QuestionsQuestions (AMLC REGULATORY ISSUANCE NO. 1, S. 2018)
DNFBPs must (1) adhere to high ethical standards and good governance, (2) know their customers, (3) implement an AML/CFT risk management system (identify, understand, assess, monitor, control ML/TF risks), (4) fully comply with AMLA/TFPSA laws and AMLC directives while training employees on responsibilities, and (5) cooperate fully with the AMLC for implementation of AMLA/TFPSA and related directives.
The Guidelines cover: (a) jewelry dealers, dealers in precious metals, and dealers in precious stones; (b) company service providers providing services such as formation agency, acting/arranging for directors/corporate secretary/partners, providing registered office/business address/accommodation/correspondence/administrative address, and nominee shareholder arrangements; and (c) persons including lawyers and accountants providing services managing client money/securities/assets; management of bank/savings/securities/accounts; organization of contributions for creation/operation/management of companies; and creation/operation/management of juridical persons/arrangements and buying/selling business entities.
A transaction involving (1) an amount in excess of PHP 500,000 or its equivalent, in any currency; and (2) in the case of jewelry dealers, dealers in precious metals, and dealers in precious stones, a transaction exceeding PHP 1,000,000 or its equivalent.
Any natural person who ultimately owns or controls the customer and/or on whose behalf a transaction is being conducted, or who has ultimate effective control over a legal person or arrangement.
DNFBPs must establish an effective AML/CFT compliance program; devise and implement policies/procedures/controls to prevent and detect ML/TF (including compliance regime, risk assessment, CDD, record keeping, training, employee screening, suspicious transaction detection and reporting); ensure dissemination of policies to employees; conduct ongoing training; and conduct regular independent review of their AML/CFT program.
At least once every two (2) years, or as may be determined by the AMLC.
A compliance officer of senior management status must be designated to ensure day-to-day compliance, with authority to report to the Board/governing body/partners/sole proprietor, and to report compliance failures and new AML/CFT obligations. The compliance officer must also ensure compliance measures reflect new trends in ML/TF and detection techniques.
At minimum: detailed procedures covering customer identification/acceptance and ongoing monitoring; record keeping and retention; covered transaction reporting (CTR) and suspicious transaction reporting (STR) including a flagging/monitoring system and reporting chain/approval decision process; continuous AML/CFT training; risk-based screening and recruitment; internal audit system/independent audit program; mechanism to correct deficiencies; cooperation with AMLC; designation of the compliance officer; and identification/assessment/mitigation of ML/TF risks from new business practices/technologies/products.
DNFBPs must have internal controls and periodic internal audits by qualified personnel independent of the unit audited. Internal audits must cover compliance-related accuracy (customer identification, CTR/STR, and records/controls). They must be conducted at least once every two (2) years or at a frequency consistent with risk assessment.
CDD must be undertaken when: (1) establishing a business relationship; (2) there is suspicion of ML or TF; and (3) doubts arise about the integrity or adequacy of previously obtained client identification information.
If ML/TF risks are assessed as low and verification is not possible at the point of establishing the relationship, verification may be completed after establishment, but not later than five (5) working days (or any other period specified by the AMLC).
DNFBPs must: (1) identify and verify the client’s identity using reliable independent documents/data/information; (2) verify the authority and identity of any person acting on behalf of the client; (3) identify the beneficial owner and take reasonable measures to verify beneficial owner identity; (4) understand (and where relevant obtain information on) the purpose and intended nature of the business relationship; and (5) conduct ongoing due diligence.
DNFBPs must keep records of customers’ transactions and documents obtained during CDD for five (5) years. They must also safely store records for five (5) years from transaction dates; if a court case is filed involving the account, records must be retained beyond five years until confirmed by AMLC Secretariat that the case is resolved/decided/terminated with finality. For accounts terminated, retain records for at least five (5) years from termination. Electronic copies of CTR/STR must also be kept for at least five (5) years from submission to the AMLC.
DNFBPs must report both covered and suspicious transactions within five (5) working days from occurrence. For STRs, “occurrence” is the date of determination of suspicious nature, which must be made not exceeding ten (10) calendar days from the date of transaction. If related to unlawful activity or predicate offenses, the determination period reckons from when the covered person knew/should have known, with a reasonable fact-gathering period not exceeding sixty (60) calendar days.
DNFBPs and their officers/employees are prohibited from communicating to any person/media that a covered or suspicious transaction has been or will be reported, the report contents, or related information. Information about reporting must not be published/aired, including via mass media or electronic mail. Violations impose criminal liability on the responsible parties and media.
Not always. Lawyers and accountants authorized to practice in the Philippines and acting as independent legal/accounting professionals are not deemed covered persons regarding information about clients if disclosure would compromise client confidence or the attorney-client relationship. They are not required to file CTR or STR. However, they may report to AMLC in utmost confidentiality knowledge that a client is committing or contemplating ML/TF, for matters outside privileged communication; such submissions are accepted by AMLC.
High-risk customers include those from countries with inadequate AML standards and other risk factors (e.g., shell companies, prevalence of crime/corruption/TF). DNFBPs must apply Enhanced Due Diligence (EDD) when acquiring information that justifies reclassification or when establishing relationships with persons from FATF/AMLC high-risk jurisdictions. EDD includes obtaining additional information on customer and beneficial owner (and for juridical persons, details on banks where the entity maintains accounts, details of primary officers and significant stockholders, sources of assets, and the specific services sought), with senior-management approval for commencing with high-risk customers.