“Corruption is a source of laundered funds, and smuggling, particularly bulk cash smuggling, is a

major problem”

Monitoring of money laundering in the Philippines is weak as the government is faced with limited

human and financial resources, according to the latest annual US State Department Report on Terrorism.

It said the Philippines should pass the pending bill on anti-money laundering. In addition, the

country should seek to include casinos in the proposed list of covered institutions. Casinos currently are

not covered under the Anti-Money Laundering Act (AMLA), and the laws surrounding online gaming are

even less clear.

While the government of the Philippines has made notable progress in enacting legislation and

issuing regulations, limited human and financial resources constrain tighter monitoring and enforcement.

In June 2012, the Philippines enacted legislation to address some noted major deficiencies. The

changes authorize the Anti-Money Laundering Council (AMLC) to apply to the courts for ex-parte inquiry

into deposits and investments in relation to all unlawful activities enumerated under the AMLA.

Money Laundering is a crime whereby the proceeds of an unlawful activity as defined in the

AMLA are transacted or attempted to be transacted to make them appear to have originated from

legitimate sources.

Republic Act No. 9160 otherwise known as The Anti-Money Laundering Act of 2001 was

signed into law on September 29, 2001 and took effect on October 17, 2001. The implementing Rules

and Regulations took effect on April 2, 2002. On March 7, 2003, R.A. No. 9194 (An Act Amending R.A.

No. 9160) was signed into law and took effect on March 23, 2003. The revised Implementing Rules and

Regulations took effect on September 7, 2003.

The Philippines, while striving to sustain economic development and poverty alleviation

through, among others, corporate governance and public office transparency, must contribute its share

and play a vital role in the global fight against money laundering. Hence, the compelling need to enact
responsive anti-money laundering legislation in order to establish and strengthen an anti-money

laundering regime in the country which will not only increase investor’s confidence but also ensure that

the Philippines is not used as a site to launder proceeds of unlawful activities.

Money Laundering Offenses and Penalties:

1. Knowingly transacting or attempting to transact any monetary instrument/property which represents,

involves or relates to the proceeds of an unlawful activity. Penalty is 7 to 14 years imprisonment and a

fine of not less than P3M but not more than twice the value of the monetary instrument/property.

2. Knowingly performing or failing to perform an act in relation to any monetary instrument/property

involving the proceeds of any unlawful activity as a result of which he facilitated the offense of money

laundering. Penalty is 4 to 7 years imprisonment and a fine of not less than P1.5M but not more than

P3M.

3. Knowingly failing to disclose and file with the AMLC any monetary instrument/property required to be

disclosed and filed. Penalty is 6 months to 4 years imprisonment or a fine of not less than P100,000 but

not more than P500,000, or both.

Unlawful Activity is the offense which generates dirty money or property. It is commonly called

the predicate crime. It refers to any act or omission or series or combination thereof involving or having

direct relation to the following:

Predicate Crimes/Unlawful Activities

1. Kidnapping for ransom

2. Drug trafficking and related offenses

3. Graft and corrupt practices

4. Plunder

5. Robbery and Extortion

6. Jueteng and Masiao

7. Piracy

8. Qualified theft

9. Swindling

10. Smuggling

11. Violations under 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

14. Felonies or offenses of a similar nature that are punishable under the penal laws of other countries.

15. Terrorism financing and organizing or directing others to commit terrorism financing (R.A. 10168).

16. Attempt/conspiracy to commit terrorism financing and organizing or directing others to commit

terrorism financing (R.A. 10168).

17. Attempt/conspiracy to commit dealing with property or funds of designated person.

18. Accomplice to terrorism financing or conspiracy to commit terrorism financing.

19. Accessory to terrorism financing.

Covered Institutions are those mandated by the AMLA to submit covered and suspicious transaction

reports to the AMLC.

These are:

1. Banks and all other entities, including their subsidiaries and affiliates, supervised and regulated by the

Bangko Sentral ng Pilipinas

2. Insurance companies, pre-need companies and all other institutions supervised or regulated by the

Insurance Commission

3. Securities dealers and other entities supervised or regulated by the Securities and Exchange

Commission.

