5 October 2001
To: Chief Executive of all authorized insurance institutions
carrying on long term business
Dear Sir/Madam,
United States Executive Order on Freezing Terrorist Assets
I refer to my letter of 27 September 2001 advising you, among other issues, that in case any significant legislation is enacted by the Philippines by 30 September 2001 to address the money laundering concerns identified by the Financial Action Task Force on Money Laundering (FATF), the application of the proposed further counter-measures against the Philippines as set out in the specific advisory attached to the above letter in respect of transactions with the Philippines would be suspended.
On 29 September 2001, the FATF received a joint letter from the Secretary of the Department of Finance and Governor of Central Bank of the Philippines, confirming that the President of the Philippines has signed into law "An Act Defining the Crime of Money Laundering Providing Penalties Therefore and for Other Purposes" (otherwise known as the "Anti-Money Laundering Act of 2001") on 29 September 2001. Pending an assessment by the FATF on whether the new law has addressed all the identified money laundering concerns,you are requested to suspend the application of the proposed counter-measures. A decision as to whether the Philippines should be subject to counter-measures will be made in January/February 2002 at the latest if not before. I will keep you informed of any further development on this subject.
Notwithstanding the suspension of the application of the proposed counter-measures, the Philippines is still included in the FATF's list of non-cooperative countries and territories (NCCTs). You are therefore advised to continue to give special attention to businesses and transactions with persons,including companies and financial institutions, in the Philippines, in accordance with Recommendation 21 of the FATF Forty Recommendations Note. Where applicable, the supplementary list of suspicious activity indicators attached to my letter of 27 September 2001 should be used to help identify suspicious transactions which are reportable to the Joint Financial Intelligence Unit (JFIU)for prompt investigation in order to ensure compliance with the Guidance Note on Prevention of Money Laundering issued by the Insurance Authority.
In addition, you should raise the awareness of your staff and the general public on NCCTs including the Philippines through various means which include, for example, (i) spreading more widely information on NCCTs to business relationships with the non-bank financial sector, business sector,intermediaries such as lawyers and accountants and so on where practicable; (ii)highlighting the subject of NCCTs in money laundering related forums or presentations where appropriate; (iii) drawing the attention of institutions' staff to the websites of the Narcotics Division of the Security Bureau, the JFIU and the financial regulators where the background and latest developments of NCCTs are published; and (iv) including the subject of NCCTs in staff training programmes in respect of money laundering.
Taking this opportunity, I also wish to draw your attention to the Executive Order on Freezing Terrorist Assets issued by the US President on 24 September 2001. The Order applies to financial assets of, and transactions with, 27 entities specified in the Order. Such entities are believed to be terrorist organizations, terrorist leaders, or to have links with such persons. The text of the Executive Order and the list of the 27 entities are available on the website of the Office of Foreign Assets Control under the US Treasury (www.ustreas.gov/ofac).
You are advised to review carefully the list of 27 entities attached to the Executive Order to check whether you have had, or currently have, accounts, transactions or dealings with such entities.
If suspicious accounts, transactions or dealings come to light, you should promptly notify the JFIU in order to ensure that you fulfil the obligationsunder section 25A of the Organized and Serious Crimes Ordinance in the usual way.
Should you have any enquiries in this regard, please contact Mr. William Hsieh at 2867 4529 or Ms. Carol Hui at 2867 2551.
Yours sincerely,
(Benjamin Tang)
Commissioner of Insurance
Note:
Recommendation 21 of the FATF Forty Recommendations states that "financial institutions should give special attention to business relations and transactions with persons, including companies and financial institutions, from countries which do not or insufficiently apply these Recommendations. Whenever these transactions have no apparent economic or visible lawful purpose, their background and purpose should, as far as possible, be examined, the findings established in writing, and be available to help supervisors, auditors and law enforcement agencies.".
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