Capacity Building Learning Module

Anti-Money Laundering/Counter-Terrorism
Financing (AML/CTF) Webinar for Covered Persons

Fundamentals of Money Laundering and Terrorism Financing

and Preventive Measures and Overview of Risk Management
System

CBCS Session XX (18022021) V1

 Discussion Points

1. What is money laundering and how is it committed?

2. Why do criminals need to launder proceeds of crime?
3. How may Covered Persons be abused for ML/TF?
4. How can we detect and prevent money launderers?
What are the preventive measures?
Money Laundering Defined

Money a) Transacts said monetary instrument or property;

b) Converts, transfers, disposes of, moves, acquires,
Laundering 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
is committed by any person respect to said monetary instrument or property;
who, knowing that any d) Attempts or conspires to commit money laundering
monetary instrument or offenses referred to in paragraphs (a), (b) or (c);
property represents, involves, e) Aids, abets, assists in or counsels the commission of the
or relates to the proceeds of money laundering offenses referred to in paragraphs (a),
(b) or (c) above; and
any unlawful activity:
f) Performs or fails to perform any act as a result of which he
(Sec. 4, AMLA, as amended) facilitates the offenses of money laundering referred to in
paragraphs (a), (b) or (c) above.

www.amlc.gov.ph | [email protected]
Money Laundering Defined

Money
Laundering Money laundering is also committed by any
– covered person who, knowing that a
covered or suspicious transaction is
is committed by any person
required under this Act to be reported to
who, knowing that any
the Anti-Money Laundering Council
monetary instrument or
(AMLC), fails to do so.
property represents, involves,
or relates to the proceeds of
any unlawful activity:
(Sec. 4, AMLA, as amended)

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Elements of Money Laundering

Unlawful Activity Dirty Money

Must be related to any of Should always be the
the 36 enumerated related to the proceeds of
predicate offenses under an unlawful activity
the AMLA, as amended

Money Laundering
Circumstances Knowledge
related to ML If there is no knowledge,
there is only civil liability
Usually related to the
grounds for CTR/STR

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 Simple Money Laundering Scenario
Predicate Offense (Unlawful Activity)
Jack
kidnapped
the Criminal Proceeds (Monetary Instrument/Property)
daughter
of Jill Jack
demanded
and received
Php5 Million
as ransom
money Jack remitted ML Act
the money in
smaller parts
to his cohorts

Knowledge that the MI/P represents, involves, or relates to the proceeds

of the unlawful activity
6
Why do criminals need
to launder money?
Article 45, Revised Penal Code of the
Philippines

“…proceeds and instruments or tools (for

the commission of a felony or crime) shall
be confiscated and forfeited in favor of
the Government,…”

7
Stages of Money Laundering

Placement Layering Integration

The physical disposal of cash or The separation of illicit Supplying apparent legitimacy
other assets derived from proceeds from their source by to illicit wealth through the
criminal activity. During this layers of financial transactions reentry of the funds into the
phase, the money launderer intended to conceal the origin economy in what appears to
introduces the illicit proceeds of the proceeds. This second be normal business or personal
into the financial system. stage involves converting the transactions. This stage entails
Often, this is accomplished by proceeds of the crime into using laundered proceeds in
placing the funds into another form and creating seemingly normal transactions
circulation through formal complex layers of financial to create the perception of
financial institutions, casinos transactions to obfuscate the legitimacy. The launderer, for
and other legitimate source and ownership of funds. instance, might choose to
businesses, both domestic and invest the funds in real estate,
international. financial ventures or luxury
assets.

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Common Methods of Money Laundering
Structuring and Smurfing

Bulk Cash Smuggling

Cash-intensive Businesses

Shell or Shell Corporations

Credit Card Laundering

Gambling in Casinos

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What about Terrorist Financing?

10
Terrorism Financing Defined

Committed by any person

who directly, or indirectly, willfully and without lawful excuse, possesses, provides,
collects or uses property or funds or makes available property, funds or financial
service or other related services, by any means
with the unlawful and willful intention that they should be used or with the
knowledge that they are to be used, in full or in part
Section 4,
R.A. No. 10168 (a) to carry out or facilitate the commission of any terrorist act;
(TFPSA of 2012)

(b) by a terrorist organization, association or group; or

(c) by an individual terrorist

www.amlc.gov.ph | [email protected]
Terrorism Financing Defined

Committed by any person

Section 4,
TFPSA of 2012

who organizes or directs others to commit financing of terrorism under the

immediately preceding paragraph (of Section 4)

