Banks cautioned vs digital vote buying, money laundering

MANILA — The Bangko Sentral ng Pilipinas (BSP) has cautioned banks and financial institutions against digital vote buying and vote selling as well as money laundering, ahead of the upcoming synchronized barangay and Sangguiniang Kabataan elections.

BSP Deputy Governor Chuchi Fonacier called on the BSP-supervised financial institutions (BSFIs) to adopt enhanced surveillance and monitoring measures to prevent a misuse of the financial system, making it a conduit of the digital vote buying or selling schemes for the local polls on Oct. 30.

Fonacier said the reminder is in line with efforts of the national government and the Commission on Elections to curb vote buying and vote selling.

“BSFIs are likewise urged to tighten their existing controls in detecting or preventing the possible influx of fraudulent accounts and transactions as the election date approaches,” Fonacier added.

She said banks should reinforce their measures and controls to ensure that appropriate customer onboarding processes, effective fraud management system and ongoing account and transaction monitoring capabilities are commensurate to respond to fraudulent activities and mitigate the heightened risk of possible use or misuse of digital channels such as online banking and mobile wallet applications in the illegal schemes.

According to Fonacier, the BSFIs should submit suspicious transaction reports to the Anti-Money Laundering Council after due investigation of complex, unusually large transactions; unusual patterns of transactions with no underlying legal or trade obligation, purpose or economic justification; if the amount involved is not commensurate with the business or financial profile of the client; and other transactions that may be considered suspicious.

The BSP also issued Memorandum 2023–029 to remind the BSFIs on appropriate customer due diligence on politically exposed persons or PEPs, which refer to individuals who are or have been entrusted with prominent public position in the country with substantial authority over policy, operations or the use or allocation of government-owned resources, a foreign state, or an international organization.

As part of customer due diligence, Fonacier said covered persons should establish and record the true and full identity of PEPs, as well as their immediate family members and close associates.

“BSFIs are reminded of the risk-based procedures for the varying categories of PEPs. For domestic and international organization PEPs, onboarding procedures that shall be applied shall be similar to those applied to other customers, such as customer identification and verification,” she said.

Unlike foreign PEPs, Fonacier explained that domestic and international organization PEPs are not automatically considered as high risk and the applicable and appropriate customer due diligence should be determined by the results of the BSFI’s risk profiling. (philstar)