Covered & Suspicious Transactions:

1. Covered transactions are single transactions in cash or other equivalent monetary instrument

involving a total amount in excess of Five Hundred Thousand (P500,000) Pesos within one (1) banking

day

2. Suspicious transactions are transactions with covered institutions, regardless of the amounts

involved, where any of the following circumstances exists:

3. There is no underlying legal/trade obligation, purpose or economic justification; the client is not

properly identified;

4. The amount involved is not commensurate with the business or financial capacity of the client;
5. The transaction is structured to avoid being the subject of reporting requirements under the AMLA;

6. There is a deviation from the client’s profile/past transactions;

7. The transaction is related to an unlawful activity/offense under the AMLA;

and transactions similar or analogous to the above.

Freezing of Monetary Instrument or Property

The AMLC may file before Court of Appeals, before the verified application ex parte (without

notice to the other party) after determination that probable cause exists that any monetary instrument

or property is in any way related to an unlawful activity. The freeze order shall be effective immediately.

The freeze order shall be for a period of 20 days unless extended by the court.

Authority to Inquire into Bank Deposits

The AMLC may inquire into or examine any particular deposit or investment with any banking

institution or non-bank financial institution upon order of any competent court in cases of violation of

the AMLA when it has been established that there is probable cause that the deposits or investments

involved are in any way related to a money laundering offense.

In order to implement its continued commitment and support of the global fight against money

laundering, the BSP has issued a number of measures to bring the Philippines' regulatory regime on

money laundering closer to international standards. In September 2001, the Anti-Money Laundering Act

(AMLA) of 2001 was passed under Republic Act No. 9160. The legislation, among others, defines money

laundering as a criminal offense, prescribes penalties for such crimes committed and forms the

foundation of a central monitoring and implementing council called the Anti-Money Laundering Council

(AMLC). To combat money laundering, this law imposes requirements on customer identification, record

keeping, reporting of covered and suspicious transactions, relaxes strict bank deposit secrecy laws, and
provides for freezing/seizure/forfeiture/recovery of dirty money/property as well as for international

cooperation.

The AMLC is comprised of three (3) members: the Governor of the Bangko Sentral ng Pilipinas as the

Chairman and the other two (2) members are the Commissioner of the Insurance Commission and the

Chairman of the Securities and Exchange Commission. It acts unanimously in the discharge of its

functions. AMLC is also referred to as the country’s Financial Intelligence Unit (FIU) and is assisted by a

Secretariat, otherwise known as the AMLC Secretariat (AMLCS), headed by an Executive Director.

To address concerns such as the high threshold level for covered transactions, the coverage of

“covered institutions” and the existing Bank Secrecy Law, the amendments to the AMLA were signed

into law on 7 March 2003 under Republic Act No. 9194. The amendments included the following: a)

lowering the threshold for covered transactions from P4.0 million to P500,000; b) authorizing the BSP to

inquire or examine any deposit or investment with any banking institution without court order in the

course of a periodic or special examination; and c) removing the provision prohibiting the retroactivity

of the law.

Said amendments were given favorable consideration by the Financial Action Task Force (FATF)

and sanctions were not imposed on the Philippines. However, the Philippines at that time remained in

the list of non-cooperative countries and territories (NCCTs) of the FATF and the country’s removal from

the list will be determined by the FATF after close monitoring of the implementation issues. The

Philippines was finally removed from the NCCT list of the FATF in February 2005 due to excellent

progress made in combating money laundering and terrorist financing.

The Revised Implementing Rules and Regulations (RIRR) on the AMLA of 2001, as amended, was

approved by the Congressional Oversight Committee on 6 August 2003 and was implemented on 3

September 2003.
Second AMLA Amendment under RA 10167 – June 2012

To further strengthen the country’s AML regime and address the concerns of the FATF, second AMLA

amendment under RA 10167 was signed into law on 18 June 2012 amending for the purpose Sections 10

and 11 of the AMLA, as amended.

