On 29 April 2024, the Bangko Sentral ng Pilipinas ("BSP") issued Circular No. 1193 ("Circular"). The Circular amended Section 911 of the Manual of Regulations for Banks and Section 911-Q of the Manual of Regulations for Non-Bank Financial Institutions. It amends the current risk reporting and notification requirements.
Under the new regime, all covered BSP-supervised financial institutions are now required to submit an "ML/TF/PF Risk Event Report" ("Risk Report") which covers data and information on significant risks arising from money laundering ("ML"), terrorist financing ("TF"), and proliferation financing ("PF"). The Risk Report shall be submitted to BSP within 24 hours from the date of knowledge or discovery of occurrence, which, as specified in the Circular, refers to the time the event has been known or should have been known to the covered person. This Risk Report, as further explained in the Circular, is intended to facilitate BSP in identifying emerging ML/TF/PF risks and other supervisory concerns.
To determine whether an ML/TF/PF risk event is significant and reportable, the following are considered: (i) the amount involved represents 1% or more of the covered person's total qualifying capital; and (ii) regardless of the amount involved, the covered person has determined that the ML/TF/PF-related incident has a material impact on the covered person and/or the financial system.
At the minimum, the Risk Report should contain the following: (i) the date of knowledge or discovery of occurrence of the event or incident; (ii) brief description of the event/incident; (iii) initial root cause of the event/incident and responses/actions taken; and (iv) impact on the covered person based on initial assessment.
Non-compliance with the Risk Report requirements is subject to applicable monetary penalties and other corrective actions to be enforced by BSP. The Circular took effect from 24 May 2024.