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Terrorist Financing –
Differences and Similarities Between Terrorist Financing
and Money Laundering
Money Laundering Terrorism Financing
Definition The process of making large amounts of money generated by The financial support, in any
a criminal activity, such as drug trafficking or terrorist form, of terrorism or of those
funding, appear to have come from a legitimate source who encourage, plan, or
✓ Placement engage in terrorism
✓ Layering
✓ Integration
Objective To avoid detection To avoid detection
Motivation Lifestyle Politics, religion, ideology
Amount of Usually large amounts Does not usually involve large
funds amounts
Sources of Criminal activities Criminal activities and
funds legitimate sources
Uses of funds To gain wealth and assets To execute terrorist activities

www.amlc.gov.ph | [email protected]
Terrorist Financing –
How Terrorists Raise, Move and Store Funds
Use of Hawala and Other Informal Value Transfer Systems
Legal sources Breakdown of Funding
• Fundraising
• Funds through donors 10% on operations
• Family businesses 90% on organizational infrastructure
Illegal sources (recruitment, communications, training,
• Purchasing/providing goods or procurement, travel and transportation,
services for terrorism acts facilities, support networks, protection,
• Procuring restricted fundraising schemes)
materials/goods
• Funding from other terrorist groups
• Committing criminal acts

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Financial Action Task Force (FATF)

The Financial Action Task Force (FATF) is an independent inter-

governmental body that develops and promotes policies to
protect the global financial system against money laundering,
terrorist financing and the financing of proliferation of weapons
of mass destruction.

The FATF Recommendations are recognized as the global anti-

money laundering (AML) and counter-terrorist financing (CFT)
standard.

www.amlc.gov.ph | [email protected]
Financial Action Task Force (FATF)

In its Forty (40) Recommendations, the Financial Action Task

Force (FATF) requires countries to identify, assess, and
understand ML/TF risks, and to take action in mitigating those
risks. FATF, an international standard-setting body, develops
and promotes policies to protect the global financial system
against money laundering, terrorist financing, and the financing
of proliferation of weapons of mass destruction. The 40 FATF
Recommendations set out a comprehensive framework of
measures which countries should then implement.

www.amlc.gov.ph | [email protected]
Financial Action Task Force (FATF) –
Non-Cooperative Countries and Territories
Since its inception, FATF has had a The NCCT list was replaced by a new process
practice of “naming and shaming” when FATF started identifying jurisdictions
countries that it determines maintain with deficiencies in their AML/CFT regimes.
inadequate anti-money laundering This new FATF process was in response to the
controls or are not cooperating in the G-20 countries’ efforts to publicly identify
global AML/ CFT efforts. For years, high-risk jurisdictions and to issue regular
FATF was engaged in an initiative to updates on jurisdictions with strategic
identify non-cooperative countries deficiencies. Today, FATF identifies these
and territories (NCCTs) in the global jurisdictions in two public documents issued
fight against money laundering. It three times a year.
developed a process to seek out
critical weaknesses in specific 1. FATF’s Public Statement
jurisdictions’ anti-money laundering 2. Improving Global AML/CFT Compliance:
systems that obstruct international Ongoing Process
cooperation in this area.

www.amlc.gov.ph | [email protected]
Evolution of the Anti-Money Laundering Act (AMLA)

17 Oct 2001 23 Mar 2003 06 Jul 2012

RA 9160 RA 9194 RA 10167

Only threshold reporting, AMLC’s Freezing power given to courts, Ex-parte petitions
executive freeze STR now required

29 Jan 2021 29 Jul 2017 07 Mar 2013

RA 11521 RA 10927 RA 10365

Inclusion of OGOs, Real Estate Inclusion of casinos (internet and Expanded Covered Persons (CPs),
Developer and Brokers. Inclusion ship-based); single casino cash additional predicate crimes
of tax crimes as a predicate transaction in excess of Php5
offense million

www.amlc.gov.ph | [email protected]
Amendments under RA 11521

SEC. 2. Declaration of Policy. – It is hereby declared the policy of

the State to protect and preserve 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.
Consistent with its foreign policy, the State shall extend cooperation
in transnational investigations and prosecutions of persons involved
in money laundering activities wherever committed, as well as in the
implementation of targeted financial sanctions related to the
financing of the proliferation of weapons of mass destruction
terrorism, and financing of terrorism, pursuant to the resolutions
of the United Nations Council.

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Amendments under RA 11521

SEC. 3. Definitions. – For purposes of this Act, the following terms are
hereby defined as follows:

(a) “Covered Persons”, natural or juridical, refer to:

9) Real estate developers and brokers; and

10) Offshore gaming operators, as well as their service providers,

supervised, accredited or regulated by the Philippine
Amusement and Gaming Corporation (PAGCOR) or any
government agency.

www.amlc.gov.ph | [email protected]
Amendments under RA 11521

Real Estate Developer Real Estate Broker

refers to any natural or juridical person refers to a duly registered and licensed natural
engaged in the business of developing real person who, for a professional fee,
estate development project for the account of commission or other valuable consideration,
the developer and offering them for sale or acts as an agent of a party in a real estate
lease. transaction to offer, advertise, solicit, list,
promote, mediate, negotiate or effect the
meeting of the minds on the sale, purchase,
exchange, mortgage, lease or joint venture or
other similar transactions on real estate of any
interest therein.

