REVISED IMPLEMENTING RULES AND REGULATIONS (RIRRs)

OF REPUBLIC ACT NO.9160 (THE ANTI-MONEY LAUNDERING ACT OF 2001)

(AMLA), AS AMENDED BY REPUBLIC ACT NO.9194 (2003), REPUBLIC ACT NO.
10167 (2012)
AND REPUBLIC ACT NO. 10365 (2013)

RULE I - TITLE AND PURPOSE

Section 1. Short Title and Purpose.

a) These Rules shall be known and cited as the “2013 Revised Implementing
Rules and Regulations of Republic Act No. 9160, as amended”.
b) These Rules are promulgated to prescribe the procedures and guidelines for the
implementation of the AMLA, as amended.

RULE II - DECLARATION OF POLICY

Section 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 Philippines shall extend
cooperation in transnational investigations and prosecutions of persons involved in
money laundering activities wherever committed.

RULE III - DEFINITION OF TERMS

Section 3. Definitions.- For purposes of these Rules, the following terms are hereby
defined as follows:

3.1. “Covered persons”, natural or juridical, refer to:

3.1.1. Banks, offshore banking units, quasi-banks, trust entities, non-stock

savings and loan associations, pawnshops, foreign exchange dealers,
money changers, money remittance or transfer companies, electronic
money issuers and all other persons and entities supervised or regulated
by the BSP, including their subsidiaries and affiliates.(a)

a) A subsidiary means an entity more than 50% of the outstanding voting

stock of which is owned by a bank, quasi-bank, trust entity or any
other institution being supervised and regulated by the BSP.

b) An affiliate means an entity at least twenty percent (20%) but not

exceeding fifty percent (50%) of the outstanding voting stock of which
is owned by a bank, quasi-bank, trust entity or any other institution
being supervised and regulated by BSP.

3.1.2. Insurance companies, insurance agents, insurance brokers, professional

reinsurers, reinsurance brokers, holding companies, holding company
systems, pre-need companies, mutual benefit associations and all other
persons and entities supervised and regulated by the Insurance Commission
(IC).

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a) Insurance company shall include all partnerships, associations,
cooperatives or corporations, including government-owned or -
controlled corporations or entities, engaged as principals in the
insurance business, excepting mutual benefit associations. Unless the
context otherwise requires, the term shall also include professional
reinsurers defined in Section 288 of Republic Act No. 10607, otherwise
known as “The Insurance Code”. Domestic company shall include
companies formed, organized or existing under the laws of the
Philippines. Foreign company when used without limitation shall
include companies formed, organized, or existing under any laws other
than those of the Philippines. (Sec. 190, R.A. No. 10607)
b) An insurance agent includes any person who for compensation solicits
or obtains insurance on behalf of any insurance company or transmits
for a person other than himself an application for a policy or contract of
insurance to or from such company or offers or assumes to act in the
negotiation of such insurance.
c) An insurance broker includes any person who for any compensation,
commission or other thing of value acts or aids in any manner in
soliciting, negotiating or procuring the making of any insurance
contract or in placing risk or taking out insurance, on behalf of an
insured other than himself.
d) A professional reinsurer includes any entity that transacts solely and
exclusively reinsurance business in the Philippines, whether domestic
or foreign company. A contract of reinsurance is one by which an
insurer procures a third person to insure him against loss or liability by
reason of such original insurance.
e) A reinsurance broker is one who, for compensation, not being a duly
authorized agent, employee or officer of an insurer in which any
reinsurance is effected, acts or aids in any manner in negotiating
contracts of reinsurance, or placing risks of effecting reinsurance, for
any insurance company authorized to do business in the Philippines.
f) A holding company includes any person who directly or indirectly
controls any authorized insurer.
g) A holding company system includes a holding company together with
its controlled insurers and controlled persons.
h) A “pre-need company” refers to any corporation registered with the
Commission and authorized/licensed to sell or offer to sell pre-need
plans. The term “pre-need company” also refers to schools, memorial
chapels, banks, non-bank financial institutions and other entities which
have also been authorized/licensed to sell or offer to sell pre-need
plans insofar as their pre-need activities or business are concerned.
“Pre-need plans” are contracts, agreements, deeds or plans for the
benefit of the plan holders which provide for the performance of future
service/s, payment of monetary considerations or delivery of other
benefits at the time of actual need or agreed maturity date, as
specified therein, in exchange for cash or installment amounts with or
without interest or insurance coverage and includes life, pension,
education, interment and other plans, instruments, contracts or deeds
as may in the future be determined by the Commission.
i) Mutual Benefit Association refers to any society, association or
corporation, without capital stock, formed or organized not for profit
but mainly for the purpose of paying sick benefits to members, or of
furnishing financial support to members while out of employment, or of
paying to relatives of deceased members of fixed or any sum of
money, irrespective of whether such aim or purpose is carried out by
means of fixed dues or assessments collected regularly from the

