ANTI-MONEY LAUNDERING ACT
9160, the AMLC may inquire
2006 BAR
Q: Rudy is jobless but is reputed to be a jueteng
operator. He has never been charged or convicted of
any crime. He maintains several banks accounts and
has purchased 5 houses and lots for his children
from the Luansing Realty, Inc. since he does not
have any visible job, the company reported his
purchases to the AMLC. Thereafter, AMLC charged
him with violation of the Anti-Money Laundering
Law. Upon request of the AMLC, the bank disclosed
to it Rudy’s bank deposits amounting to P100M.
Subsequently, he was charged in court for violation
of the Anti-Money Laundering Law.
1. Can Rudy move to dismiss the case on the ground
that he has no criminal record?
A: No. As with any crime, the absence of a criminal
record is not a defense against a charge for violation of
the AntiMoney Laundering Law. Moreover, having a
criminal record is not an element of Money Laundering
Offense defined under Section 4 of the Anti-Money
Laundering Law
2. To raise funds for his defense, Rudy sold the
houses and lots to a friend. Can Luansing Realty, Inc.
be compelled to transfer to the buyer ownership of
the houses and lots?
A: Yes. In the absence of a freeze order on the subject
houses and lots pending criminal proceedings against
Rudy, the ownership thereof may be validly transferred
to another, and Luansing Realty, Inc. can be compelled
to recognize the rights of the buyer as the new owner.
Section 7(6) in relation to Section 10 of the Anti-Money
Laundering Law required an Order from the Court of
Appeals for the freezing of any money or property
believed to be the proceeds of any unlawful activity
3. In disclosing Rudy’s bank accounts to the AMLC,
did the bank violate any law?
A: Yes. The bank violated RA No. 1405 (Secrecy of Bank
Deposits Act), which considers all deposits of whatever
nature with banks or banking institutions as absolutely
confidential and may not be examined, inquired or
looked into by any person, government officials, bureau
or office except upon depositor’s written permission; in
cases of impeachment; upon order of a competent court
in cases of bribery of, or dereliction of duty by public
official; and in cases where the money deposited or
invested is the subject matter of the litigation. The
disclosure was made before Rudy was charged in court
for violation of the Anti-Money Laundering Law. Hence,
his deposits were technically not yet the subject matter
of litigation.
Moreover, under RA No.
into or examine any particular deposit or investment
with any banking institution upon order of any
competent court for violation of the said Act. In the case
at bar, the AMLC merely requested the disclosure; it did
not secure the requisite court order. The bank,
therefore, was under no obligation to disclose Rudy’s
deposits.
4. Supposing the titles of the houses and lots are in
possession of the Luansing Realty, Inc., is it under
obligation to deliver the titles to Rudy?
A: Yes. There being no freeze order over the subject
houses and lots, Luansing Realty, Inc., is obliged to
deliver the titles to Rudy who is the owner thereof.
2007 BAR
Q: Name at least 5 predicate crimes to money
laundering.
A:
a. Kidnapping for ransom under Article 267 of Act no.
3815, otherwise known as the RPC, as amended;
b. Sections 3,4,5,7,8, and 9 of Article Two of R.A. No.
6425, as amended, otherwise known as the Dangerous
Drugs Act of 1972;
c. Section 3 paragraphs B,C,E,G,H, and I of R.A. No. 3019,
as amended, otherwise known as the Anti-Graft and
Corrupt Practices Act;
d. Plunder under R.A. No. 7080, as amended;
e. Robbery and extortion under Articles 294, 295, 296,
300, 301, and 302 of the RPC, as amended;
f. Jueteng and Masiao punished as illegal gambling
under PD No. 1602;
g. Piracy on the high seas under the RPC, as amended
and PD No. 532;
h. Qualified theft under Article 310 of the RPC, as
amended;
i. Swindling under Article 315 of the RPC, as amended;
j. Smuggling under R.A. Nos. 455 and 1937;
k. Violations under RA No. 8792, otherwise known as
the Electronic Commerce Act of 2000;
l. Hijacking and other violations under RA No. 6235;
destructive arson and murder, as defined under the
RPC, as amended, including those perpetrated by
terrorists against non-combatant persons and similar
targets;
m. Fraudulent practices and other violations under RA
No. 8799, otherwise known as the SRC of 2000;
n. Felonies or offenses of a similar nature that are
punishable under the penal laws of other countries.
2011 BAR
MCQ
Q:Under the Anti-Money Laundering Law, a covered
institution is required to maintain a system of
verifying the true identity of their clients as well as
persons purporting to act on behalf of
(A) those doing business with such clients.
(B) unknown principals.
(C) the covered institution.
(D) such clients.
A: (D) such clients.
2012 BAR
MCQ
Q:The Anti-Money Laundering Law is a law that
seeks to prevent money laundering activities by
providing for more transparency in the Philippine
Financial System, hence the following institutions
are covered by the law, except:
a. bank and any financial institutions;
b. pawnshops;
c. casino operators;
d. All of the above
A: c. casino operators
Q:For purposes of determining violation of the
prov1s1ons of Anti-Money Laundering Law, a
transaction is considered as a "Suspicious
Transaction" with "Covered Institutions" regardless
of the amount involved, where which the following
circumstances exist/s?
a. the amount involved is not commensurate with
the client's business or financial capacity;
b. there is no underlying legal or trade obligation,
purpose or economic justification;
c. client is not properly identified;
d. All of the above.