Section 10 relates to the “Freezing of Monetary Instrument” wherein upon verified “ex parte” petition

by the AMLC, the Court of Appeals (CA) should act on the petition to freeze within twenty-four (24)

hours from filing of the petition, and the freeze order shall be for a period of twenty (20) days unless

extended by the Court/CA.

Section 11 relates to the “Authority to Inquire into Bank Deposits” wherein the AMLC is given

authority to examine bank accounts “upon order of any competent court based on an ex parte

application” which effectively expanded the instances when no such court application is required. Said

provision simply means that the court may allow the AMLC to look into bank deposit accounts of

suspected money launderers without notifying them. Under this Section, the CA is directed to act on the

application to inquire into or examine any deposit or investment account within twenty-four (24) hours

from date of filing of the application. In addition, although Section 11 of the AMLA reworded the

authority of BSP to check the compliance in the course of a periodic or special examination of a covered

institution with the requirements of the AMLA and its implementing rules and regulations, the

sponsoring Senator when asked if the BSP, without court order, may be allowed to look into specific

accounts under the proviso, Senator Guingona said that it is only to ensure compliance with AMLA.

These two amended provisions recognized the urgency of the issuance of the freeze order

and the grant of authority to AMLC to conduct bank inquiry within 24 hours from the filing of the

petition.
 This AMLA amendment under RA 10167 resulted to favorable action of the FATF where it

decided to upgrade the country's “dark gray” list to “gray”, which is just one notch away from being

taken out in the FATF list of nations considered non-compliant to global AML standards.

After the passage of RA 10167, the Revised Implementing Rules and Regulations (RIRR) was

approved under AMLC Resolution No. 84 dated 23 August 2012. BSP disseminated said RIRR to all BSP

covered institutions under BSP Circular Letter No. CL-2012-068 dated 20 September 2012.

As continuing commitment to comply with FATF AML/CFT standards, the third AMLA amendment under

RA 10365 was passed into law on 15 February 2013 that covered the following major amendments:

1. Expansion of the definition of the crime of money laundering: AMLC can now go after persons who

engage in the conversion, transfer, movement, disposal of, possession, use, and concealment or

disguise, of the monetary proceeds of an unlawful activity, that was previously limited to the transaction

of laundered funds and property;

2. Inclusion of jewelry dealers in precious metals and stones whose transactions are in excess of

P1,000,000 and company service providers as defined and listed under RA 10365, are now included as

“Covered Persons”;

3. Increase of unlawful activities to money laundering from 14 to 34. The 20 additional crimes include

trafficking in persons, bribery, counterfeiting, fraud and other illegal exactions, forgery, malversation,

various environmental crimes, and terrorism and its financing;

4. Authorize the AMLC to require the Land Registration Authority and all its Register of Deeds to submit

report to the AMLC covering real estate transactions in excess of P500,000.00;

5. Issuance of freeze order by the Court is now valid for a maximum period of six (6) months, from the

previous twenty (20) days validity under RA 10167.

Compliance with FATF International Standards

In November 2003, the Philippines’ amendments to the AMLA were evaluated by the FATF

and were found to be at par with international standards. On 11 February 2005, the Philippines, Cook

Islands, and Indonesia were removed from the list of NCCTs during the meeting of the FATF. After the

country’s delisting from the list of NCCT’s, the AMLC of the Philippines was accepted as one of seven

new members of the Egmont Group, the global network of FIUs against money laundering and terrorist

financing, making the Philippines an equal partner in the global fight against money laundering and

terrorist financing. Membership to the Egmont Group means affording AMLC free and unlimited access

to a wealth of financial data contained in the databases of all the FIU-members of the group. All

information exchanged by FIUs are subjected to strict controls and safeguards to ensure it is used only in

an authorized manner, consistent with national provisions on privacy and data protection.

