Anti-Money Laundering Council (AMLC) Resolution No. 59

Sannbo na hina.

OFFICE OF THE DEPUtY GOVERNOR SUPERVISION AND EXAMINATION SECTOR

CIRCULAR LETTER

To All Banks and Non-Bank Financial Institutions Under BSp Supervision

through its Resoiution No. 59 dated 1 June 2005, copy attached, listed hereunder Pursuant to the request of the Anti-Money Laundering Council (AMLC)

are suspicious transaction indicators or "red flags" to serve as your guide in the submission to the AMLC of reports of suspicious transactions relating to potential or actual financing of terrorism:

Wire transfers between accounts, without visibie economic or business purpose, especially if the wire transfers are effected through countries which are identified or connected with terrorist activities.

2 Sources and/or beneficiaries of wire transfers are citizens of countries

which are identified or connected with terrorist activities.

3 Repetitive deposits or withdrawals that cannot be explained or do not

make sense.

earning. Value of the transaction is over and above what the client is capabie of

5 Client is conducting a transaction that is out of the ordinary for his known

business interest.

Deposits being made by individuals who have no known connection or 6

relation with the account holder.

An individual receiving remittances, but has no family members working in the country from which the remittance is made

8 terrorist activities. Client was reported ard/or mentioned in the news to be invoived in

PANANALAPING MATATAG, BANSANG PANATAG

A. Mabini St., Malate 1004, Manila, Philippines Trunkline (632) 524-70-11 URL:www.bsp.gov.ph e-mait: bspmail@bsp gov.ph

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9 Client is under investigation by law enforcement agencies for possible

involvement in terrorist activities.

10 Transactions of individuals, companies or non-governmental organizations (NGOs) that are affiliated or related to people suspected of being connected to a terrorist group or a group that advocates viotent overthrow of a government.

1 M Transactions of individuals, companies or NGOs that are suspected as being used to pay or receive funds from revolutionary taxes.

12 The NGO does not appear to have expenses normally related to relief or humanitarian efforts

13 The absence of contributions from donors iocated within the country of

origin of the NGO.

14 A mismatch between the pattern and size of financial transactions on the

one hand and the stated purpose and activity of the NGO on the other.

15 Incongruities between apparent sources and amount of funds raised or

moved by the NGO

16. Any other transaction that is similar, identical or analogous to any of the foregoing.

Please be guided accordingly

NESTOR A. ESPENILL

Deputy Governor?

Att.: A/S

IL. Jjune 2005

Anti-Money Laundering Council

Bangko Sentral ng Pilipinas Complex Manila, Philippines

RESOLUTION NO. 59

SERIES CF 2005.

Under the following provisions of Republic Act No. 9160, otherwise known as the Anti-Money Laundering Act of 2001, as amended (AMiA), covered institutions are legally obligated to report as suspicious transactions to the Anti- Money Laundering Council all transactions related to an unlawful activity: or offense under the AMLA that is about to be, is being or has been committed. to wit:

"SEC. 3. Definitions. -- For purposes of this Act, the foilowing terms are hereby defined as follows:

XXX

(b-1) 'Suspicious transaction' are transactions with covered

institutions, regardless of the amounts involved, where any of the following circumstances exist:

X X X

6 the transaction is in any way related to an unlawful activity or ofrense unter tnis

Act that is about to be, is being or has baen commiiied: or

XXX

D 'Unlawful activity' refers to any act or omission or series or combination thereof involving or having

direct relation to the following:

X X X

(12) Hijacking and other violations under Republic

Act No. 6235; destructive arson and murder, as defined under the Revised Penal. Code, as amended, including those oarpetratca Dy

terrorists against non-combatant persons and similar targetst

X X X

SEC. 7. Creation of Anti-Money Laundering Council (AMLC). --- The Anti-Money Laundering Council is hereby created and shall be tomposed of the Governor of the Bangko Sentral ng Pilipinas as chairman, the Commissioner of the Insurance Commission and the Chairman of the Securities and Exchange Commission as members. The AMLC shall act unanimously in the discharge of its functions as defined hereunder:

X X X

1) to require and receive covered or suspicious transaction reports from covered institutions;"

Based on international standards and iocal experience, the following circumstances/transactions are considered suspicious transaction indicators or red flags which would obligate covered institutions to exercise extra diligence in deating with transactions where any of these circumstances/transactiors exists:

(1) Wire transfers between accounts, without visibie economic or business purpose, especially if the wire transfers are effected

through countries which are identified or connected with terrorist

(2 Sources and/or beneficiaries of wire transfers are citizens of activities. countries which are identified or connected with terrorist activities. 3) Repetitive deposits or withdrawais that cannot be explaineci or do

( } Value of the transaction is over and above what the client is Client is conducting a transaction that is out of the ordinary for his not make sense. capable of earning. known business interest. ( Deposits being made by indiviauais who have ne known connecricn

or relation with the account ho!der. } An individuaf receiving remittances, but has no family members

working in the country from which the remittance is mzde. C Cliant was reportod and/or mantionad in tha newe to ba invoived m

terrorist activities. ( ) Client is under investigation by law enforcement agencies for possible involvement in terrorist activities.

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10 Transactions of individuals, companies or Non-Governmentai

11) (12 (13) advocates violent overthrow of a government. suspected of being connected to a terrorist group or a group that Transactions of individuals, companies or NGOs that are suspected Organizations (NGOs) that are affitiated or related to people The NGO does not appear to have expenses normally reiated to relief or humanitarian efforts. The absence of contributions from donors located within the as being used to pay or receive funds from revolutionary taxes.

(14) A mismatch between the pattern and size of financial transactions country of origin of the NGO.

(15) (16) Incongruities between apparent sources and amount of funds the other. of the foregoing. Any other transaction that is similar, identical or-analogous to any on the one hand and the stated purpose and activity of the NGO on raised or moved by the NGO.

WHEREFORE, the Council resolves to:

(1) the aforesaid list of suspicious transaction indicators or red flags, to Furnish all covered institutions, thru the Supervisory Authorities

serve as a guide in their submission of reports of suspicious transactions relating to potential or actual financing of terrorism to the AMLC; and

2) Require the Supervisory Authorities to circularize among all covered institutions under their respective jurisdictions, copy of the said Resolution.

1 Jur - 2005, Manila, Philippines.

afe

(Officer-in-Charge, Bangko Sentrai ng Pilipinas) AMANDO M.TETANGCO. Jr Acting Chairman

(Chairperson, Securities and Exchange Commission) Fe B Bain Member (Commissioner, Insurance Commission) BENJAMIN S. SANTOS Member

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