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 members, or of providing, by the issuance of certificates of insurance,
payment of its members of accident or life insurance benefits out of
such fixed and regular dues or assessments, but in no case shall
include any society, association, or corporation with such mutual
benefit features and which shall be carried out purely from voluntary
contributions collected not regularly and or no fixed amount from
whomsoever may contribute.

3.1.3. The following Covered Persons under the supervision and regulation of the
Securities and Exchange Commission (SEC):

a) Securities brokers, dealers, salesmen, Associated Person of a Broker or

Dealer, investment houses and other similar persons managing securities
or rendering similar services as investment agents, trading advisors or
consultants.

1. A securities broker includes a person engaged in the business of

buying and selling securities for the account of others.
2. A securities dealer includes any person who buys and sells
securities for his/her account in the ordinary course of business.
3. A securities salesman refers to a natural person hired to buy and
sell securities on a salary or commission basis properly endorsed to
the Commission by the employing broker dealer.
4. An Associated Person of a Broker or Dealer includes any person
employed full time by the broker dealer whose responsibilities
include internal control supervision of other employees, agents,
salesmen, officers, directors, clerks and stock holders of such
broker dealer for compliance with the Securities Regulation Code
(SRC) and rules and regulations adopted thereunder.
5. An investment house includes an enterprise which engages or
purports to engage, whether regularly or on an isolated basis, in
the underwriting of securities of another person or enterprise,
including securities of the Government and its instrumentalities.
6. Investment Advisor/Agent/Consultant shall refer to any person:
a) who for an advisory fee is engaged in the business of advising
others, either directly or through circulars, reports, publications
or writings, as to the value of any security and as to the
advisability of trading in any security;
b) who for compensation and as part of a regular business, issues or
promulgates, analyzes reports concerning the capital market,
except:
(i) any bank or trust company;
(ii) any journalist, reporter, columnist, editor, lawyer, accountant,
teacher;
(iii) the publisher of any bona fide newspaper, news, business or
financial publication of general and regular circulation,
including their employees;
(iv) any contract market;
(v) such other person not within the intent of thisdefinition,
provided that the furnishing of such service by the foregoing
persons is solely incidental to the conduct of their business or
profession.
c) who undertakes the management of portfolio securities of
investment companies, including the arrangement of purchases,
sales or exchanges of securities.