A: d. All of the above.
2013 BAR
Q: From his first term in 2007, Congressman Abner
has been endorsing his pork barrel allocations to
Twin Rivers in exchange for a commission of 40% of
the face value of the allocation. Twin Rivers is a
nongovernmental organization whose supporting
papers, after audit, were found by the Commission
on Audit to be fictitious. Other than to prepare and
submit falsified papers to support the encashment
of the pork barrel checks, Twin Rivers does not
appear to have done anything on the endorsed
projects and Congressman Abner likewise does not
appear to have bothered to monitor the progress of
the projects he endorsed. The congressman
converted most of the commissions he generated
into US dollars, and deposited these in a foreign
currency account with Banco de Plata (BDP).
Based on amply-supported tips given by a
congressman from another political party, the Anti-
Money Laundering Council sent BDP an order: (1) to
confirm Cong. Abner's deposits with the bank and to
provide details of these deposits; and (2) to hold all
withdrawals and other transactions involving the
congressman's bank accounts.
As counsel for BDP, would you advise the bank to
comply with the order?
A: I shall advise Banco de Plata no to comply with the
order of the Anti-Money Laundering Council. It cannot
inquire into the deposits of Congressman Abner,
regardless of currency, without a bank inquiry order
from a competent court, because crimes involved are
not kidnapping for ransom, violations of the
Comprehensive Dangerous Drugs Act, hijacking and
other violations of Republic Act No. 6235, destructive
arson, murder, and terrorism and conspiracy to commit
terrorism (Sec. 11 of Anti-Money Laundering Act).
The Anti-Money Laundering Council cannot order
Banco de Plata to hold all withdrawals and other
transactions involving the accounts of Congressman
Abner. It is the Court of Appeals which has the power to
issue a freeze order over the accounts upon petition of
the Anti-Money Laundering Council (Anti-Money
Laundering Act; Republic v. Carbini Green Ross, 489
SCRA 644, 2006).
MCQ
Under the Anti-Money Laundering Act, a depositor’s
bank account may be frozen.
(A) By the bank when the account is the subject of a
suspicious or covered transaction report
(B) By the Anti-Money Laundering Council (AMLC)
when the account belongs to a person already
convicted of money laundering
(C) By the Regional Trial Court, upon ex parte
motion by the AMLC, in a criminal prosecution for
money laundering pending before it.
(D) By the Court of Appeals motu proprio in an
appeal from a judgment of conviction of a criminal
charge for money laundering.
(E) In none of the above.
A: (E) In none of the above. (Section 10 of the Anti-
Money Laundering Act)
(Sec. 10, as amended, provides that “upon a verified ex
parte petition by the AMLC and after determination that
probable cause exists that any monetary instrument or
property is in any way related to an unlawful activity as
defined in Sec. 3(i), the Court of Appeals may issue a
freeze order which shall be effective immediately and
which shall not exceed 6 months…”)
2015 BAR
Suspicious Transactions
Q: What is the distinction between a “covered
transaction report” and a “suspicious transaction
report”
A: A covered transaction report involves transaction/s
in cash or other equivalent monetary instrument
involving a total amount in excess of 500k within one
banking day while suspicious transaction report
involves transactions with covered institutions
regardless of the amounts involved made under any of
the suspicious circumstances enumerated by law.
Q: Does the Anti-Money Laundering Council have
the authority to freeze deposits? Explain
A: No. The authority to freeze deposits is lodged with
and based upon the order of the Court of Appeals
(Section 10 of RA 9160 as amended).
2016 BAR
A. Flora, a frequent traveller, found a purse
concealed between the cushions of a large sofa
inside the VIP lounge in NAIA while she was waiting
for her flight to be called. Inside the purse was a
very valuable diamond-studded necklace. She
decided not to turn over the purse to the airport
management, and instead to keep it. On her return
from her travels, she had a dependable jeweller
appraise the necklace, and the latter told her that
the necklace was easily worth at least P5 million in
the open market. To test the appraisal, she pawned
the necklace for P2 million. She then deposited the
entire amount in her checking account with Metro
Bank. Promptly, Metro Bank reported the
transaction to the Anti-Money Laundering Council
(AMLC).
Given that her appropriation was theft, may Flora
be successfully prosecuted for money laundering?
Explain briefly your answer.
A: No, she cannot be prosecuted for money laundering.
Under AMLA, the predicate crime or unlawful activity
referred to is qualified theft, not plain theft.
B. Prosperous Bank is a domestic bank with head
office in Makati. It handles the banking
requirements of thousands of clients.
The AMLC initiated a discreet investigation of the
financial transactions of Lorenzo, a suspected drug
trafficker based in Naga City. The intelligence group
of the AMLC, in coordination with the counterpart
group from the PDEA and the NBI, gathered ample
evidence establishing Lorenzo’s unlawful drug
activities. The AMLC had probable cause that his
deposits and investments in various banks,
including Prosperous Bank, were related to money
laundering.
Accordingly, the AMLC now transmits to Prosperous
Bank a formal demand to allow its agent to examine
the banking transactions of Lorenzo, but
Prosperous Bank refuses the demand.
Is Prosperous Bank’s refusal justified? Explain your
answer.
A: No, the bank cannot refuse. The AMLC may inquire
into or examine any particular deposit or investment
with any banking institution when it has been
established that there is probable cause that the
deposits or investments are related to an unlawful
activity. No court order is required if the predicate
crime is violation of the Dangerous Drugs Act.