The recent AMLA amendments under RA 10167 and RA 10365 are testament of the

Philippine’s serious commitment to further strengthen the country’s AML regime and to address the

weaknesses noted by the FATF in the Philippine’s legal framework with regard to AML. Passage of these

laws were officially recognized and favorably considered by the FATF that are now in substantial

compliance with its AML/CFT international standards. Thus, FATF in its February 2013 plenary meeting,

shielded the Philippines from being blacklisted again.

Other AML Initiatives Undertaken by BSP to Further Strengthen the Country’s AML Regime

Since 2000, the BSP continued to firmly undertake several initiatives on how to safeguard the Philippine

banking system through constant reshaping of existing AML preventive measures and implementation

of appropriate policies at par with global standards such as the following initiatives.

1. Creation of the Anti-Money Laundering Specialist Group (AMLSG) within the Supervision and

Examination Sector (SES

The AMLSG was created on 13 December 2007 under MB Resolution No. 1443 to address the need for

technical expertise in the supervision of AML activities of banks and non-bank financial institutions

(NBFIs) under the supervision and regulation of the BSP. The Group became fully operational in

November 2008 and currently has 34 authorized plantilla positions. It is under the direct supervision of

the Managing Director, Supervision and Examination Subsector I, SES.

AMLSG aims to be BSP's core unit of highly competent, dynamic and ethical professionals who work to

ensure financial institutions (FIs) adopt and maintain adequate and effective policies, systems and

procedures that prevent them from being used to support the laundering of proceeds from any unlawful

activity. AMLSG is tasked to develop relevant guidelines and regulations to support and guide the AML

efforts of financial institutions supervised by the BSP, ensure the effective implementation of said

policies through examination services and technical assistance to the SES and enhance the related

technical skills of the SES human resource pool through training. In addition, AMLSG shall perform off-

site monitoring to identify those FIs whose operations present an elevated risk of money laundering

activities. AMLSG works closely with the AMLC Secretariat and various banking and non-bank industry

associations under the regulatory ambit of the BSP to foster domestic cooperation.

Since 2008, AMLSG has conducted several AML onsite examinations, particularly commercial banks due

to their significant assets size and complex banking activities. The Group was also principally involved in

the crafting of AML rules and regulations, such as the issuance of Circular 706 dated 5 January 2011 and

the adoption on 2 March 2012 of the AML Risk Rating System, that are discussed below.

2. Issuance of a consolidated AML regulations under BSP Circular No. 706 dated 5 January 2012,

otherwise known as the Updated AML Rules and Regulations (UARR)

UARR was issued for the purpose of consolidating all existing BSP circulars, circular letters and other

issuances related to AML. Likewise, it enhances the implementation of the existing AML legal framework

to better conform with international standards as well as address the deficiencies noted by the joint

team of assessors from the World Bank and Asia Pacific Group on Money Laundering during the mutual

evaluation of the country in 2008.

The UARR applies to all covered institutions supervised and regulated by the BSP including Banks,

Offshore banking units, quasi banks, trust entities, non-stock savings and loan associations, pawnshops,

foreign exchange dealers, money changers and remittance agents, electronic money issuers including

their subsidiaries and affiliates wherever they may be located.

In addition to the usual provisions on customer identification/KYC, covered and suspicious transaction

reporting and record keeping and retention requirements that are found in the AMLA-RIRR, the UARR

emphasizes the incorporation of a sound risk management system to ensure that risks associated with

money laundering and terrorist financing are identified, assessed, monitored, mitigated and controlled

by covered institutions. A sound risk management system includes adequate and active Board and

Senior Management oversight, acceptable policies and procedures embodied in a Money Laundering

and Terrorist Financing Prevention Program (MLPP), appropriate monitoring and Management

Information System and comprehensive internal controls and audit.

