MORNBFI Vol. 1 - Planters Development Bank

§§ 4806Q.2.n. - 4806Q.3.a11.12.31§ 4806Q.2.n. Shell company/shell bankA covered institution shall undertakebanking relationship with a shellcompany with extreme caution andalways apply enhanced due diligence onboth the entity and its beneficial owner/s.Because of the dubious nature of shellbanks, no shell bank shall be allowed tooperate or be established in thePhilippines. A covered institution shallrefuse to enter into, or continue,correspondent banking relationship withthem. It shall likewise guard againstestablishing relations with foreign FIs thatpermit their accounts to be used by shellbanks.(Circular No. 706 dated 05 January 2011)§ 4806Q.2.o. Numbered accountsNo peso and foreign currencynon-checking numbered accounts shall beallowed without establishing the true andfull identity and existence of customersand applying enhanced due diligence inaccordance with Subsec. 4806Q.1.b.Peso and foreign currencynon-checking numbered accounts existingprior to 17 October 2001 shall continueto exist but the covered institution shallestablish the true and full identity andexistence of the beneficial owners of suchaccounts and applying enhanced duediligence in accordance with Subsec.4806Q.1.b.(Circular No. 706 dated 05 January 2011)§ 4806Q.2.p. Prohibited accountsA covered institution shall maintainaccounts only in the true and full name ofthe account owner. The provisionsof existing law to the contrarynotwithstanding, anonymous accounts,accounts under fictitious names,numbered checking accounts, and allother similar accounts shall be absolutelyprohibited.(Circular No. 706 dated 05 January 2011)§ 4806Q.3 On-going monitoring ofcustomers, accounts and transactionsCovered institutions shall ensure that theyhave established the true and full identityof their customers and shall update allidentification information and documentsrequired to be obtained by the AMLA, asamended, its RIRR and this Part ofexisting customers on the basis ofmateriality and risk.With respect to monitoring oftransactions, in order that a coveredinstitution may be able to control andreduce risk associated with moneylaundering and terrorist financing, it isnecessary that it has a system that willenable it to understand the normal andreasonable account activity of customersand detect unusual or suspicious patternsof account activity. Thus, a risk-andmateriality-basedon-going monitoring ofcustomer’s accounts and transactions shouldbe part of a covered institution’s customerdue diligence.(Circular No. 706 dated 05 January 2011)§ 4806Q.3.a. Enhance due diligenceCovered institutions shall apply enhanceddue diligence on its customer inaccordance with Subsec. 4806Q.1.b. if itacquires information in the course of itscustomer account or transactionmonitoring that:1. Raises doubt as to the accuracy of anyinformation or document provided or theownership of the entity;2. Justifies re-classification of thecustomer from low or normal risk tohigh-risk pursuant to these rules or by itsown criteria; or3. Any of the circumstance for thefiling of a suspicious transaction exists suchas but not limited to the following:a. Transacting without any underlyinglegal or trade obligation, purpose oreconomic justification;Manual of Regulations for Non-Bank Financial InstitutionsQ RegulationsPart VIII - Page 19