BSP restores penalties for delayed FX reports

The Bangko Sentral ng Pilipinas (BSP) is reinstating the imposition of monetary penalties on delayed submission of foreign exchange (FX) transaction reports by banks and FX companies. The waiver of penalties is part of the BSP pandemic-related relief measure. The reprieve was extended several times since it was first implemented on March 27, 2020 after the global Covid-19 crisis was declared. In a memo (BSP Memorandum No. M-2023-021), BSP Deputy Governor Francisco G. Dakila Jr. said the waiver of monetary penalties for delayes incurred in the submission of reports to the BSP International Operations Department (BSP-IOD) is effective only until June 30, 2023. “All AABs/AAB (authorized agent banks) forex (foreign exchange) corps are hereby advised that delays incurred in the submission to the BSP-IOD of reports due after 30 June 2023 shall be subject to the applicable fines,” said Dakila in the memo. He also reminded AABs and AAB FX corps to ensure the “correctness, completeness, and accuracy of reports” submitted to the BSP-IOD. The BSP implemented the waiver as part of relief measures that could help banks and FX corporations to facilitate access to FX resources to finance legitimate transactions, especially during period of lockdowns between 2020 and 2021. Since 2020, the BSP approved FX-related relief measures that include the electronic submission of documents for applications and registration of foreign currency loans, foreign borrowings and investments and the sale of FX by authorized AABs and AAB FX companies as well as the use of e-signatures or digital signatures for documents originally required to be submitted in hardcopy or requiring signature. Other relief measures were: submission of documents without the e signatures/digital signatures/required notarizations; relaxation of deadline/prescriptive period for the submission of certain documents/information/applications covering foreign/foreign currency loans/borrowings/investments; waiver of applicable processing fees for applications covering private sector foreign/foreign currency loans/borrowings with FX obligations due; and issuance of BSP documents by the IOD in electronic form. Some of these relief measures have been removed since the easing of pandemic restrictions while some are now permanent policy. Last April, the BSP announced new amendments to FX rules and to adopt pandemic-related relief measures as permanent policy under Circular No. 1080 first issued in 2020. The BSP said the amendments “are in line with the BSP’s thrust to further streamline procedures and documentary requirements for FX transactions.” The major amendments include the adoption as a permanent policy of the following: issuance in electronic form of BSP-IOD documents; electronic submission of BSP-IOD issued documents to AABs and AAB FX firms; electronic submission of BSP-IOD application forms without the required electronic/digital signatures; lifting of the notarization requirement for certain supporting documents for trade and non-trade current account transactions, and foreign investments; and the lifting of the applicable processing fee in relation to non-compliance with prescriptive period for submission to BSP-IOD of applications/requests for various FX transactions. Meanwhile, documents issued by the BSP-IOD in electronic form from March 27, 2020 such as BSP letter-approval will remain valid even after the period covered by Circular No. 1080, said the BSP. “Hence, the BSP shall no longer issue original hardcopies to replace said BSP documents,” it added.