Source Document
Manual of Regulations for Banks
BSP.MORB.2023.Sec941.a(2).p38.OBL1
Manual of Regulations for Banks > 941 SANCTIONS AND PENALTIES > Monetary penalty guidelines > (2)
Obligation Summary
Violations that have been existing for a long time before they were revealed/discovered in the examination or are under the evaluation for a long time due to pending requests or correspondences from covered institutions on whether a violation has actually occurred shall be dealt with through this criterion.
MORB, Sec. 941.a(2), p. 38 (2023 ed.) · Manual of Regulations for Banks · p. 38
(a) Deficient Know Your Customer process (b) Unsatisfactory Covered Transaction reporting system (c) Non-reporting of and Improper Suspicious Transaction reporting (d) Non-compliance with the Record keeping requirement (e) Inadequate AML Training Program (f) Deficient AML Electronic system
(2) Duration of violations prior to notification - This pertains to the length of time prior to the latest notification on the violation. Violations that have been existing for a long time before they were revealed/discovered in the examination or are under the evaluation for a long time due to pending requests or correspondences from covered institutions on whether a violation has actually occurred shall be dealt with through this criterion. Violations outstanding for more than one (1) year prior to notification, at the minimum, will qualify as violations outstanding for a long time.
(3) Continuation of offense or omission after notification - This pertains to the persistence of an act or omission after the latest notification on the existence of the violation, either from the appropriate department of the Bangko Sentral or from the Monetary Board and/or Deputy Governor, in cases where the violation has been elevated accordingly. This covers the period after the final notification of the existence of the violation until such time that the violation has been corrected and/or remedied. The corrective action shall be reckoned with from the date of notification.
ProfytAI Regulatory Intelligence
Type: requirementViolations that took a long time to surface, or that remain under evaluation because of pending correspondence with the covered institution, are assessed under this specific penalty-guideline criterion.
Relationship
Item (2) in the numbered list of factors for monetary penalties. It comes after item (1) on the frequency of violations and before the later items on corrective-action timing and choosing from the penalty matrix.
Why This Exists
Ensures violations that took a long time to detect or resolve are scored under the correct penalty factor, so the monetary-penalty determination accounts for their prolonged, undetected nature.
Implementation Considerations
Typically involves examiners noting the elapsed time between a violation's occurrence and its discovery or resolution when scoring it against this factor.
Interpretation Note · "This criterion" refers back to the frequency-of-violation factor in item (1). The rule folds two scenarios into that one criterion. One is a violation that went undiscovered for a long time. The other is a violation still under evaluation because correspondence with the institution is pending.
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Reproduced from the Bangko Sentral ng Pilipinas Manual of Regulations for Banks, retrieved from bsp.gov.ph. Highlighting and the verification stamp were added by ProfytAI. The underlying text is unaltered. This document is freely available from the BSP website.