Mervidelle F.

Castro

ANTI-MONEY LAUNDERING ACT OF 2001

REPUBLIC ACT NO. 1960 MONEY

AMLA Act of 2001 is declared to ensure that the Philippines shall not be used as a
money laundering site for the proceeds of any unlawful activity. And also, to protect and
preserve the integrity and confidentiality of bank accounts.

Money Laundering is defined by the AMLA as a crime whereby proceeds of an

unlawful activity are transacted thereby making them appear to have originated from
legitimate source. 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:

1. Transacting or attempting to transact money laundering

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) above.

2. Facilitating money laundering

a) Aids, abets, assists in or counsels the commission of the money laundering

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

b) 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.

3. Failure to report

a) 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, fails to do so.

STAGES OF MONEY LAUNDERING

1. Placement – involves initial placement or introduction of the illegal funds into the
financial system. Banks and other financial institutions are usually used at this point.
  deposit of cash in bank
 convert cash into financial instruments (such as money orders or checks)
 purchase of an insurance policy or shares of stock

2. Layering – involves a series of financial transactions during which the dirty money is
passed through a series of procedures, putting layer upon layer of persons and financial
activities into the laundering process.

 transfer the funds electronically to other accounts in various jurisdictions

 disguise the transfer as payment for goods or services or loans

3. Integration – the money is once again made available to the criminal with the
occupational and geographic origin obscured or concealed. The laundered funds are now
integrated back into the legitimate economy through the purchase of properties,
businesses and other investments.

 purchase of properties and businesses/investments

ANTI-MONEY LAUNDERING ACT OF 2001

 R.A. No. 9160 took effect on October 17, 2001

 R.A. No. 9194 (amendatory law) took effect on March 23, 2003
 R.A. No. 10167 (amendatory law) signed on June 6, 2012 Revised IRRs -took
effect on September 7, 2003

MAJOR FEATURES OF AMLA

1. Criminalizes money laundering

2. Creates an AMLC to oversee the implementation of the law & to act as financial
intelligence unit
3. Requires reporting of covered and suspicious transactions & to cooperate with the
government in prosecuting offenders
4. Establishes procedures for international cooperation and assistance in the apprehension
and prosecution of ML suspects
5. Inclusion of the designed non-financial businesses and professions as covered person
6. AMLC’s ex parte bank inquiry
7. Requires Land Registration Authority and all its Registries of Deeds to report all real
estate transaction with an amount of more than P500,000 to the AMLC
8. Hefty fines and imprisonment imposed upon covered person who knowingly participated
in the commission of the crime of money laundering
9. Prohibition against discrimination on certain customer types
10. Non-intervention by the AMLC in the operations of the Bureau of Internal Revenue
(BIR)

ANTI-MONEY LAUNDERING COUNCIL (AMLC)

The AMLC Philippines is the government agency tasked to implement the provisions
of Republic Act No. 9160, also known as the “Anti-Money Laundering Act of 2001” (AMLA),
as amended, and Republic Act No. 10168, also known as the “Terrorism Financing
Prevention and Suppression Act of 2012” (TFPSA). It is the Philippines’ central anti-money
laundering/counter-terrorism financing (AML/CTF) authority, and financial intelligence
unit (FIU).

AMLC has the special powers:

1. Inquiry Into/Examination of Bank Deposits/Investments

2. Freeze of Dirty Money/Property

3. Forfeiture of Dirty Money/Property

The AMLC is composes of:

1. The Governor of the Bangko Sentral ng Pilipinas (BSP) as Chairman

2. The Commissioner of the Insurance Commission (IC) as member

3. The Chairperson of the Securities and Exchange Commission (SEC) as member It

acts unanimously in the discharge of its functions.

The AMLC shall be assisted by the AMLC Secretariat in the discharge of its
functions.

DEFINITION OF TERMS BY THE RIRR

A. PROCEEDS – It refers to an amount derived or realized from an unlawful activity.

- all material results, profits, effects and any amount realized from any unlawful
activity;
- all monetary, financial or economic means, devices, documents, papers or things
used in or having relation to any unlawful activity;
 -all moneys, expenditures payments, disbursements, costs, outlays, charges,
accounts, refunds and other similar items for the financing, operations, and
maintenance of any unlawful activity.

