Bulk Reporting of Multiple Fraud-Related and Other Suspicious Transactions

January 20, 2016 AMLC RESOLUTION NO. 05, S. 2016 In the Memorandum dated 15 January 2016, the AMLC Secretariat (AMLCS) reported to the Council that: Bulk Reporting of Multiple Suspicious Transactions Resolution No. 43, Series of 2014, authorizes covered persons to submit fifty (50) or more suspicious transactions under one Suspicious Transaction Report STR. The authority was based on the impracticality of requiring covered persons to file STRs on each of these transactions. A case in point is when an investment scam breaks out where it is impractical for covered persons to report suspicious transactions on a daily basis. The guidelines in Resolution No. 43, Series of 2014, require that the reportable transactions should involve the same suspicious transaction indicator, and refer to the same accountholder and account number. The guidelines also provide that the transaction details shall be included as part of the narrative (not to exceed 4,000 characters) or can be extracted as an Excel file and submitted to the AMLC as an STR attachment. The guidelines, however, do not prescribe a standard reporting format. As a result, covered persons file the corresponding STRs in a variety of forms. The STRs that are not in the standard format could not be uploaded to the database, resulting in the difficulty of analyzing them and comparing them with related transactions in the database. Thus there is a need to revisit the guidelines. cSaATC Bulk Reporting of Multiple Fraud-Related Suspicious Transactions The Council also receives from banks STRs relative to fraudulent transactions (fraud-related transactions) arising from: 1. Use of skimmed, stolen or lost credit and ATM cards; 2. Mail order/telephone orders; 3. Unauthorized withdrawals; 4. Point of sale-Debit; and 5. Spurious checks. In fraud-related transactions, the victims are different account holders and the perpetrators are unknown. Yet, the filing of STRs is warranted by the fact that they are related to an unlawful activity pursuant to Section 3(b-1)(6) of the Anti-Money Laundering Act of 2001 (AMLA), as amended. The filing of STR on each of the fraud-related transactions is impractical because of their volume. But unlike the bulk suspicious transactions described in Resolution No. 43, Series of 2014, the fraud-related transactions involve different accounts of different account owners. Thus the reporting thereof is not covered by the said Resolution. Consultation: The AMLC Secretariat held a consultation with the stakeholders on the reporting format under Resolution No. 43, Series of 2014. A similar consultation was held on the issue of bulk reporting of fraud-related transactions under one STR. It was agreed that the reporting format under Resolution No. 43, Series of 2014 be streamlined along with the formulation of a reporting format for fraud-related transactions involving different account holders as victims. It was likewise agreed that in both formats, the number of reportable transactions under one STR shall be at least five (5) suspicious transactions. The Council resolved to: 1. Amend Resolution No. 43, Series of 2014 by: i. Reducing the number of reportable bulk suspicious transactions from fifty (50) or more to at least five (5) suspicious transactions; ii. Adopting a standard reporting format for the aforementioned transactions using Format B1 ( Annex A hereof). 2. Require covered persons to report, using Format B2 ( Annex B hereof), for fraud-related transactions involving different account holders. cHDAIS 3. Adopt the following guidelines for Format B1 and B2: i. In both formats, the first row should contain all details/fields common to all transactions, and the succeeding rows should contain the details of the transactions; ii. The filename format should follow the convention of a regular STR; iii. Files should be saved as CSV and be encrypted; iv. The STR should be uploaded in the AMLC portal like a regular STR; v. For Format B2, transactions should be limited to those with Transaction Codes where the mandatory party is the account holder and the subject of suspicion is unknown; and vi. In all cases, covered persons have the option to file STR on each suspicious transaction, or in bulk pursuant to the herein guidelines. 