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Amendments under RA 11521
(i) “Unlawful activity” refers to any act or omission or series or combination thereof involving or having
relation to the following:

(34) Violation of Section 19 (a)(3) of Republic Act No. 10697, otherwise known as the “Strategic Trade
Management Act”, in relation to the proliferation of weapons of mass destruction and its
financing pursuant to United Nations Security Council Resolution Numbers 1718 of 2006 and
2231 of 2015;

(35) Violation of Section 254 of Chapter II, Title X of the National Internal Revenue Code of 1997, as
amended, where the deficiency basic tax due in the final assessment is in excess of Twenty-five
million pesos (P25,000,000.00) per taxable year, for each tax type covered and there has been
a finding of probable cause by the competent authority: Provided, further That there must be a
finding of fraud, willful misrepresentation or malicious intent on the part of the taxpayer:
Provided, finally, That in no case shall the AMLC institute forfeiture proceedings to recover
monetary instruments, property or proceeds representing, involving, or relating to a tax crime, if
the same has already been recovered or collected by the Bureau of Internal Revenue (BIR) in a
separate proceeding;

www.amlc.gov.ph | [email protected]
The Anti-Money Laundering Council (AMLC)
VISION
To be a world-class financial intelligence unit that will help establish and
maintain an internationally compliant and effective anti-money laundering
regime which will provide the Filipino people with a sound, dynamic, and strong
financial system in an environment conducive to the promotion of social justice,
political stability, and sustainable economic growth. Towards this goal, the AMLC
shall, without fear or favor, investigate and cause the prosecution of money
laundering offenses.

MISSION
• To protect and preserve the integrity and confidentiality of bank accounts
• To ensure that the Philippines shall not be used as a money laundering site
for proceeds of any unlawful activity
• To extend cooperation in transnational investigation and prosecution of
persons involved in money laundering activities, wherever committed

www.amlc.gov.ph | [email protected]
The Anti-Money Laundering Council (AMLC)

GOVERNOR
ELI M. REMOLONA, JR.
Chairman

CHAIRMAN
EMILIO B. AQUINO
Member

COMMISSIONER
REYNALDO A. REGALADO
Member

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The Anti-Money Laundering Council (AMLC) Secretariat
Office of the
Executive Director
In organizing the Secretariat,
Commitments and Policy
Group
Enterprise Security
Staff
the Council shall appoint from
those who have served,
Administrative, Financial, Counseling and Legal continuously or cumulatively,
and IT Services Group Assistance Staff
for, at least, five (5) years
Detection and Prevention Investigation and either in the BSP, the SEC or
Department Enforcement Department the IC.
Data Collection and Adjudication and
Quality Staff Enforcement Staff All members of the Secretariat
shall be considered full-time,
Compliance and Litigation and Evaluation
Supervision Group Group permanent employees of the
Financial Intelligence and Financial Crimes
BSP.
Analysis Group Investigation Group I

Financial Crimes
Investigation Group II

www.amlc.gov.ph | [email protected]
 Covered Persons

(a) Banks; (a) Insurance companies; (a) Securities dealers, brokers, salesmen,
(b) Quasi-banks; (b) Pre-need companies; investment houses, and other similar persons
(c) Trust entities (c) Insurance agents; managing securities or rendering services,
(d) Pawnshops; (d) Insurance brokers; such as investment agents, advisors, or
(e) Non-stock savings and loan associations; (e) Professional reinsurers; consultants;
(f) Other Non-bank financial institutions (f) Reinsurance brokers;
which under special laws are subject to BSP (g) Holding companies; (b) mutual funds or open-end investment
supervision and/or regulation; (h) Holding company systems; companies, close-end investment companies
(g) Electronic money issuers; and (i) Mutual benefit associations; and or issuers, and other similar entities; and
(h) Foreign exchange dealers, money (j) All other persons and their subsidiaries
changers, and remittance and transfer and affiliates supervised or regulated by the (c) other entities, administering or otherwise
companies. IC. dealing in commodities, or financial
derivatives based thereon, valuable objects,
cash substitutes, and other similar monetary
instruments or properties, supervised or
regulated by the SEC.

www.amlc.gov.ph | [email protected]
Covered Persons - DNFBPs

Jewelry Dealers

Dealers in Precious Metals and Precious Stones

Trust and Company Service Providers

Lawyers, accountants, and other professionals

Casinos

Real Estate Brokers and Developers

Offshore Gaming Operators, as well as their Service Providers

www.amlc.gov.ph | [email protected]
WHAT MONEY LAUNDERERS ARE LOOKING FOR?

1. Anonymity 2. “Paperless 3. Non-reporting

Transaction” requirement

28
Preventive Measures (PH setting)

CUSTOMER DUE
DILIGENCE

RECORD-KEEPING

TRANSACTION
REPORTING

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Risk Management
R-O-C-S-T-R
Risk profiling/scoring
Ongoing monitoring of customers
CTR
STR
Training programs
Record-keeping

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 CUSTOMER DUE DILIGENCE (CDD)
“Know-Your-Customer”
CDD Measures [Section 2.1, Rule 18, 2018 IRR]

(a) Customer Identification Process (CIP)

(b) Customer Verification Process (CVP)
(c) Identification and Verification of Agents (IVA)
(d) Beneficial Ownership Verification (BOV)
(e) Determination of the Purpose of Relationship (DPR)
(f) Ongoing Monitoring Process (OMP)

Timing [Section 2.2, Rule 18, 2018 IRR]

May be conducted simultaneously, consecutively, or at such timing and
frequency as the covered person may determine to be appropriate,
depending on the risks involved.

