Anti-Money Laundering Act

RA 9160 as amended by RA 9194, 10167, 10365 and 10927

1. Stages

a. Placement - At this stage, the launderer inserts dirty money into a

legitimate financial institution. This is the riskiest stage of the
laundering process because large amounts of cash are suspicious, and
banks are required to report high-value transactions.

b. Layering - Involves sending money through various financial

transactions to change its form and make it more difficult to follow.

c. Integration - At this stage, the money re-enters mainstream economy

in legitimate-looking form, appearing to have come from legitimate
transaction

2. Money Laundering

Money laundering is committed by any person who, knowing that any

monetary instrument or property represents, involves, or relates to the
proceeds of any unlawful activity:

a. transacts said monetary instrument or property;

b. converts, transfers, disposes of, moves, acquires, possesses or uses

said monetary instrument or property;

c. conceals or disguises the true nature, source, location, disposition,

movement or ownership of or rights with respect to said monetary
instrument or property;

d. attempts or conspires to commit money laundering offenses referred to

in paragraphs (a), (b) or (c);

e. aids, abets, assists in or counsels the commission of the money

laundering offenses referred to in paragraphs (a), (b) or (c) above; and

f. performs or fails to perform any act as a result of which he facilitates

the offense of money laundering referred to in paragraphs (a), (b) or (c)
above.

Money laundering is also committed by any covered person who,

knowing that a covered or suspicious transaction is required under this
Act to be reported to the Anti-Money Laundering Council (AMLC), fails
to do so.
3. Unlawful Activities

(1) Kidnapping for ransom under Article 267 of Act No. 3815, otherwise
known as the Revised Penal Code, as amended;

(2) Sections 4, 5, 6, 8, 9, 10, 11, 12, 13, 14, 15 and 16 of Republic Act No.
9165, otherwise known as the Comprehensive Dangerous Drugs Act of
2002;

(3) Section 3 paragraphs B, C, E, G, H and I of Republic Act No. 3019, as

amended, otherwise known as the Anti-Graft and Corrupt Practices
Act;

(4) Plunder under Republic Act No. 7080, as amended;

(5) Robbery and extortion under Articles 294, 295, 296, 299, 300, 301 and
302 of the Revised Penal Code, as amended;

(6) Jueteng and Masiao punished as illegal gambling under Presidential

Decree No. 1602;

(7) Piracy on the high seas under the Revised Penal Code, as amended and
Presidential Decree No. 532;

(8) Qualified theft under Article 310 of the Revised Penal Code, as
amended;

(9) Swindling under Article 315 and Other Forms of Swindling under
Article 316 of the Revised Penal Code, as amended;

(10)Smuggling under Republic Act Nos. 455 and 1937;

(11)Violationsof Republic Act No. 8792, otherwise known as the Electronic

Commerce Act of 2000;

(12)Hijacking and other violations under Republic Act No. 6235; destructive
arson and murder, as defined under the Revised Penal Code, as
amended;

(13)Terrorism and conspiracy to commit terrorism as defined and penalized

under Sections 3 and 4 of Republic Act No. 9372;

(14)Financing of terrorism under Section 4 and offenses punishable under

Sections 5, 6, 7 and 8 of Republic Act No. 10168, otherwise known as
the Terrorism Financing Prevention and Suppression Act of 2012:
(15)Briberyunder Articles 210, 211 and 211-A of the Revised Penal Code,
as amended, and Corruption of Public Officers under Article 212 of the
Revised Penal Code, as amended;

(16)Frauds
and Illegal Exactions and Transactions under Articles 213, 214,
215 and 216 of the Revised Penal Code, as amended;

(17)Malversation of Public Funds and Property under Articles 217 and 222
of the Revised Penal Code, as amended;

(18)Forgeries
and Counterfeiting under Articles 163, 166, 167, 168, 169
and 176 of the Revised Penal Code, as amended;

(19)Violations
of Sections 4 to 6 of Republic Act No. 9208, otherwise known
as the Anti-Trafficking in Persons Act of 2003;

(20)Violations
of Sections 78 to 79 of Chapter IV, of Presidential Decree No.
705, otherwise known as the Revised Forestry Code of the Philippines,
as amended;

(21)Violations
of Sections 86 to 106 of Chapter VI, of Republic Act No. 8550,
otherwise known as the Philippine Fisheries Code of 1998;

(22)Violations
of Sections 101 to 107, and 110 of Republic Act No. 7942,
otherwise known as the Philippine Mining Act of 1995;

(23)Violations
of Section 27(c), (e), (f), (g) and (i), of Republic Act No. 9147,
otherwise known as the Wildlife Resources Conservation and Protection
Act;

(24)Violation
of Section 7(b) of Republic Act No. 9072, otherwise known as
the National Caves and Cave Resources Management Protection Act;

(25)Violation
of Republic Act No. 6539, otherwise known as the Anti-
Carnapping Act of 2002, as amended;

