Money service businesses are now under BSP control

The Bangko Sentral ng Pilipinas has placed money service businesses within the ambit of its regulation and the Anti-Money Laundering Act (AMLA).

It aims to enhance the oversight of money changers, remittance and transfer companies, and foreign exchange dealers for the purpose of promoting effective compliance with AMLA or Republic Act 9160.

“The money service business in the Philippines is continuously growing and evolving to support the expanding needs of its customers. It now includes, among others, the electronic money business subsidiaries of telecommunication companies,” the central bank said in a statement on Friday.

The BSP’s policy-setting Monetary Board has approved and adopted stricter rules in overseeing the operations of money service businesses.

“Under the new rules, the BSP will regulate all remittance transfer companies such as remittance agents, remittance platform providers, and e-money issuers,” the central bank noted.

“The new rules require money services businesses to register with the Anti-Money Laundering Council Secretariat for purposes of covered and suspicious transactions reporting,” it said.

The central bank also placed a limit on the amount money service businesses can transact in cash. “Large value pay-outs of more than P500,000 or its foreign currency equivalent, in any single transaction with customers or counterparties, shall only be made via check payment or direct credit to deposit accounts,” the BSP said.

Foreign exchange dealers and money changers are allowed to sell foreign currencies but not more than $10,000 or its equivalent and not exceeding $50,000 per customer per month.

“However, exemption or higher limits may be granted by the BSP upon application if justified by the business model of foreign exchange dealers and money changers,” the central bank noted.

Money service businesses must now execute a deed of undertaking as part of the registration process, the central bank said.

The deed includes compliance with all provisions of the AMLA and its revised implementing rules and regulations as well as the implementing rules issued by the BSP.

Money service business must adopt the minimum standards of consumer protection in the areas of disclosure and transparency, protection of client information, fair treatment, effective recourse and financial education.

Existing money service businesses have six months after the new rules take effect to register with the BSP. Once the six-month transition period is over, all certificates of registration previously issued by the central bank are ” … considered automatically canceled,” the BSP said.

No bank is allowed to do business with any unregistered money service business.

As of June 2016, there were more than 18,000 BSP-registered money service businesses of which 5,300 are head offices and 12,700 are branches. Out of the branches, 6,700 are also BSP-authorized pawnshops.RCBC-PhilRem

Last year the banking industry was rocked by the $81-million money laundering scandal involving Rizal Commercial Banking Corp. (RCBC) and remittance firm PhilRem Service Corp.

The Senate blue ribbon committee has found that $81million supposedly stolen by suspected hackers from the Bangladesh Bank account at the Federal Reserve Bank of New York. The money were transferred to fictitious accounts at the RCBC branch on Jupiter Street in Makati City.

PhilRem was found to have handled the fund transfers from the RCBC accounts to casinos and junket operators.

The BSP canceled PhilRem’s certificate of registration and slapped RCBC with a record P1-billion fine.

Executives of both PhilRem and RCBC were also charged violating provisions of the anti-money laundering laws by the Anti-Money Laundering Council.



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