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 Preventive Measures (PH setting)
Existing Customers [Section 1.3, Rule 18, 2018 IRR]

Apply CDD requirements to existing customers on the basis of

materiality and risk, taking into account whether and when CDD
measures have previously been undertaken and the adequacy of
information and document obtained.

Customer Acceptance Policies [Section 2.4, Rule 18, 2018 IRR]

• Have clear, written and graduated customer acceptance
policies that will seek to prevent suspicious individuals or
entities from transacting with, or establishing or maintaining
business relationship.

• Develop guidelines to assist their responsible officers in

assessing whether a customer’s profile warrants acceptance
or refusal of service to protect the security and integrity of
the business.

www.amlc.gov.ph | [email protected]
 Preventive Measures (PH setting)

CIP: To identify and record the true identity of their

customers. [Section 3, Rule 18, 2018 IRR]

First Time Transactions: [Section 3.2, Rule 18, 2018 IRR]

• First time customers shall be required to present the

original and submit a clear copy of, at least, one (1) ID.

• If the ID presented does not bear any photo of the

customer, or the photo-bearing ID or a copy thereof does
not clearly show the face of the customer, a covered
person may utilize ICT or any other technology to take
the photo of the customer.

www.amlc.gov.ph | [email protected]
Preventive Measures (PH setting)

Required Identification Information (Natural Persons)

(Section 3.4, Rule 18, 2018 IRR)

(1) Full name;

(2) Date of birth;
(3) Place of birth;
(4) Sex;
(5) Citizenship or nationality;
(6) Address;
(7) Contact number or information, if any; and
(8) Specimen signatures or biometric information.

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 Preventive Measures (PH setting)

“Identification Document” [Section 1(qq), Rule 2, 2018 IRR]

(1) For Filipino citizens: (a) PhilID; (b) other IDs issued by the government; and (c) other IDs that can be
verified using reliable, independent source documents, data or information.

(2) For foreign nationals: (a) PhilID, for resident aliens; (b) Passport; (c) Alien Certificate of Registration;
and (d) other IDs issued by the government.

(3) For Filipino students: (a) PhilID; (b) School ID signed by the school principal or head of the educational
institution; and (c) Birth Certificate issued by the Philippine Statistics Authority; and

(4) For low risk customers: Any document or information reduced in writing which the covered person
deems sufficient to establish the client’s identity.

www.amlc.gov.ph | [email protected]
Preventive Measures (PH setting)

Required Identification Information Required Identification Documents

(Juridical Persons) (Juridical Persons)
(Section 3.4, Rule 18, 2018 IRR) (Section 3.4, Rule 18, 2018 IRR)

(1) Full name; (1) DTI/BSP/AMLC Certificates of

(2) Name of authorized Registration, or Certificate of
representative, transactor or signer; Incorporation or Partnership.
(3) Current office address; (2) Articles of
(4) Contact number or information, if Incorporation/Partnership;
any; (3) Registration Data Sheet/Latest
(5) Nature of business; and General Information Sheet;
(6) Specimen signatures or biometric (4) Secretary’s Certificate (Re: Signing
information of the authorized Authority); and
representative/transactor/signer. (5) For entities registered outside of
the Philippines, similar documents
and/or information

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 Preventive Measures (PH setting)

RISK-BASED APPROACH (RBA) TO CDD.

[Section 9.1, Rule 18, 2018 IRR]

• In conducting CDD, a risk-based approach shall

be undertaken.

• To assess customers to determine who are likely

to pose low, normal, or high risk

• To set the standards in applying RDD, ADD, and

EDD, including a set of conditions for
continuance or discontinuance of service, or
business relationship.

www.amlc.gov.ph | [email protected]
 Preventive Measures (PH setting)
Politically-Exposed Persons (PEPs)
• An individual who is or has been entrusted with prominent public position in (a) the Philippines with
substantial authority over policy, operations or the use or allocation of government-owned resources;
(b) a foreign State; or (c) an international organization. [Section 1(xxx), Rule 2, 2018 IRR]

• Covered persons shall establish and record the true and full identity of PEPs, as well as their immediate
family members and close relationships /associates. [Section 1, Rule 19, 2018 IRR]

“Not all PEPs are high risk.”

www.amlc.gov.ph | [email protected]
Warning!
Do Not Deal with a Designated Person or Entity
(liable for criminal prosecution under Section 8 of the
Terrorism Financing Suppression and Prevention Act)

39
Sanctions Freeze Orders (SFO) Pursuant to ATC Designations
Step 1 - Designation by the Anti-Terrorism Council (ATC)
Legal Basis (Anti-Terrorism Act or ATA)

SEC. 25. Designation of Terrorist Individual, Groups of Persons, Organizations or Associations. –

