Law Summary

Section 1: Registration

• Legal Principle: All foreign exchange dealers (FXDs), money changers (MCs), and remittance agents (RAs) must register with the Bangko Sentral ng Pilipinas (BSP) prior to commencing operations.
• Key Definitions:
  • FXDs/MCs: Entities engaged in buying and selling foreign currencies.
  • RAs: Entities that remit, transfer, or transmit money on behalf of others.
• Requirements:
  • Registration with BSP is compulsory.
  • Existing FXDs/MCs and RAs must file for registration within 90 days of the Circular's effectivity.
• Timeframes: 90 calendar days from the effectivity of the Circular for existing entities.
• Consequences: Failure to register may result in operational prohibition.

Section 2: Application for Registration

• Legal Principle: A structured application process is established for registration.
• Requirements:
  • Submission of incorporation papers or Certificate of Registration.
  • Business license/permit from local government.
  • List of stockholders/partners/directors.
  • Notarized Deed of Undertaking to comply with laws.
  • Additional documents as requested by BSP.
• Timeframes: Existing entities to apply within 90 days of the Circular's effectivity.

Section 3: Applicability of Other Laws/Regulations

• Legal Principle: FXDs, MCs, and RAs must comply with other pertinent laws.
• Cross-References:
  • R.A. No. 7653: The New Central Bank Act.
  • R.A. No. 9160: Anti-Money Laundering Act, as amended.
• Requirements: Compliance with customer identification, record-keeping, and reporting obligations under the cited laws.

Section 4: Required Seminar/Training

• Legal Principle: Personnel involved in foreign exchange operations must undergo training.
• Requirements:
  • Attendance at a seminar on anti-money laundering law by AMLC or accredited providers.
  • Training to be echoed to all employees within 30 days post-seminar.
• Timeframes: Training must be completed before the issuance of the Certificate of Registration.

Section 5: Sale and Purchase Procedures

• Legal Principle: Establishes minimum procedures for currency transactions.
• Requirements:
  • Issuance of official receipts in numerical order.
  • Daily Record of Foreign Exchange Transactions must be maintained.
  • Transactions to be conducted at the principal place of business.
• Consequences: Non-compliance may lead to penalties.

Section 6: Application for Currency Transactions

• Legal Principle: Establishes documentation requirements for currency sales/purchases.
• Requirements for Individuals:
  • Completion of an application form with personal details.
• Requirements for Corporates:
  • Additional documentation including Articles of Incorporation and identification of representatives.
• Consequences: Non-compliance may hinder transactions.

Section 7: Additional Requirements for Large Transactions

• Legal Principle: Stricter requirements for transactions exceeding $5,000.
• Requirements:
  • Notarized application and supporting documents must be provided.
  • Prohibition against splitting transactions to evade limits.
• Timeframes: Defined as within a 15 banking day period for cumulative transactions.

Section 8: Requirements for Remittance Agents

• Legal Principle: RAs must maintain thorough documentation for remittances.
• Requirements:
  • Similar to currency transaction applications, with additional information regarding beneficiaries.
• Consequences: Non-compliance may result in penalties or operational restrictions.

Section 9: Reportorial Requirements

• Legal Principle: Obligation to report certain transactions to the AMLC.
• Requirements:
  • Reports on covered transactions (exceeding P500,000) and suspicious transactions must be submitted within 5 banking days.
• Consequences: Failure to report may result in penalties.

Section 10: Sanctions

• Legal Principle: Establishes penalties for violations.
• Sanctions:
  • Violating registration requirements can lead to penalties under R.A. No. 7653.
  • Violations of the Anti-Money Laundering Act can incur penalties as prescribed by the Act.
  • Other violations may incur penalties from the AMLC.

Section 11: Industry Association

• Legal Principle: Encourages membership in industry associations.
• Requirements: Membership in an association of registered FXDs, MCs, and RAs is encouraged for better compliance and standards.

Section 12: Effectivity Clause

• Legal Principle: This Circular will take effect after publication.
• Timeframes: Effective 15 days post-publication in the Official Gazette or a newspaper of general circulation.

Key Takeaways

• Registration with BSP is mandatory for all FXDs, MCs, and RAs.
• Compliance with anti-money laundering laws is crucial, including training and documentation.
• Specific transaction procedures and reporting requirements are established to ensure transparency.
• Non-compliance can result in significant penalties and operational limitations.