B. TRANSACTION – refers to any act establishing any right or obligation or giving rise to
any contractual or legal relationship between the parties thereto.

 includes any movement of funds by any means with a covered institution.

C. REPORTABLE TRANSACTIONS

a. Covered transaction – is a transaction in cash or other equivalent monetary

instrument involving a total amount in excess of Five Hundred Thousand Pesos
(Php500,000.00) within one (1) banking day.
b. Suspicious transaction – is a transaction with a covered institution, regardless of
the amount involved, where any of the following circumstances exist(s):
- There is no underlying legal or trade obligation, purpose or economic
justification;  The client is not properly identified;
- The amount involved is not commensurate with the business or financial
capacity of the client;
- 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 AMLA, as amended;
- Any circumstances relating to the transaction which is observed to deviate
from the profile of the client and/or client’s past transactions with the covered
institution person;
- The transaction is in any way related to an unlawful activity or any money
laundering activity or offense under the AMLA, as amended, that it about to be, is
being or has been committed; or
- Any transaction that is similar, or analogous or identical to any of the
foregoing.

D. UNLAWFUL ACTIVITIES CONSIDERED UNDER ALMA (AS AMENDED)

‘Unlawful activity’ refers to any act or omission or series or combination thereof

involving or having direct relation to the following:

1. Kidnapping for ransom

2. Drug Trafficking and other violations of the Comprehensive Dangerous Drugs Act of
2002
3. Graft and Corruption under R.A. No. 3019, as amended
4. Plunder (R.A. No. 7080 as amended)
5. Robbery and extortion
6. Jueteng and Masiao (PD 1602)
7. Piracy on the high seas (RPC) and in inland waters (PD 532)
8. Qualified Theft under Art. 310, RPC
9. Swindling under Art. 315, RPC
10. Smuggling under RA 455 & 1937
11. Violations of the Electronic Commerce Act of 2000
12. Hijacking, destructive arson and murder, including those perpetrated by terrorists
against non-combatant persons and similar targets
13. Fraudulent practices and other violations under the Securities Regulation Code of 2000
(RA 8799)
14. Felonies or offenses of a similar nature that are punishable under the penal laws of
other countries
15. Terrorism and conspiracy to commit terrorism
16. Financing of terrorism, attempt of conspiracy to commit terrorism financing,
accomplice to terrorism financing offense, accessory to terrorism financing offense
17. Bribery and corruption of public officers
18. Frauds and illegal exaction and transactions
19. Malversation of public funds and property
20. Forgeries and counterfeiting
21. Violations of the Anti-Trafficking in Persons Act of 2003
22. Violations of the Revised Forestry Code
23. Violations of the Philippine Fisheries Code of 1998
24. Violations of the Philippine Mining Act of 1995
25. Violations of the Wildlife Resources Conservation and Protection Act
26. Violations of the National Caves and Cave Resources Management Protection Act
27. Violations of the Anti-Carnapping Act
28. Violations of the Decree Codifying the laws on illegal/unlawful possession,
manufacture, dealing in acquisition or disposition of firearms, ammunition or explosives
29. Violations of the Anti-Fencing Law
30. Violations of the Migrant Workers and Overseas Filipinos Act of 1995, as amended

MONEY LAUNDERING OFFENSES

Money Launderer 7 to 14 years imprisonment and a fine of
not less than P3,000,000 but not more
than twice the value of the monetary
instrument (MI)/property (P)
The person who assists the Money 4 to 7 years imprisonment and a fine of
Launderer P1,500,000 to P3,000,000
 Those required to report covered & 6 months to 4 years imprisonment or
suspicious transaction P100,000 to P500,000 fine, or both
OTHER OFFENSES PUNISHABLE UNDER THE AMLA, AS AMENDED

Knowing participating in the commission of 4 to 7 years imprisonment and a fine

ML corresponding to not more that 200% of
the value of the ML/P
Failure to keep records 6 months to 1 year imprisonment or
P100,000 to P500,000 fine
Malicious Reporting 6 months to 4 years imprisonment or
P100,000 to P500,000 fine; provided that
the offender is not entitled to the
benefits of the Probation
Law Breach of Confidentiality 3 to 8 years imprisonment or P500,000 to
P1,000,000 fine
Administrative Offenses P100,000 to P500,000 on officers and
employees of covered institution who
violates the provisions of AMLA, as
amended, the IRRs and orders and
resolutions issued