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 b) mutual funds or open-end investment companies, close-end investment
companiesor issuers and other similar entities;
(i) A mutual fund or an open-end investment company includes an
investment company which is offering for sale or has outstanding,
any redeemable security of which it is the issuer.
(ii) A closed-end investment company includes an investment company
other than open-end investment company.
c) financing companies and lending companies, both with more than 40%
foreign participation in each voting stock or with paid-up capital of Php10
million or more; and
(i) Financing Companies are corporations which are primarily organized
for the purpose of extending credit facilities to consumers and to
industrial, commercial, or agricultural enterprises, by direct lending or
by discounting or factoring commercial papers or accounts receivable,
or by buying or selling contracts, leases, chattel mortgages, or other
evidences of indebtedness, or by financing leasing of movable as well
as immovable property. The same does include banks, investments
houses, savings and loan associations, insurance companies,
cooperatives, and other financial institutions organized and operating
under other special laws.
(ii) Lending Company shall refer to a corporation engaged in granting
loans from its capital funds or from funds sourced from not more
than nineteen (19) persons. It shall not be deemed to include
banking institutions, investment houses, savings and loan
associations, financing companies, pawnshops, insurance companies,
cooperatives and other credit institutions already regulated by law.
The term shall be synonymous with lending investors.

d) other entities administering or otherwise dealing in commodities, or financial

derivatives based thereon, valuable objects, cash substitutes and other
similar monetary instruments or properties supervised and regulated by the
Securities and Exchange Commission (SEC).

3.1.4. Jewelry dealers in precious metals, who, as a business, trade in precious

metals; (n)

3.1.5. Jewelry dealers in precious stones, who, as a business, trade in precious

stones; (n)

3.1.6. Company service providers which, as a business, provide any of the

following services to third parties:

a) acting as a formation agent of juridical persons;

b) acting as (or arranging for another person to act as) a director or
corporate secretary of a company, a partner of a partnership, or a similar
position in relation to other juridical persons;
c) providing a registered office; business address or accommodation,
correspondence or administrative address for a company, a partnership
or any other legal person or arrangement; and
d) acting as (or arranging for another person to act as) a nominee
shareholder for another person. (n)

3.1.7. Persons who provide any of the following services other than those
supervised and regulated by the BSP, SEC and IC:

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 a) Managing of client money, securities or other assets;
b) Management of bank, savings or securities accounts;
c) Organization of contributions for the creation, operation or management
of companies; and
d) Creation, operation or management of juridical persons or arrangements,
and buying and selling business entities.

Notwithstanding the foregoing, the term “covered persons” shall exclude

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

“Independent legal professional” are lawyers and accountants working in a

private firm or sole practitioner who by way of business provides purely
legal or notarial services to their clients.

3.2. “Customer” refers to any person or entity that keeps an account, or otherwise
transacts business, with a covered person, and any person or entity on whose
behalf an account is maintained or a transaction is conducted, as well as the
beneficiary of said transactions. A customer also includes the following: i)
beneficiary of a trust, an investment fund or a pension fund; ii) a company or
person whose assets are managed by an asset manager; iii) a grantor of a
trust; and iv) any insurance policy holder, whether actual or prospective.

3.3. “Beneficial owner” shall mean any natural person who ultimately owns or
controls the customer and/or any natural person on whose behalf a transaction
or activity is being conducted. It also includes those persons who exercise
ultimate effective control over a legal person or arrangement.

3.3.1. “Ultimate effective control” refers to situations in which

ownership/control is exercised through actual or a chain of ownership or by
means of control other than direct control.

3.4. “Politically Exposed Persons” (PEPs) refer to:

a) “Domestic PEPs” - individuals who are or have been entrusted

domestically with prominent public functions or positions with
substantial authority over policy, operations or the use or allocation of
government-owned resources, such as but not limited to, head of
state, senior politicians, senior government, executive, legislative,
judicial or military officials, senior executives of GOCCs, and important
political party officials;
b) “Foreign PEPs” - individuals who are or have been entrusted with
prominent public functions by a foreign country, such as but not
limited to, heads of state or of government, senior politicians, senior
government, judicial or military officials, senior executives of
government owned or controlled corporations (GOCCs), important
political party officials; and
c) “International Organization PEPs” - individuals who are or have
been entrusted with a prominent function by an international

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 organization or members of senior management or individuals who
have been entrusted with equivalent functions, such as but not limited
to, directors, deputy directors and members of the board or equivalent
functions. (n)