UARR encourages covered institutions to formulate a risk-based and tiered customer acceptance and

retention policies, adoption of a criteria for assessing customers as low, normal and high risk and

standards for applying reduced, average and enhanced due diligence. It also mandates observance of

extreme caution and vigilance in dealing with high risk customers such as shell companies.
The UARR also strongly supports the Financial Inclusion advocacy promoted by the BSP. For instance, it

allows a) the outsourcing of the conduct of face-to-face contact as well as the gathering of the KYC

documents and information to establish the identity of a customer; b) acceptance of one (1) valid ID for

the conduct of financial transactions, listing for this purpose a wide variety of acceptable IDs and the

utilization of the covered institution’s own technology to take the photo of their customers in case the

ID presented is non-photo-bearing such as TIN, barangay and DSWD certification; and c) the third-party

reliance is likewise introduced in the UARR to avoid duplication of customer identification processes so

that covered institutions may refocus their resources to better serve and address the needs of

customers. This principle allows a covered institution such as a Bank to rely on the KYC conducted by

another covered institution.

UARR further provides that any violations of existing provisions thereof shall constitute a major

violation, that may subject the bank, its directors, officers and staff to enforcement actions such as

monetary and non-monetary penalties. The enforcement actions shall may be imposed on the basis of

the overall assessment of a covered institution’s AML compliance system, and if found to be grossly

inadequate, such may be considered as unsafe and unsound banking practice that may warrant

initiation of prompt corrective action.

3. Adoption of AML Risk Rating System (ARRS)

No. 362 dated 2 March 2012 and disseminated to all BSP covered institutions under Memorandum to All

Banks No. 2012-017 dated 4 April 2012.

ARRS is an internal rating system to be used by BSP to understand whether the risk management

policies and practices as well as internal controls of Banks and NBFIs to prevent money laundering and

terrorist financing are in place, well disseminated and effectively implemented. ARRS is an effective

supervisory tool that undertakes to ensure that all covered institutions as defined under Circular No. 706
are assessed in a comprehensive and uniform manner, and that supervisory attention is appropriately

focused on entities exhibiting inefficiencies in Board of Directors the adoption of an AML Risk Rating

System (ARRS) approved under MB Resolution and Senior Management oversight and monitoring,

inadequacies in their AML framework, weaknesses in internal controls and audit and defective

implementation of internal policies and procedures.

Under the ARRS, each covered institution is assigned a Numerical and Adjectival Composite Rating (4 as

the highest – sound; 3 – adequately sound; 2- vulneralbe; and 1 as the lowest – grossly inadequate)

based on the assessment of the following four (4) components:

1. Component I- Efficient Board of Directors (BOD) and Senior Management (SM) Oversight

(“Management”);

2. Component II- Sound AML policies and procedures embodied in a Money Laundering and Terrorist

Financing Prevention Program duly approved by the Board of Directors (“MLPP”);

3. Component III- Robust internal controls and audit (“Controls and Audit”); and

4. Component IV- Effective implementation (“Implementation”).

Evaluation of the four (4) components takes into consideration the covered institution’s responses to

various questions that are designed to comprehend its business operations as well as its risk profile. The

responses will be assessed and on-site examination will confirm their veracity and accuracy. Based on

the evaluation of the existence or non-existence of the each of the above components, BSP covered
institutions are assigned a Numerical and Adjectival Component Rating that also ranges from 4 as the

highest and 1 as the lowest. After considering the four components, enforcement actions proportional

to the Composite Rating are recommended to ensure that BSP covered institutions take necessary

measures to improve their risk management policies and practices.

4. Proactive issuance of AML Regulations on Ongoing Basis since 2000

Aside from AML Circulars, BSP also issues on an ongoing basis Circular-Letters since 2000 to disseminate

resolutions adopted by the AMLC covering updates of guidelines on reporting of suspicious transactions

or identifying suspected individuals or organizations (local and international) known to be involved in

money laundering and other illegal activities, particularly those included in the United Nations Sanctions

List.

In addition, BSP has issued several media releases and other public advisories to disseminate certain

suspicious or illegal activities to make the public fully aware of them.

