Beneficial Ownership provide sound direction on how to tackle this crucial issue. While teams may have an understanding of a company’s ownership structure on paper, it’s equally important to understand who the controlling parties are. This could include members of the company’s management board, who may not have a direct stake in the company, but still, exercise significant influence.
Compliance teams also need to ensure regulatory changes are not just embedded in policies, but the detail of day-to-day procedures. To do this, AML and KYC teams need to be aligned, particularly around the issue of ultimate beneficial ownership.
Find out more about anti-money laundering compliance for fintechs in the Philippines.
Originally published September 17, 2021, updated November 18, 2021
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