Pursuant to our obligations under United Nations Security Council Resolution (UNSCR) No. 1373, the
ATC shall automatically adopt the United Nations Security Council Consolidated List of designated
individuals, group of persons, organizations, or associations designated and/or identified as a
terrorist, one who finances terrorism, or a terrorist organization or group.
Request for designations by other jurisdictions or supranational jurisdictions may be adopted by the
ATC after determination that the proposed designee meets the criteria for designation of UNSCR
No.1373.
The ATC may designate an individual, groups of persons, organization, or association, whether
domestic or foreign, upon a finding of probable cause that the individual, groups of persons,
organization, or association commit, or attempt to commit, or conspire in the commission of the acts
defined and penalized under Sections 4, 5, 6, 7, 8, 9, 10, 11 and 12 of this Act.
xxx

www.amlc.gov.ph | [email protected]
Sanctions Freeze Orders (SFO) Pursuant to ATC Designations
Step 2 - Anti-Money Laundering Council (AMLC) Sanctions Freeze Order
Legal Basis (Anti-Terrorism Act or ATA)

SEC. 25. Designation of Terrorist Individual, Groups of Persons, Organizations or Associations .–

xxx
The assets of the designated individual, groups of persons, organization or association above-mentioned
shall be subject to the authority of the Anti-Money Laundering Council (AMLC) to freeze pursuant to Section
11 of Republic Act No. 10168.

Section 36.Freeze Order (par. 3)

Notwithstanding the preceding paragraphs, the AMLC, consistent with the Philippines’ international obligations, shall be
authorized to issue a freeze order with respect to property or funds of a designated organization, association, group or
any individual to comply with binding terrorism-related resolutions, including UNSCR No. 1373 pursuant to Article 41 of
the charter of the UN. Said freeze order shall be effective until the basis for the issuance thereof shall have been lifted.
During the effectivity of the freeze order, an aggrieved party may, within twenty (20) days from issuance, file with the
Court of Appeals a petition to determine the basis of the freeze order according to the principle of effective judicial
protection: Provided, That the person whose property or funds have been frozen may withdraw such sums as the AMLC
determines to be reasonably needed for monthly family needs and sustenance including the services of counsel and the
family medical needs of such person.
xxx
www.amlc.gov.ph | [email protected]
Sanctions Freeze Orders (SFO) Pursuant to ATC Designations
Step 3 - Publication of the Designation and Notice of Freeze Order
Legal Basis (Legal Basis (ATA IRR)
Rule 6.5. Posting, publication, dissemination, and notice of designation
All ATC resolutions of designation shall be published/posted in a newspaper of general circulation, on
the online official gazette, and on the official website of the ATC.
xxx

Rule 6.6. Effectivity of designation

The designations made under Rule 6.2 and Rule 6.3 shall be immediately executory and shall be valid
from the date of publication of the corresponding ATC resolution in the online official gazette and the
official website of the ATC.
Rule 8.8. Sanctions freeze order or targeted financial sanctions based on international obligations

The AMLC shall adopt a mechanism for immediately communicating the sanctions freeze order to the public,
the financial sector, and designated non-financial businesses and professions.
xxx

www.amlc.gov.ph | [email protected]
Sanctions Freeze Orders (SFO) Pursuant to ATC Designations
Step 4 - AMLC Advisory
Contents:
xxx
ATC Resolution on Designation

Names of designated individuals and entities

AMLC Resolution with a directive to all covered persons and stakeholders to

freeze/submit returns

Reminder/Warning against Dealing with a Designation Person or entity (liable for

criminal prosecution under Section 8 of the Terrorism Financing Suppression and
Prevention Act)

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Sanctions Freeze Orders (SFO) Pursuant to ATC Designations
Step 5 - Implementation of the Freeze Order

Freeze without delay

The Glossary of the FATF Recommendations defines without delay, with respect to
the Al-Qaida/Taliban sanctions regimes, as ideally, within a matter of hours of a
designation by the United Nations Security Council or its relevant Sanctions
Committee (e.g. the 1267 Committee, or the 1988 Committee). For the purposes of
resolution 1373(2001), the term without delay means upon having reasonable
grounds, or a reasonable basis, to suspect or believe that a person or entity is a
terrorist, one who finances terrorism or a terrorist organisation.
In both cases, the term without delay should be interpreted in the context of the
need to prevent the flight or dissipation of funds or other assets which are linked to
terrorists, terrorist organisations, and those who finance terrorism, and the need
for global, concerted action to interdict and disrupt their flow swiftly. (2013 FATF
International Best Practices [Recommendation 6], page 9)

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Sanctions Freeze Orders (SFO) Pursuant to ATC Designations

Step 6 - Potential Target Matches

Freeze of Target and Potential Target Matches
“Name Match” refers to an individual or entity whose name matches with a name in the UNSC
Consolidated List and any list of designations made by the ATC under Section 25 of the ATA.
“Potential Target Match” refers to an individual or entity whose identity matches most, but not all,
of the identifier information provided in the UNSC Consolidated List and any list of designations
made by the ATC under Section 25 of the ATA.
“Target Match” refers to an individual or entity whose identity matches all the identifier information
and is identified to be the designated person in the UNSC Consolidated List and any list of
designations made by the ATC under Section 25 of the ATA.
(ARI No. 2, s. 2021)