Money laundering is the process whereby the proceeds of crime are transformed into

ostensibly legitimate money or other assets.[1] However, in a number of legal and regulatory systems

the term money laundering has become conflated with other forms of financial crime, and sometimes

used more generally to include misuse of the financial system (involving things such as securities, digital

currencies, credit cards, and traditional currency), including terrorism financing, tax evasion and evading

of international sanctions. Most anti-money laundering laws openly conflate money laundering (which is

concerned with source of funds) with terrorism financing (which is concerned with destination of funds)

when regulating the financial system. Money obtained from certain crimes, such as extortion, insider

trading, drug trafficking, illegal gambling and tax evasion is "dirty". It needs to be cleaned to appear to

have derived from non-criminal activities so that banks and other financial institutions will deal with it
without suspicion. Money can be laundered by many methods, which vary in complexity and

sophistication. Different countries may or may not treat tax evasion or payments in breach of

international sanctions as money laundering. Some jurisdictions differentiate these for definition

purposes, and others do not. Some jurisdictions define money laundering as obfuscating sources of

money, either intentionally or by merely using financial systems or services that do not identify or track

sources or destinations. Other jurisdictions define money laundering to include money from activity that

would have been a crime in that jurisdiction, even if it were legal where the actual conduct occurred.

This broad brush of applying the term "money laundering" to merely incidental, extraterritorial, or

simply privacy-seeking behaviours has led some to label it "financial thought crime".

Many regulatory and governmental authorities issue estimates each year for the amount of money

laundered, either worldwide or within their national economy. In 1996, the International Monetary

Fund estimated that two to five percent of the worldwide global economy involved laundered money.

The Financial Action Task Force on Money Laundering (FATF), an intergovernmental body set up to

combat money laundering, stated, "Overall, it is absolutely impossible to produce a reliable estimate of

the amount of money laundered and therefore the FATF does not publish any figures in this regard."[4]

Academic commentators have likewise been unable to estimate the volume of money with any degree

of assurance.[5] Various estimates of the scale of global money laundering are sometimes repeated

often enough to make some people regard them as factual—but no researcher has overcome the

inherent difficulty of measuring an actively concealed practice.

Regardless of the difficulty in measurement, the amount of money laundered each year is in the

billions (US dollars) and poses a significant policy concern for governments. As a result, governments
and international bodies have undertaken efforts to deter, prevent, and apprehend money launderers.

Financial institutions have likewise undertaken efforts to prevent and detect transactions involving dirty

money, both as a result of government requirements and to avoid the reputational risk involved. Issues

relating to money laundering have existed as long as there have been large scale criminal enterprises.

Modern anti-money laundering laws have developed along with the modern War on Drugs. In more

recent times anti-money laundering legislation is seen as adjunct to the financial crime of terrorist

financing in that both crimes usually involve the transmission of funds through the financial system.

Money laundering is commonly defined as occurring in three steps:

The first step involves introducing cash into the financial system by some means ("placement");

The second involves carrying out complex financial transactions to camouflage the illegal source

("layering");

And the final step entails acquiring wealth generated from the transactions of the illicit funds

("integration"). Some of these steps may be omitted, depending on the circumstances; for example,

non-cash proceeds that are already in the financial system would have no need for placement.

Money laundering takes several different forms, although most methods can be categorized into

one of a few types. These include "bank methods, smurfing [also known as structuring], currency

exchanges, and double-invoicing"

Anti-money laundering (AML) is a term mainly used in the financial and legal industries to describe the

legal controls that require financial institutions and other regulated entities to prevent, detect, and

report money laundering activities. Anti-money laundering guidelines came into prominence globally as

a result of the formation of the Financial Action Task Force (FATF) and the promulgation of an

international framework of anti-money laundering standards. These standards began to have more
relevance in 2000 and 2001, after FATF began a process to publicly identify countries that were deficient

in their anti-money laundering laws and international cooperation, a process colloquially known as

"name and shame".

An effective AML program requires a jurisdiction to have criminalized money laundering, given the

relevant regulators and police the powers and tools to investigate; be able to share information with

other countries as appropriate; and require financial institutions to identify their customers, establish

risk-based controls, keep records, and report suspicious activities.