3.4.1. “Family members of PEPs” refers to immediate family members of a

PEP, which shall include the following:

a) Spouse/partner;
b) Children and their spouses; and
c) Parents and Parents-in-law. (n)

3.5. “Monetary Instrument” shall include, but not limited to the following:

a) Coins or currency of legal tender of the Philippines, or of any other

country;
b) Credit instruments, including bank deposits, financial interest,
royalties, commissions and other intangible property; (n)
c) Drafts, checks and notes;
d) Shares, participation or interest in a corporation or in a commercial
enterprise or profit-making venture and evidenced by a certificate,
contract, instrument, whether written or electronic in character
including those enumerated in Sec. 3 of the Securities and Regulation
Code. (n)
e) A participation or interest in any non-stock, non-profit corporation. (n)
f) Securities or negotiable instruments, bonds, commercial papers,
deposit certificates, trust certificates, custodial receipts or deposit
substitute instruments, trading orders, transaction tickets and
confirmations of sale or investments and money market instruments;
g) Contracts or policies of insurance, life or non-life, contracts of
suretyship, pre-need plans and member certificates issued by mutual
benefit association;
h) Virtual and digital currencies; and
i) Other similar instruments where title thereto passes to another by
endorsement, assignment or delivery.

3.6. “Offender”refers to any person who commits a money laundering offense.

3.7. “Person” refers to any natural or juridical person.

3.8. “Proceeds” refers to an amount derived or realized from an unlawful activity,

which includes, but is not limited to:

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

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3.9. “Property” refers to anything or item of value, tangible or intangible, or any
interest therein, any benefit, privilege, claim or other right with respect thereto,
which include, but not limited to - the following:

a) Personal property, including proceeds derived therefrom, traceable to any

unlawful activity, which includes, but is not limited to:

(i) Cash;
(ii) Jewelry, precious metals, precious stones, and other similar items;
(iii) Works of art such as paintings, sculptures, antiques, treasures, and
other similar precious objects;
(iv) Perishable goods; and
(v) Vehicles, vessels or aircraft, or any other similar conveyance.

b) Personal property, used as instrumentalities in the commission of any

unlawful activity such as:

(i) Desktops, laptops, servers, tablets, mobile phones, storage media

(Disks, Memory Sticks, etc.), computer accessories;
(ii) Database, applications, software programs, and other electronic
information and communication systems; and
(iii) Any conveyance, including any vehicle, vessel and aircraft.

c) Real estate, improvements constructed or crops growing therefrom, or any

interest therein, standing upon the record of the registry of deeds of the
province in the name of the party against whom the asset preservation
order is issued, or not appearing at all upon such records, or belonging to
the offender and held by any other person, or standing on the records of
the registry of deeds in the name of any other person, which are:

(i) Derived from, or traceable to, any unlawful activity; or

(ii) Used as an instrumentality in the commission of any unlawful
activity. (n)

3.10. “Related Accounts” are those accounts, the funds and sources of which
originated from and/or are materially linked to the monetary instruments or
properties subject of the freeze order.

3.10.1. “Materially linked accounts”

For the purpose of this paragraph, it shall include but are not limited to
the following:

(i) All accounts or monetary instruments belonging to the same person

whose accounts, monetary instruments or properties are the
subject of the freeze order;
(ii) All accounts or monetary instruments held, owned or controlled by
the owner or holder of the accounts, monetary instruments or
properties subject of the freeze order, whether such accounts are
held, owned or controlled singly or jointly with another person;
(iii) All accounts or monetary instruments the funds or any portion of
which are transferred to the accounts, monetary instruments or
properties subject of the freeze order without any legal or trade
obligation, purpose or economic justification;

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 (iv) All “In Trust For” (ITF) accounts where either the trustee or the
trustor pertains to a person whose accounts, monetary instruments
or properties are the subject of the freeze order;
(v) All accounts held for the benefit or in the interest of the person
whose accounts, monetary instruments or properties are the
subject of the freeze order;
(vi) All accounts or monetary instruments under the name of the
immediate family or household members of the person whose
accounts, monetary instruments or properties are the subject of
the freeze order if the amount or value involved is not
commensurate with the business or financial capacity of the said
family or household member.

