NEWSFLASH

---

FOREIGN EXCHANGE FIRMS FINED

Manila, Aug. 28, 2000 - The Bangko Sentral ng Pilipinas (BSP) policy-making body has approved the imposition of a P30,000 penalty per transaction on the violations of about 20 foreign exchange corporations.

According to BSP sources, the forex corporations are affiliates of both local and foreign banks. They said some forex corporations reportedly had as much as 40 violations, while some had 30 and the others just one or three.

Thus, the penalties that could be imposed could range from a low of just P30,000 to a high of P1.2 million.

The forex corporations would also be issued a warning that if they are found to violate or engage in transactions which they are not authorized to engage in, they would receive more severe penalties that could include the suspension of their license for a period that could range from three months to one year, or the forex corporation or the bank’s officers could face suspension.

BSP Governor Rafael B. Buenaventura announced the decision of the Monetary Board to impose the penalties.

However, he did not reveal how many banks would be penalized or identify those which had violated the BSP’s forex reportorial rules and regulations.

There had been earlier reports that six to eight foreign banks and one local bank are being investigated for these violations.

However, following the BSP investigation, it turns out that the violations were not committed by the banks themselves but by their affiliate forex corporations.

Sources said the forex corporations were first time offenders and were thus meted the P30,000 per transaction penalty and a warning.

A second offense would result in a stronger reprimand and more severe penalties.

Sources said that the BSP would still review individually the response or defense of the forex corporations before finalizing the computation on the penalties to be imposed.

After the review has been completed the BSP would again submit the amount of penalties to be imposed to the Monetary Board for approval.

Some of the violations, Buenaventura said, had involved some omissions and failure to comply with reportorial requirements or a delay in the submission of reports.