The obligation is to freeze the assets of target and potential target matches.
If having consulted the consolidated list/ATC designation CPs are still unsure on whether there is
a target match, CPs can contact the AMLC for assistance. (2021 Sanctions Guidelines).

www.amlc.gov.ph | [email protected]
Sanctions Freeze Orders (SFO) Pursuant to ATC Designations
Step 7 – AMLC Action
Potential Target Matches and Request for Assistance
Apart from filing an STR, covered persons should, inform the AMLC on the same day
the freeze is implemented, through email to the [email protected], copy furnish
the Executive Director, that a freeze has been implemented pursuant to these
guidelines.
The AMLC, within 36 hours from receipt of the information, shall confirm the propriety
of the freeze.
If no confirmation is received within the said 36-hour period, the freeze shall be
automatically lifted.
CPs and stakeholders may contact the AMLC for assistance. Upon receipt of the
request, the AMLC will provide the requested information while it investigates. In the
meantime, the freeze will continue until the AMLC determines that there is NO MATCH.

www.amlc.gov.ph | [email protected]
Preventive Measures (PH setting)

TRANSACTION REPORTING

Covered Transaction Report (CTR)

A transaction Timing of Reporting:

(in cash or equivalent monetary
instrument) Within five (5) working days
CTR from the date of occurrence
(unless the AMLC prescribes a
Amount in excess of different period not
Threshold exceeding 15 working days)

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Threshold
Single casino cash transaction in excess of
Casinos PhP5million or its equivalent in any other
currency

Single cash transaction in excess of

REDs and REBs PhP7.5million or its equivalent in any other
currency

Transaction in cash or other equivalent

Other DNFBPs monetary instrument in excess of
PhP500thousand (PhP1million for jewelry
dealers in precious metals and stones)
48
Preventive Measures (PH setting)
Suspicious Transaction Report (STR)
No underlying legal or Timing of Reporting: Structuring
trade obligation,
purpose or economic Within the next working
justification. day from date of Deviates from client’s
occurrence (discovery) profile and/or the past
transactions
Client not properly
identified STR
Related to an unlawful
activity, or any money
Amount not laundering activity or
commensurate with offense is about to be, is
client’s business or being or has been
financial capacity Similar or analogous
committed
circumstances

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 Preventive Measures (PH setting)

Covered Transaction also a Suspicious Transaction

[Section 1.2, Rule 22, 2018 IRR] MALICIOUS REPORTING IS
A CRIMINAL OFFENSE!
[6 months – 4 years imprisonment,
In cases where the transaction breached the P100,000 – P500,000
PHP500,000.00 threshold and there are suspicious No probation]
circumstances, report first as a CTR, subject to updating
if it is finally confirmed to be reportable as STR.

Form and Quality of Report [Section 3, Rule 22, 2018

IRR]
• Complete
• Accurate
• Timely

www.amlc.gov.ph | [email protected]
Preventive Measures (PH setting)
Safe Harbor Provision
No administrative, criminal or civil proceedings shall lie
against any person for having made a CTR or an STR in the
regular performance of his duties and in good faith,
whether or not such reporting results in any criminal
prosecution under the AMLA or any other Philippine law.

• DO NOT BE AFRAID TO FILE CTR AND STR!

• Filing CTRs and STRs is an exception to the
Data Privacy Act [Section 4(f)] NON-REPORTING OF
• CTR and STR are not necessarily proof that the CTR AND STR IS A
customer is involved in unlawful activity. CRIMINAL OFFENSE!
[6 month – 4 years
• CTR and STR are mere triggers for possible imprisonment,
investigation. P100,000 – P500,000 fine, or
both]

www.amlc.gov.ph | [email protected]
Preventive Measures (PH setting)
Safe Harbor Provision
No administrative, criminal or civil proceedings shall lie
against any person for having made a CTR or an STR in the
regular performance of his duties and in good faith,
whether or not such reporting results in any criminal
prosecution under the AMLA or any other Philippine law.

• DO NOT BE AFRAID TO FILE CTR AND STR! NON-REPORTING OF

• CTR and STR are not necessarily proof that the CTR AND STR IS A
customer is involved in unlawful activity. CRIMINAL OFFENSE!
• CTR and STR are mere triggers for possible [6 month – 4 years
imprisonment,
investigation. P100,000 – P500,000 fine, or
both]

www.amlc.gov.ph | [email protected]
Preventive Measures (PH setting)
Confidentiality of Reports

Covered persons, and their officers and employees,

are prohibited from communicating, directly or
indirectly, in any manner or by any means, to any
person or entity, or the media, the fact that a CTR or
STR has been or is about to be filed, the contents of
the report, or any other information in relation BREACH OF
thereto. CONFIDENTIALITY IS A
Any information about such reporting shall not be CRIMINAL OFFENSE!
published or aired, in any manner or form, by the [3 – 8 year imprisonment,
mass media, or through electronic mail, or other P500,000 – P1,000,000]
similar devices.