“Immediate family members” includes the spouse/partner,

parents, parents-in-law, children and their spouses. “Household
members” shall refer to persons other than members of the
immediate family, who live in the same house, including but not
limited to, family driver/s and house helper/s; (n)
(vii) All accounts of corporate or juridical entities the beneficial owner of
which is the subject of the freeze order.
(viii) All shares or units in any investment accounts and/or pooled funds
of the person whose accounts, monetary instruments or properties
are subject of the freeze order; and
(ix) All other accounts, shares, units or monetary instruments that are
similar, analogous or identical to any of the foregoing.

3.11. “Supervising Authority” (SA) refers to the BSP, the SEC, the IC, and
the relevant regulatory bodies of the Designated Non-Financial Businesses and
Professions (DNFBPs) herein enumerated under Sections 3.1.4 to 3.1.7, or
other government agency/ies designated by Law. For DNFBPs without SAs, the
AMLC shall act as the SA for AML/CFT purposes.(a)

3.12. “Transaction” refers to any act establishing any right or obligation or

giving rise to any contractual or legal relationship between the parties thereto.
It also includes any movement of funds by any means with a covered person.

4.9.1.
4.9.2.
4.9.3.
4.9.4.
4.9.5.
4.9.6.
4.9.7.
4.9.8.
3.12.1. “Covered Transaction”

3.12.1.1. Covered transaction shall refer to:

a) A single transaction in cash or other equivalent monetary instrument

involving an amount in excess of Five hundred thousand pesos
(Php500,000.00).

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 b) As regards jewelry dealers in precious metals and precious stones, any
single transaction in excess of One million pesos (Php1,000,000.00).(n)

3.12.2. “Suspicious Transaction” is a transaction, regardless of amount,

where any of the following circumstances exist:

a) there is no underlying legal or trade obligation, purpose or economic

justification;
b) the client is not properly identified;
c) the amount involved is not commensurate with the business or
financial capacity of the client;
d) taking into account all known circumstances, it may be perceived that
the client’s transaction is structured in order to avoid being the subject
of reporting requirements under the AMLA, as amended;
e) any circumstance relating to the transaction which is observed to
deviate from the profile of the client and/or the client’s past
transactions with the covered person;
f) the transaction is in any way related to an unlawful activity or any
money laundering activity or offense, is being or has been committed;
g) any transaction that is similar, analogous or identical to any of the
foregoing.

3.13. “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 under Article 267 of Act No. 3815, otherwise
known as the Revised Penal Code, as amended;

2. Sections 4, 5, 6, 8, 9, 10, 11, 12,13, 14, 15 and 16 of Republic Act No.

9165, otherwise known as the Comprehensive Dangerous Drugs Act of
2002;
a) Importation of prohibited drugs;
b) Sale of prohibited drugs;
c) Trading of prohibited drugs;
d) Administration of prohibited drugs;
e) Dispensation of prohibited drugs;
f) Delivery of prohibited drugs;
g) Distribution of prohibited drugs;
h) Transportation of prohibited drugs;
i) Maintenance of a Den, Dive or Resort for prohibited drugs;
j) Illegal chemical diversion of prohibited drugs;
k) Manufacture or delivery of equipment, instrument, apparatus and other
paraphernalia for prohibited drugs;
l) Possession of prohibited drugs;
m) Possession of equipment, instrument, apparatus and other
paraphernalia for prohibited drugs;
n) Possession of prohibited drugs during parties, social gatherings or
meetings;
o) Possession of equipment, instrument, apparatus and other
paraphernalia for prohibited drugs during parties, social gatherings or
meetings;
p) Use of prohibited drugs;
q) Cultivation of plants classified as or which are sources of prohibited
drugs;

