Anti-Money Laundering Council (AMLC) Resolution No. 01 Dated 16 January 2006

January 24, 2006 BSP CIRCULAR LETTER TO : All Banks and Non-Bank Financial Institutions Under BSP Supervision SUBJECT : Anti-Money Laundering Council (AMLC) Resolution No. 01 Dated 16 January 2006 Pursuant to Anti-Money Laundering Council Resolution No. 01 (Series of 2006) dated 16 January 2006, copy attached, we are furnishing you a copy of the Advisory Notice issued by the United States Department of Treasury. The Advisory Notice seeks to warn all concerned that the Democratic People's Republic of Korea (DPRK), acting through government agencies and associated front companies, is engaged in illicit activities and may be seeking banking services elsewhere following a finding that Banco Delta Asia SARL ("Banco Delta Asia") is a financial institution of "primary money laundering concern". Based on said Advisory Notice, Banco Delta Asia has provided financial services to North Korean Government Agencies and associated front companies that are known to have engaged in illicit activities. These North Korean entities are said to have engaged in currency counterfeiting, narcotics trafficking, production and dissemination of counterfeit cigarettes, and the laundering of related proceeds, as well as weapons of mass destruction and missile proliferation. ECSHAD Foregoing considered, you are hereby requested to report directly to the Anti-Money Laundering Council any transactions related to the DPRK and/or Banco Delta Asia SARL. For your information and guidance. (SGD.) NESTOR A. ESPENILLA, JR. Deputy Governor ANTI-MONEY LAUNDERING COUNCIL Resolution No. 01-06 The United States Department of Treasury issued an Advisory Notice to all U. S. financial institutions warning that the Democratic People's Republic of Korea (DPRK), acting through government agencies and associated front companies, is engaged in illicit activities and may be seeking banking services elsewhere following a finding that Banco Delta Asia SARL ("Banco Delta Asia") is a financial institution of "primary money laundering concern." Based on the Advisory Notice, Banco Delta Asia has provided financial services to North Korean Government Agencies and associated front companies that are known to have engaged in illicit activities. North Korean entities are known to have engaged in currency counterfeiting, narcotics trafficking, the production and dissemination of counterfeit cigarettes and the laundering of related proceeds, as well as weapons of mass destruction and missile proliferation. WHEREFORE, the Council resolves, as it hereby resolves, to require the Supervising Authorities, namely, the Bangko Sentral ng Pilipinas, the Securities and Exchange Commission and the Insurance Commission, to disseminate among all covered institutions under their respective jurisdictions a copy of the said Advisory Notice, for their information and guidance. DTESIA 16 January 2006, Manila, Philippines. (SGD.) AMANDO M. TETANGCO, JR. Chairman (Governor, Bangko Sentral ng Pilipinas) (SGD.) FE B. BARIN Member (Chairperson, Securities and Exchange Commission) (SGD.) EVANGELINE CRISOSTOMO-ESCOBILLO Member (Commissioner, Insurance Commission) Advisory Notice Department Of Treasury Financial Crimes Enforcement Network December 13, 2005 Guidance to Financial Institutions on the Provision of Banking Services to North Korean Government Agencies are Associated Front Companies Engaged in Illicit Activities : This advisory warns U.S. financial institutions that the U.S. Department of the Treasury has concerns that the Democratic People's Republic of Korea ("North Korea"), acting through government agencies and associated front companies, is engaged in illicit activities and may be seeking banking services elsewhere following the finding of Banco Delta Asia SARL to be a financial institution of "primary money laundering concern" pursuant to Section 311 of the USA PATRIOT Act. Accordingly, U.S. financial institutions should take reasonable steps to guard against the abuse of their financial services by North Korea, which may be seeking to establish new or exploit existing account relationships for the purpose of conducting illicit activities. This advisory is consistent with the U.S. Department of the Treasury's efforts to ensure that U.S. financial institutions are not used as a conduit for the laundering of proceeds from such illicit activities as currency counterfeiting, narcotics trafficking, counterfeit cigarette smuggling, and the financing of and involvement in WMD and missile proliferation. We encourage financial institutions worldwide to take similar precautions. The Department of the Treasury is actively monitoring this situation and will take any further action as appropriate. We will provide updated information to the financial industry as warranted. Financial institutions with questions about this advisory may contact the Financial Crimes Enforcement Network's regulatory helpline at 1-800-949-2732. For situations that may relate to potential terrorist activity, financial institutions are encouraged to call the Financial Crimes Enforcement Network's Hotline at 1-866-556-3974. Background Section 311 of the USA PATRIOT Act added Section 5318A to the Bank Secrecy Act, authorizing the Secretary of the Treasury to find a foreign financial institution, jurisdiction, class of transactions or type of account to be of "primary money laundering concern." Upon such finding and following a rulemaking process, the Secretary is authorized to take additional steps to further protect the U.S. financial system by requiring U.S. financial institutions to take certain "special measures" with respect to the specified entity. Such "special measures" can include requiring U.S. financial institutions to terminate all correspondent account relationships with the specified entity. In addition to protecting the U.S. financial system, Section 311 findings serve as a notice to the global financial community that a particular institution presents a serious money laundering and illicit financing risk. As published in the Federal Register on September 20, 2005, we found Banco Delta Asia SARL ("Banco Delta Asia") which is headquartered in the Macau Special Administrative Region of China, to be a financial institution of "primary money laundering concern." As stated in this Federal Register notice, Banco Delta Asia has provided financial services for over 20 years to North Korean Government agencies and associated front companies that are known to have engaged in illicit activities. DPRK entities are known to have engaged in currency counterfeiting, narcotics trafficking, the production and dissemination of counterfeit cigarettes, and the laundering of related proceeds, as well as weapons of mass destruction and missile proliferation. Investigations have also revealed that, among other things, Banco Delta Asia has serviced a multi-million dollar account on behalf of a known international drug trafficker. This finding and the accompanying proposal to prohibit U.S. financial institutions from maintaining correspondent accounts for or on behalf of Banco Delta Asia are aimed at protecting the U.S. financial system from ongoing illicit activity facilitated by Banco Delta Asia.