Global Organizations working against money laundering

Formed in 1989 by the G7 countries, the FATF is an intergovernmental body whose purpose is to

develop and promote an international response to combat money laundering. The FATF Secretariat is

housed at the headquarters of the OECD in Paris. In October 2001, FATF expanded its mission to include

combating the financing of terrorism. FATF is a policy-making body that brings together legal, financial,

and law enforcement experts to achieve national legislation and regulatory AML and CFT reforms. As of

2014 its membership consists of 36 countries and territories and two regional organizations. FATF works

in collaboration with a number of international bodies and organizations. These entities have observer

status with FATF, which does not entitle them to vote, but permits them full participation in plenary

sessions and working groups. FATF has developed 40 recommendations on money laundering and 9

special recommendations regarding terrorist financing. FATF assesses each member country against

these recommendations in published reports. Countries seen as not being sufficiently compliant with

such recommendations are subjected to financial sanctions.

FATF's three primary functions with regard to money laundering are:

1. Monitoring members’ progress in implementing anti-money laundering measures.

2. Reviewing and reporting on laundering trends, techniques, and countermeasures.

3. Promoting the adoption and implementation of FATF anti-money laundering standards globally.

The bill that would strengthen the Anti-money laundering council will include foreign exchange

establishments, real estate dealers, and jewelry and precious metal dealers in the list of those that

should report any suspicious transactions.

A provision that includes casinos in the list was previously proposed by Senate President Juan Ponce

Enrile. This provision however was not accepted by the panel of the House of Representatives during the

bicameral conference.

Senator Teofisto Guingona III had said that if the Senate panel refused the removal of the provision on

casinos, they would not be able to get the bill through with the limited time left.

“There is a deadlock and time is running out. If both panels maintain their position…we would have no

law,” Guingona said.

The Senate is set to go into recess on Wednesday to give way to the May 2013 election campaign.

The Philippines faces being blacklisted by the International Financial Action Task Force (FATF) if it fails to

pass the bill.

The Philippine Amusement and Gaming Corp (Pagcor) will come out with a set of rules to monitor

suspicious transactions even after casinos have been excluded from the coverage of the recently

amended Anti-Money Laundering Act (AMLA).

Pagcor vice president for gaming and licensing development Francis Hernando said the state-gaming

firm has started drafting the rules that could be implemented starting September this year.
“There will be a set of rules. We’re actually developing a set of rules in time for the opening of Solaire,”

Hernando told Senate reporters, referring to Bloomberry’s Solaire Manila Resorts and Casio, one of four

license holders of Pagcor’s Entertainment City project.

“Our casino regulations and part of those casino regulations will touch on monitoring transactions that

may be deemed to be say suspicious under the AMLA,’ he said.

A proposal requiring casinos to report suspicious transactions was rejected by Congress when it

approved early this month a bill that seeks to strengthen the AMLA.

Despite this, Hernando said Pagcor would police its own to strengthen its regulatory power and be at

par with international standards.

“I think if we want to be international class and recognized worldwide, we have to police ourselves

properly,” he said.

“We’d like to hopefully be recognized as a serious jurisdiction internationally. The way Macau and

Singapore and Las Vegas, New Jersey, Australia do it, there is a formal set of rules that is applied to

everybody for a level playing field,” said Hernando.

“The rules are predictable, there are set sanctions for certain infractions and we’ve all put this and

codified these into a manual. And that manual that’s under development. The first draft has already

been approved by our board and we’re hoping that the formal form will be finished by September,”

Hernando added.

President Benigno Aquino III signed on Friday the measure amending the Anti-Money Laundering Act

(Amla).

Deputy presidential spokesperson Abigail Valte made the announcement in a text message sent out to

the media.
Republic Act No. 10365 is also known as an “Act Strengthening the Anti-Money Laundering Law.”

Valte confirmed that the law would shield the country from being blacklisted by the International

Financial Action Task Force (FATF).

“Yes, this is the third law required to keep us off the FATF blacklist. The first two were passed last year,”

she said.

Valte, however, couldn’t cite highlights of the new law as she had yet to see the “final copy.”