www.amlc.gov.ph | [email protected]
Registration for purposes of reporting
Section 52. Period of Registration with the AMLC. – For
new covered persons and existing DNFBPs, as defined
herein, who have not yet registered, they shall register with
the AMLC within six (6) months from effectivity of these
Guidelines. In the case of newly-established DNFBPs,
registration must be done prior to commencement of its
operation as a DNFBP. For more information visit:
www.amlc.gov.ph

Effectivity- 21 June 2021

Deadline – 21 December 2021
www.amlc.gov.ph | [email protected] 54
 AMLC Advisory posted on the AMLC Website on 19 May 2019

Purpose:
To remind Covered Persons (CPs) dealing
with customers who are DNFBPs*, to
require the presentation of the
Provisional Certificate of Registration
(PCOR) and/or Certificate of Registration
(COR) with the AMLC as part of its
Customer Due Diligence (CDD) measures.

*CPs considered as DNFBPs are enumerated under Rule 4, Section 1 (b) of the 2018 Implementing Rules and Regulations (IRRs)
of the Anti-Money Laundering Act, as amended.
55
Risk Management (PH setting)

MTPP: Continuing Education and Training

Program
• Develop, or create opportunities for,
continuing education and training programs to
promote AML/CTF awareness and strong
compliance culture. [Rule 16, Section 4.1, 2018 IRR]

• Refresher programs, at least, every three (3)

years. [Rule 16, Section 4.4, 2018 IRR]

MTPP: Updating
• At least, once every two years.

www.amlc.gov.ph | [email protected]
Preventive Measures (PH setting)
RECORD-KEEPING
• To maintain and safely store for five (5) years from the
dates of transactions all customer records and transaction
documents. [Section 1, Rule 20, 2018 IRR]

• To keep all records obtained through CDD, account files and

business correspondence, and the results of any analysis
undertaken, for, at least, five (5) years following the closure
of account, termination of the business or professional
relationship or after the date of the occasional transaction.
[Section 2, Rule 20, 2018 IRR]
FAILURE TO KEEP
• If a case has been filed in court involving the account, to RECORDS IS A CRIMINAL
retain and safely keep beyond the five (5)-year period, until OFFENSE!
it is officially confirmed by the AMLC that the case has been (6 months – 1 year imprisonment,
resolved, decided or terminated with finality. [Section 3, Rule P100,000 – 500,000 fine, or both)
20, 2018 IRR]

www.amlc.gov.ph | [email protected]
 Preventive Measures (PH setting)
Guidelines on the Digitization of Customer Records (DIGICUR)
Digitize all customer records – including “look back” to records prior to
implementation period – exclude closed accounts beyond the 5-year
retention period; does not apply to Money Service Business (MSB)
operations, except when the business model allows electronic wallet.

Maintain a central database – maintained in head offices; compliance

officer given direct and immediate access

Submissions to AMLC – via AMLC’s File Transfer and Reporting Facility Purpose: To prevent covered
(FTRF), or in such other forms as required (i.e. certified true copy) persons from tipping off clients
about AMLC investigations, by
limiting the covered person’s
Quality – complete, accurate, timely, and secured so as to be of use in
AMLC investigations. personnel who knows about
such investigations, and through
swift provision of required
Implementation – start within 6 months from effectivity (13 October
2018); within 2 years after the end of the 6-month period to implement, documents to AMLC.
all customer records should be completely digitized.

www.amlc.gov.ph | [email protected]
 Preventive Measures (PH setting)
Guidelines on the Digitization of Customer Records (DIGICUR)
Quality – complete, accurate, timely, and secured so as to be of use in AMLC
investigations.

Final Deadline – 30 September 2022 covers all prior and subsequent requests for
extensions.

Quarterly DIGICUR Status Report of Compliance (QUADSREC) – to be submitted

within 15 calendar days after each quarter, except the first report shall be submitted on
or before 31 October 2021.
➢ Failure to submit QUADSREC - Serious Violation under the Rules of Procedure in
Administrative Cases (RPAC) with penalties from Php15,000 to Php150,000 per
customer
Non-Compliance with DIGICUR – Grave Violation under the RPAC with penalties from
Php37,500 to Php375,000 per customer

www.amlc.gov.ph | [email protected]
Risk Management (PH setting)

PRIMARY DUTIES
Covered persons shall, comply with all the
requirements under the AMLA and TFPSA, their
respective IRR, and other AMLC issuances. They
shall have the duty to cooperate with the AMLC in
the, discharge of the latter’s mandate, and
execution of its lawful orders and issuances, to
protect their businesses or professions from being
used in ML/TF activities. (Rule 4, Section 2.1, 2018 IRR)

www.amlc.gov.ph | [email protected]
 Risk Management (PH setting)
INSTITUTIONAL RISK MANAGEMENT
• The board of directors of the covered person shall exercise
active control and supervision in the formulation and
implementation of institutional risk management. They shall
be ultimately responsible for the covered person’s compliance
with the AMLA and TFPSA, their respective IRR, and other
AMLC issuances. [Rule 15, Section 2.1, 2018 IRR]

