Report on the Risk Assessment of Cash, Cross-Border, and Cross-Sector Transactions

OFFICE OF THE DEPUTY GOVERNOR FINANCIAL SUPERVISION SECTOR 005 MEMORANDUM NO. M-2021-___ To : All BSP-Supervised Financial Institutions (BSFIs) Subject : Report on the Risk Assessment of Cash, Cross-Border, and Cross-Sector Transactions The Monetary Board, in its Resolution No. 20 dated 7 January 2021, approved the attached report on money laundering (ML)/terrorist financing (TF)/proliferation financing (PF) risk assessment of cash, cross-border, and cross-sector transactions of banks and other BSP- supervised financial institutions1 (BSFIs) in line with the thrust of the Bangko Sentral to promote effective risk management systems to combat ML/TF/PF. The report on risk assessment of cash, cross-border, and cross-sector transactions is part of the broader sectoral risk assessment (SRA) being conducted by the Bangko Sentral. It represents the first phase of the SRA that focused on the assessment of risks attendant to cash, cross-border, and cross-sector transactions. The assessment seeks to understand, analyze, and assess the ML/TF/PF risks arising from cash transactions of banks and other BSFIs, the flow of suspected criminal proceeds through cross-border transactions, and the risks across certain sectors. BSFIs are expected to consider the findings and conclusions in the report in their respective institutional risk assessments and implement necessary measures to address the identified risk areas. For information and guidance. Digitally signed by Chuchi G. Fonacier Date: 2021.01.13 21:02:44 +08'00' CHUCHI G. FONACIER Deputy Governor 13 January 2021 Att: a/s 1 Other BSFIs include non-bank financial institutions (NBFIs) namely, trust entities, non-stock savings and loan associations (NSSLAs), money service businesses, non-bank electronic money (e-money) issuers (EMIs), virtual currency exchanges (VCEs)/virtual assets service providers (VASP), pawnshops and operators of payment systems. A. Mabini St., Malate 1004 Manila, Philippines * (632) 87087701 * www.bsp.gov.ph * [email protected]

  BANGKOSENTRALNGPILIPINAS RISKASSESSMENTOF CASH,CROSSͲBORDER ANDCROSSͲSECTOR TRANSACTIONS January2021

TABLEOFCONTENTS RISKASSESSMENTOFCASH,CROSSͲBORDER,ANDCROSSͲSECTORTRANSACTIONS.........................1 ASSESSMENTMETHODOLOGYANDDATACOLLECTION.....................................................................1 THEPHILIPPINEFINANCIALSYSTEM...................................................................................................2 1CASHTRANSACTIONSASSESSMENT...................................................................................2 LevelandExtentofuseofCashTransactions ....................................................................... 3 ThreatAssessment.................................................................................................................3 VulnerabilityAssessment........................................................................................................6 2CROSSͲBORDERTRANSACTIONS..........................................................................................7 ThreatEnvironment................................................................................................................7 VulnerabilityAssessment ................................................................................................... 10 3CROSSͲSECTORASSESSMENT.............................................................................................11 ThreatEnvironment ........................................................................................................... 11 TypologiesonML/TFandrelatedPredicateOffenses ........................................................ 12 STRStatistics ...................................................................................................................... 14 SectoralThreatandVulnerabilityAssessment.................................................................... 15 CONSEQUENCE.............................................................................................................................16                

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