(26)Violationsof Sections 1, 3 and 5 of Presidential Decree No. 1866, as

amended, otherwise known as the decree Codifying the Laws on
Illegal/Unlawful Possession, Manufacture, Dealing In, Acquisition or
Disposition of Firearms, Ammunition or Explosives;

(27)Violation
of Presidential Decree No. 1612, otherwise known as the Anti-
Fencing Law;
 (28)Violation
of Section 6 of Republic Act No. 8042, otherwise known as the
Migrant Workers and Overseas Filipinos Act of 1995, as amended by
Republic Act No. 10022;

(29)Violation
of Republic Act No. 8293, otherwise known as the Intellectual
Property Code of the Philippines;

(30)Violation
of Section 4 of Republic Act No. 9995, otherwise known as the
Anti-Photo and Video Voyeurism Act of 2009;

(31)Violation
of Section 4 of Republic Act No. 9775, otherwise known as the
Anti-Child Pornography Act of 2009;

(32)Violations
of Sections 5, 7, 8, 9, 10(c), (d) and (e), 11, 12 and 14 of
Republic Act No. 7610, otherwise known as the Special Protection of
Children Against Abuse, Exploitation and Discrimination;

(33)Fraudulentpractices and other violations under Republic Act No. 8799,

otherwise known as the Securities Regulation Code of 2000; and

(34)Feloniesor offenses of a similar nature that are punishable under the

penal laws of other countries.”

4. Covered Persons

Covered persons’, natural or juridical, refer to:

a. banks, non-banks, quasi-banks, trust entities, foreign exchange

dealers, pawnshops, money changers, remittance and transfer
companies and other similar entities and all other persons and their
subsidiaries and affiliates supervised or regulated by the Bangko
Sentral ng Pilipinas (BSP);

b. insurance companies, pre-need companies and all other persons

supervised or regulated by the Insurance Commission (IC);

c. securities dealers, brokers, salesmen, investment houses and other

similar persons managing securities or rendering services as
investment agent, advisor, or consultant, (ii) mutual funds, close-end
investment companies, common trust funds, and other similar
persons, and (iii) other entities administering or otherwise dealing in
currency, commodities or financial derivatives based thereon, valuable
objects, cash substitutes and other similar monetary instruments or
property supervised or regulated by the Securities and Exchange
Commission (SEC);
 d. jewelry dealers in precious metals, who, as a business, trade in
precious metals, for transactions in excess of One million pesos
(P1,000,000.00);

e. jewelry dealers in precious stones, who, as a business, trade in precious

stones, for transactions in excess of One million pesos (P1,000,000.00);

f. company service providers which, as a business, provide any of the

following services to third parties: (i) acting as a formation agent of
juridical persons; (ii) acting as (or arranging for another person to act
as) a director or corporate secretary of a company, a partner of a
partnership, or a similar position in relation to other juridical persons;
(iii) providing a registered office, business address or accommodation,
correspondence or administrative address for a company, a partnership
or any other legal person or arrangement; and (iv) acting as (or
arranging for another person to act as) a nominee shareholder for
another person; and

g. persons who provide any of the following services:

(1) managing of client money, securities or other assets;

(2) management of bank, savings or securities accounts;
(3) organization of contributions for the creation, operation or
management of companies; and
(4) creation, operation or management of juridical persons or
arrangements, and buying and selling business entities.

h. Casinos including internet and ship based casinos, with respect to their
casino cash transactions related to their gaming operations.

Notwithstanding the foregoing, the term ‘covered persons’ shall exclude

lawyers and accountants acting as independent legal professionals in
relation to information concerning their clients or where disclosure of
information would compromise client confidences or the attorney-client
relationship: Provided, That these lawyers and accountants are
authorized to practice in the Philippines and shall continue to be
subject to the provisions of their respective codes of conduct and/or
professional responsibility or any of its amendments.

5. Obligations of Covered Persons

a. Customer identification: Covered institutions shall establish and

record the true identity of its clients based on official documents.
b. Record keeping: All records of all transactions of covered institutions
shall be maintained and safely stored for 5 years from the date of
transactions.
 c. Covered persons shall report to the AMLC all covered transactions
and suspicious transactions within five (5) working days from
occurrence thereof, unless the AMLC prescribes a different period not
exceeding fifteen (15) working days.

Lawyers and accountants acting as independent legal professionals are

not required to report covered and suspicious transactions if the
relevant information was obtained in circumstances where they are
subject to professional secrecy or legal professional privilege.

Remember:

When reporting, it shall not be considered a violation of bank secrecy

laws and similar laws.