JURISDICTION OVER MONEY LAUNDERING CASES

 For Preliminary Investigation –

 Department of Justice
 Office of the Ombudsman – where a public official or employee is involved
 For Trial –
 Regional Trial Courts (Special AML Courts) shall have jurisdiction to try all
cases on money laundering.
 Sandiganbayan shall try and decide violations of R.A. 9160, as amended,
committed by public officers or private persons who are in conspiracy with such
public officers.
 Trial for the money laundering offense shall proceed in accordance with the
Code of Criminal Procedure or the Rules of Procedure of the Sandiganbayan, as
the case may be. (Rule 6.4, RIRRs)

Covered institutions are classified as follows:

 Entities supervised and/or regulated by the Bangko Sentral ng Pilipinas

 Entities supervised and/or regulated by the Insurance Commission

 Entities supervised and/or regulated by the Securities and Exchange Commission

 Persons included under RA 10365

AMLA’s 3 MAJOR COMPLIANCE REQUIREMENTS

These are the basic duties of a covered institutions:

1. Customer Identification and Due Diligence - Identifying the customers and verifying
his/her identity through reliable and independent documents, data and information. By
identifying customers effectively, the business is able to deal with them in the
appropriate manner. Prospective clients without acceptable IDs shall not be allowed to
transact with the FI. Covered institutions must know fully and truly their customers.
Hence, they shall:
 Require their customers to submit one (1) valid photo-bearing ID issued by an
official authority.
 Maintain accounts only in the true and full name of the account owner or holder.
 Not allow opening and creation of new accounts without face-to-face contact
and full compliance with the requirements on minimum information/ documents,
for individual customers.
 Prohibited accounts
a. Anonymous accounts
b. Accounts under fictitious names
c. Numbered checking accounts
d. Other similar accounts
2. Record Keeping/Retention All covered institutions shall: - Maintain and safely store all
records of all their transactions for at least 5 years from the transaction dates.
 Ensure that said records/files contain the full and true identity of the owners
or holders of the accounts involved in the transactions and all other
identification documents.
 Undertake the necessary adequate measures to ensure the confidentiality of
such file.
 Permanent closed accounts, preserve and safely store the records on customer
identification, account files and business correspondence for at least 5 years
from closure dates.
 If a money laundering case based on any record kept by the covered institution
has been filed in court, retain said file until it is confirmed that the case has
been finally resolved or terminated by the court.
 Retain records as originals in such forms as are admissible in court.
3. Reportorial Duty - The Covered Transaction Report (CTR) and Suspicious Transaction
Report (STR) shall be in the form prescribed by the appropriate supervising authority
and approved by the AMLC.
 Period of Reporting of Covered and Suspicious Transactions – within five (5)
working days from occurrence thereof.
 Should a transaction be determined to be both a covered transaction and a
suspicious transaction, the covered institution shall be required to report the
same as a suspicious transaction.
 Administrative sanction for violation is up to P300,000 on a per transaction
basis but not more that P500,000 per violation. MAJOR COMPONENTS OF

MONEY LAUNDERING PREVENTION

1. Customer Due Diligence (Know Your Customer)

2. Record keeping
3. Reporting of Covered and Suspicious Transactions
4. Training
5. Periodic Assessment

Minimum information that should be obtained when establishing business relationship with
a potential customer.

1. Complete name including middle/maiden name; NOTE: Middle name of client must be
required except on those clients whose middle name is not part of their legal name.

2. Complete present address;

3. Complete permanent address (P.O. Box is not sufficient);

4. Nature of work, name of employer or nature of self-employment/business;

5. Date and place of birth;

6. Nationality;

7. Source of funds;

8. Contact number or information (business/residential tel. No., fax no., email-address);

9. Tax Identification Number (TIN) and Social Security System or Government Service
and Insurance System number, if any;

10. Specimen signature; and

11. Name, present address, date and place of birth, nationality, nature of work and source
of funds of beneficial owner, whenever applicable.