• Covered persons shall develop sound risk management

policies, controls and procedures (i.e. MTPP), which are
approved by the board of directors to enable them to
manage and mitigate the risks that have been identified in
the NRA, or by the AMLC, SAs or the covered person itself.
[Rule 15, Section 2.2(a), 2018 IRR]

www.amlc.gov.ph | [email protected]
Risk Management (PH setting)
Money Laundering/Terrorism Financing Prevention Program (MTPP)

The MTPP shall be in writing and shall include, at the minimum, internal policies,
controls and procedures on the following:
(a) Risk management;
(b) Compliance management setup;
(c) Screening procedures to ensure high standards when hiring employees;
(d) Continuing education and training program;
(e) Independent audit function;
(f) Details of implementation of preventive measures;
(g) Compliance with freeze, bank inquiry and asset preservation orders, and all
directives of the AMLC;
(h) Adequate safeguards on the confidentiality and use of information exchange;
(i) Cooperation with the AMLC and SAs. [Rule 16, Section 1, 2018 IRR]

www.amlc.gov.ph | [email protected]
Legal Remedies

63
 Prosecution of ML

➢ Any person may be charged with

and convicted of both the offense
of money laundering (subject
offense) and the unlawful activity
(predicate offense)

➢ Any proceeding relating to the

unlawful activity shall be given
precedence over the prosecution
of any offense or violation under
R.A. No. 9160 without prejudice
to the freezing and other legal
remedies.
64
 Bank Inquiry

Deposit /
Investment
Non-Bank
Financial
Institutions

No violation of:
➢RA 1405 – Law on the Secrecy of Bank Deposits
➢RA 6426 – Foreign Currency Deposit Unit (FCDU) Law
➢RA 8791 – General Banking Law
65
 Application for Bank Inquiry
(W/ Court Order)

Order of
File Granted Bank
Inquiry

➢AMLC files ex parte Application for Bank Inquiry with Court

of Appeals (CA) for other Unlawful Activities
➢CA has 24 hours to act on Application
➢CA grants Application if it finds probable cause and issues
Order of Bank Inquiry 66
 Bank Inquiry (W/O Court
Order)
Unlawful Activities:

Drugs

Kidnapping AMLC
for Ransom Resolution
(KFR) for Bank
Inquiry

Acts of
Terrorism

67
Bank Inquiry
Covered person shall:

- Immediately give full access

to all information and documents
- Provide CTCs of the documents within 5 working days
- Keep confidentiality of the inquiry

68
 Petition to Freeze
(W/ Court Order)

Freeze
File Granted
Order

➢AMLC files ex parte Petition to Freeze with CA

➢CA has 24 hours to act on Application
➢CA grants Petition if it finds probable cause and issues Freeze Order effective for
20 days. During 20-day period, CA will conduct a summary hearing to determine
whether or not to lift the Freeze Order, or extend it to a total period of 6 months.
➢Freeze Order effective immediately including Related Accounts
69
 Related Accounts
Funds originated from and/or Materially Linked

Related
Account
Account
subject of
the Freeze
Order
Related
Account

70
 Freeze Order (FO)
➢Period: Total not exceeding six (6) months
➢No case filed = FO deemed
ipso facto lifted
➢Remedy of the Owner: File Motion to Lift

➢No Temporary Restraining Order (TRO)

➢Exception: issued by the Supreme Court
(For TFS: CA or SC)

71
 Duties of Covered Persons
1. Immediately freeze the monetary instrument or property
and related accounts;

2. Furnish copy of FO

3. Within 24 hours, submit to the CA and the AMLC a

detailed written return on the freeze order –
➢Account numbers
➢Name(s) of account holders
➢Amount
➢Other relevant information
➢Date and Time when order was served

4. File STR/s with the AMLC 72

 Civil Forfeiture
➢ Tool for Asset Recovery

➢ Filed with the Regional Trial Court (RTC)

➢ Non-Conviction based Asset Forfeiture

➢ Preponderance of Evidence, not Proof Beyond Reasonable
Doubt
➢ Judgment of Forfeiture
➢ Turned over to the National Gov’t; or
➢ Returned to the victims

73
Civil Forfeiture – PAPO & APO
➢ Provisional Asset Preservation Order (PAPO)
➢ Summary hearing within twenty (20) days
➢ Respondent may show good cause why PAPO should be lifted
➢ RTC shall determine whether PAPO should be modified/lifted
or APO should be issued
➢ Status-quo until RTC decides
➢ Asset Preservation Order (APO)
➢ Effective until judgment

74
Reminder

Covered persons are advised that

failure to comply with the
requirements of the 2018
Implementing Rules and Regulations
(IRRs) shall be subject to applicable
sanctions under Rule IV of the Rule of
Procedure in Administrative Cases
(RPAC).

75
 Discussion Points

1. What is money laundering and how is it committed?

2. Why do criminals need to launder proceeds of crime?
3. How may Covered Persons be abused for ML/TF?
4. How can we detect and prevent money launderers?
What are the preventive measures?
THANK YOU!

www.amlc.gov.ph | [email protected]