No administrative, criminal, or civil proceedings, shall lie against any

person for having made a transaction report in the regular performance
of his duties and in good faith, whether or not such results in any
criminal prosecution under Philippine laws. (Safe Harbor Provision)

6. COVERED TRANSACTION:

a. a transaction in cash or other equivalent monetary instrument

involving a total amount in excess of P500, 000 within one banking
day.
b. For jewelry dealers in precious metals, who, as a business, trade in
precious metals, for transactions in excess of One million pesos
(P1,000,000.00);
c. For jewelry dealers in precious stones, who, as a business, trade in
precious stones, for transactions in excess of One million pesos
(P1,000,000.00
d. For casino, a single casino transaction involving an amount in excess
of Five million pesos (₱5,000,000.00) or its equivalent in any other
currency.

7. SUSPICIOUS TRANSACTIONS: a transaction with covered institutions,

regardless of the amount involved, where any of the following
circumstances exist:

a. There is no underlying legal or trade obligation, purpose or economic

justification.

b. The client is not properly identified.

c. The amount involved is not commensurate with the business or

financial capacity of the client.
 d. Taking into account all known circumstances, it may be perceived that
the client’s transaction is structured in order to avoid being the subject
of reporting requirements under the Act.

e. Any circumstances relating to the transaction which is observed to

deviate from the profile of the client and/or the client’s past
transactions with the covered institution.
f. The transaction is in any way related to an unlawful activity or offense
under this Act that is about to be, is being or has been committed.

g. Any transaction that is similar or analogous to any of the foregoing.

8. The Anti-Money Laundering Council (AMLC) was created pursuant to

Republic Act No. 9160, otherwise known as the “Anti-Money Laundering
Act of 2001” (AMLA), to protect the integrity and confidentiality of bank
accounts and to ensure that the Philippines shall not be used as a money
laundering site for the proceeds of any unlawful activity.

The AMLC is the Philippines’ Financial Intelligence Unit (FIU) tasked to

implement the AMLA, as amended by Republic Act Nos. 9194, 10167, and
10365, as well Republic Act No. 10168, otherwise known as the “Terrorism
Financing Prevention and Suppression Act of 2012”.

The AMLC is composed of the Governor of the Bangko Sentral ng Pilipinas

as Chairman, and the Commissioner of the Insurance Commission and
the Chairman of the Securities and Exchange Commission as members. It
acts unanimously in the discharge of its functions.

The AMLC is assisted by a Secretariat headed by an Executive Director.

Authority to Inquire into Bank Deposits

Notwithstanding the provisions of Republic Act No. 1405, as amended;

Republic Act No. 6426, as amended; Republic Act No. 8791; and other
laws, the AMLC may inquire into or examine any particular deposit or
investment, including related accounts, with any banking institution or
non-bank financial institution upon order of any competent court based
on an ex parte application in cases of violations of this Act, when it has
been established that there is probable cause that the deposits or
investments, including related accounts involved, are related to an
unlawful activity as defined in Section 3(i) hereof or a money laundering
offense under Section 4 hereof; except that no court order shall be required
in cases involving activities defined in Section 3(i)(1), (2), and (12) hereof,
and felonies or offenses of a nature similar to those mentioned in Section
3(i)(1), (2), and (12), which are Punishable under the penal laws of other
countries, and terrorism and conspiracy to commit terrorism as defined
and penalized under Republic Act No. 9372.”

The Court of Appeals shall act on the application to inquire into or examine
any deposit or investment with any banking institution or non-bank
financial institution within twenty-four (24) hours from filing of the
application.”

Freezing of Monetary Instrument or Property

Freezing of Monetary Instrument or Property. - Upon a verified ex parte

petition by the AMLC and after determination that probable cause exists
that any monetary instrument or property is in any way related to an
unlawful activity as defined in Section 3(i) hereof, the Court of Appeals
may issue a freeze order which shall be effective immediately, for a period
of twenty (20) days. Within the twenty (20)-day period, the Court of Appeals
shall conduct a summary hearing, with notice to the parties, to determine
whether or not to modify or lift the freeze order, or extend its effectivity.
The total period of the freeze order issued by the Cout of Appeals under
this provision shall not exceed six (6) months. This is without prejudice to
an asset preservation order that the Regional Trial Court having
jurisdiction over the appropriate anti-money laundering case or civil
forfeiture case may issue on the same account depending upon the
circumstances of the case, where the Court of Appeals will remand the
case and its records: Provided, That if there is no case filed against a
person whose account has been frozen within the period determined by
the Court of Appeals, not exceeding six (6) months, the freeze order shall
be seemed ipso facto lifted: Provided, further, That this new rule shall not
apply to pending cases in the courts. In any case, the court should act on
the petition to freeze within twenty-four (24) hours from filing of the
petition. If the application is filed a day before a no working day, the
computation of the twenty-four (24)-hour period shall exclude the
nonworking days.

"The freeze order or asset preservation order issued under this Act shall
be limited only to the amount of cash or monetary instrument or value of
property that the court finds there is probable cause to be considered as
proceeds of a predicate offense, and the freeze order or asset preservation
order shall not apply to amounts in the same account in excess of the
amount or value of the proceeds of the predicate offense.