“I need to compare it with the old one (law) first. I’ll be in a better position to give you details once I

have the signed copy,” said Valte.

A blacklist could mean difficulties for overseas Filipinos sending money home as more documentation

would be required from them as a result of the country’s blacklisting.

The bicameral conference committee approved amendments to Amla last week.

The law strengthens the antimoney-laundering council by requiring foreign exchange establishments,

real estate dealers, and jewelry and precious metal dealers to report any suspicious transactions.

A set of procedures, laws or regulations designed to stop the practice of generating income

through illegal actions. In most cases money launderers hide their actions through a series of steps that

make it look like money coming from illegal or unethical sources was earned legitimately.

Though anti-money-laundering laws cover only a relatively limited number of transactions and criminal

behaviors, their implications are extremely far reaching. An example of AML regulations are those that

require institutions issuing credit or allowing customers open accounts to complete a number of due-

diligence procedures to ensure that these institutions are not aiding in money-laundering activities. The

onus to perform these procedures is on the institutions, not the criminals or the government.
MANILA, Philippines - Amendments to the “dirty money” law which expanded its covered institutions

and crimes are set to take effect this month.

Republic Act (RA) 10365, which amended certain provisions of the Anti-Money Laundering Act (AMLA) of

2001, was signed into law by President Aquino last Feb. 15. The law will take effect 15 days after

publication in a newspaper or by April 19.

It was among the measures enacted for the Philippines to avoid getting blacklisted by the Financial

Action Task Force (FATF), a global anti-money laundering watchdog.

Since then, FATF has kept the Philippines under its grey list, which signified commitment to pass

reforms. Being blacklisted would have meant higher financial transaction costs, especially for Filipinos

abroad.

The Paris-based FATF has scheduled an “on-site visit” to inspect if AMLA reforms are being implemented

accordingly. A total of three laws- including RA 10365 – have been passed to address FATF concerns.

Under RA 10365, foreign exchange corporations, money changers, pre-need and insurance companies

were included in covered firms required to report transactions of P500,000 and above to the Anti-

Money Laundering Council (AMLC).

Jewelry dealers will be required to do so for transactions worth P1 million and above, it added.

Originally, only banks, quasi-banks and non-bank financial

The law also required the Land Registration Authority to submit to AMLC reports covering real estate

purchases worth P500,000 and up.

Aside from this, predicate crimes- or those criminal acts where the law may also be applied if money is

involved- were also expanded to cover 20 other acts, including bribery, extortion, malversation of public

funds, fraud and financing of terrorism.

The original law only mentioned 14 acts connected to money laundering such as kidnapping, piracy on

high seas, smuggling, robbery and plunder.

Despite AMLA having more teeth, RA 10365 still prevented AMLC to “participate in any manner” in the

operations of the Bureau of Internal Revenue, which effectively banned it to intervene in the collection

of taxes in pursuit of its mandate.

Two other laws were passed last year in order for the Philippines to comply with FATF requirements.

They are RA 10168 and 10167, which respectively criminalized terrorist financing activities and gave

AMLC the power to examine bank accounts without the owner’s consent.

Who are these Money Laundering and Terrorist Financing regulations aimed at? Suspicious

foreigners who might want to do something unconscionable like buy a house or condo? If our

governments had spent a tenth as much time watching what was happening on Wall Street as they

wasted chasing imaginary terrorists we'd all be in much better shape now.

In many parts of the world, such crime-fighting assets cannot be taken for granted. In some countries,

particularly those in the developing world, the challenges may be more fundamental, but the end result

is the same, which is a financial sector vulnerable to abuse by criminals.

While much progress has been made on the legislative front, with most of the world’s countries now

signed up to relevant United Nations conventions and other key international standards and

agreements, the UNODC said the capacity of countries to make proper use of them varies significantly.
Some countries have an insufficient institutional framework with deficiencies in the regulatory system,

financial intelligence unit and/or enforcement mechanisms. Others have more basic needs, such as an

electronic population registry, access to fast and reliable Internet and communication services, or

computer equipment and software needed to keep track of financial movements.