4. Request the Bangko Sentral ng Pilipinas, the Securities and Exchange Commission and Insurance Commission, to disseminate copies of this Resolution to covered persons under their supervisory authority. January 20, 2016, Manila, Philippines. (SGD.) AMANDO M. TETANGCO, JR. Chairman (Governor, Bangko Sentral ng Pilipinas) (SGD.) TERESITA J. HERBOSA Member (Chairperson, Securities and Exchange Commission) (SGD.) EMMANUEL F. DOOC Member (Commissioner, Insurance Commission) ANNEX A Bulk Reporting under AMLC Resolution 43 Series of 2014 (B1) First Row Column Field Name Type Length Format Value/Remarks A1 Format Code Text 4 X(2) B1 B1 Submission Type Text 1 X(1) A - add, E - edit, D - delete, T - test C1 Report Date Number 8 9(8) yyyymmdd D1 Account Number Text 40 X(40) Name Text E1 Last Name 30 X(30) Last name of account holder F1 First Name 30 X(30) First name of account holder G1 Middle Name 30 X(30) Middle name of account holder Address H1 Address1 50 X(50) Room No./Office Name, Bldg./House No., Street, Subd./Brgy. I1 Address2 50 X(50) District, Town, City J1 Address3 30 X(30) Province, Country code, ZIP K1 Birthdate/Registration Number 8 9(8) YYYMMDD Date L1 Place of Text 90 X(90) City, Municipality, Country Birth/Registration M1 Nationality Text 40 X(40) N1 ID Type Text 4 X(4) ID1 Passport ID2 Driver's License pls refer to AMLC's manual for complete Iist O1 Identification No. Text 30 X(30) P1 Nature of Business Text 35 X(35) Q1 Reason Memo 800 Reason for Suspicion SI1 There is no underlying legal or trade obligation, purpose or economic justification. SI2 The client is not properly identified. SI6 The transaction is similar, analogous or identical to any of the foregoing. (Additional reason is required after a semicolon i.e., SI6; The client is . . .) PC1 Kidnapping for ransom PC2 Drug trafficking and related offenses PC3 Graft and corrupt practices pls refer to AMLC's Reporting Procedures manual for the complete list R1 Narrative Memo 4000 Narrative of events leading to Suspicion Details of the transactions (Starting at row 2) Column Field Name Type Length Format Value/Remarks A Party type Flag of Subject Text 1 X A Account Holder; B Beneficiary; C (Name indicated in Row 1) Counterpart (pls. refer to the AMLC Reporting Procedures Manual for a complete list) B Institution Code Number 11 9(11) As provided by AMLC (Institution code of the branch where the transaction took place) C Transaction Date Number 8 9(8) yyyymmdd D Transaction Code Text 5 X(5) AMLC Transaction Codes E Transaction Reference No. Text 20 X(20) must be unique per tran date F Transaction Amount (Php) Number 20 9(18).99 Greater than 0 w/ or w/o decimal value G Transaction Amount (FX) Number 17 9(15).99 Optional H FX Currency Code Text 3 X(3) optional; mandatory if fx amount <> null I Name of Correspondent Text 90 X(90) Bank J Address1 50 X(50) Room No./Office Name, Bldg./House No., Street, Subd./Brgy. K Address2 50 X(50) District, Town, City L Address3 30 X(30) Province, Country code, ZIP M Country Code of Number 3 9(3) Country Code (Please refer to system codes Correspondent Bank in the AMLC Reporting Procedures Manual) For transactions involving multiple parties continue with Columns N, O, P . . . Column Field Name Type Length Format Value/Remarks N Party Type Flag Text 1 X A Account Holder; B Beneficiary; C Counterpart (pls. refer to the AMLC Reporting Procedures Manual for a complete list) Name Text O Last Name 30 X(30) Last name of account holder P First Name 30 X(30) First name of account holder Q Middle Name 30 X(30) Middle name of account holder Address R Address1 50 X(50) Room No./Office Name, Bldg./House No., Street, Subd./Brgy. S Address2 50 X(50) District, Town, City T Address3 30 X(30) Province, Country code, ZIP U Birthdate/Registration Number 8 9(8) YYYMMDD Date V Account Number Text 40 X(40) Rules on Mandatory Fields still applies (See Annex F for the guidelines) ANNEX B Bulk Reporting Electronic Record Format (BLK2) First Row Column Field Name Type Length Format Value/Remarks A1 Format Code Text 4 X(2) B2 B1 Submission Type Text 1 X(1) A - add, E - edit, D - delete, T - test C1 Report Date Number 8 9(8) YYYYMMDD D1 Reason Memo 800 Reason for Suspicion SI1 There is no underlying legal or trade obligation, purpose or economic justification. SI2 The client is not properly identified. SI6 The transaction is similar, analogous or identical to any of the foregoing. (Additional reason is required after a semicolon i.e., SI6; The client is . . .) PC1 Kidnapping for ransom PC2 Drug trafficking and related offenses PC3 Graft and corrupt practices pls. refer to AMLC's Reporting Procedures manual for the complete list E1 Narrative Memo 4000 Narrative of events leading to Suspicion Details of the transactions (Starting at row 2) Column Field Name Type Length Format Value/Remarks A Institution Code Number 11 9(11) As provided by AMLC (Institution code of the branch where the transaction took place) B Transaction Date Number 8 9(8) yyyymmdd C Transaction Code Text 5 X(5) AMLC Transaction Codes D Transaction Reference No. Text 20 X(20) must be unique per tran date E Account Number Text 40 X(40) F Transaction Amount (Php) Number 20 9(18).99 Greater than 0 w/ or w/o decimal value G Transaction Amount (FX) Number 17 9(15).99 Optional H FX Currency Code Text 3 X(3) optional; mandatory if fx amount <> null Name Text I Last Name 30 X(30) Last name of account holder J First Name 30 X(30) First name of account holder K Middle Name 30 X(30) Middle name of account holder Address L Address1 50 X(50) Room No./Office Name, Bldg./House No., Street, Subd./Brgy. M Address2 50 X(50) District, Town, City N Address3 30 X(30) Province, Country code, ZIP O Birthdate Number 8 9(8) YYYYMMDD