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 r) Culture of plants classified as or which are sources of prohibited drugs;

3. Section 3 paragraphs b, c, e, g, h and i of Republic Act No. 3019, as

amended, otherwise known as the Anti-Graft and Corrupt Practices Act;
a) Directly or indirectly requesting or receiving any gift, present, share,
percentage or benefit for himself or for any other person in connection
with any contract or transaction between the Government and any
other party, wherein the public officer in his official capacity has to
intervene under the law;
b) Directly or indirectly requesting or receiving any gift, present or other
pecuniary or material benefit, for himself or for another, from any
person for whom the public officer, in any manner or capacity, has
secured or obtained, or will secure or obtain, any government permit
or license, in consideration for the help given or to be given, without
prejudice to Section 13 of R.A. No. 3019;
c) Causing any undue injury to any party, including the Government, or
giving any private party any unwarranted benefits, advantage or
preference in the discharge of his official, administrative or judicial
functions through manifest partiality, evident bad faith or gross
inexcusable negligence;
d) Entering, on behalf of the Government, into any contract or transaction
manifestly and grossly disadvantageous to the same, whether or not
the public officer profited or will profit thereby;
e) Directly or indirectly having financial or pecuniary interest in any
business contract or transaction in connection with which he intervenes
or takes part in his official capacity, or in which he is prohibited by the
Constitution or by any law from having any interest;
f) Directly or indirectly becoming interested, for personal gain, or having
material interest in any transaction or act requiring the approval of a
board, panel or group of which he is a member, and which exercises
discretion in such approval, even if he votes against the same or he
does not participate in the action of the board, committee, panel or
group;

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

a) Plunder through misappropriation, conversion, misuse or malversation
of public funds or raids upon the public treasury;
b) Plunder by receiving, directly or indirectly, any commission, gift, share,
percentage, kickbacks or any other form of pecuniary benefit from any
person and/or entity in connection with any government contract or
project or by reason of the office or position of the public officer
concerned;
c) Plunder by the illegal or fraudulent conveyance or disposition of assets
belonging to the National Government or any of its subdivisions,
agencies, instrumentalities or government-owned or -controlled
corporations or their subsidiaries;
d) Plunder by obtaining, receiving or accepting, directly or indirectly, any
shares of stock, equity or any other form of interest or participation
including the promise of future employment in any business enterprise
or undertaking;
e) Plunder by establishing agricultural, industrial or commercial
monopolies or other combinations and/or implementation of decrees
and orders intended to benefit particular persons or special interests;
f) Plunder by taking undue advantage of official position, authority,
relationship, connection or influence to unjustly enrich himself or

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 themselves at the expense and to the damage and prejudice of the
Filipino people and the Republic of the Philippines;

5. Robbery and extortion under Articles 294, 295, 296, 299, 300, 301 and
302 of the Revised Penal Code, as amended;
a) Robbery with violence against or intimidation of persons;
b) Robbery with physical injuries, committed in an uninhabited place and
by a band, or with use of firearm on a street, road or alley;
c) Robbery in an inhabited house or public building or edifice devoted to
worship;
d) Robbery in an uninhabited place and by a band;
e) Robbery in an uninhabited place or in a private building;

6. Jueteng and Masiao punished as illegal gambling under Presidential Decree

No. 1602;

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

a) Piracy on the high seas;

b) Piracy in inland Philippine waters;
c) Aiding and abetting pirates and brigands;

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

9. Swindling under Article 315 and Other Forms of Swindling under Article
316 of the Revised Penal Code, as amended:

a) Estafa with unfaithfulness or abuse of confidence by:

(i) altering the substance, quantity or quality of anything of value
which the offender shall deliver by virtue of an obligation to do so,
even though such obligation be based on an immoral or illegal
consideration;
(ii) misappropriating or converting, to the prejudice of another, money,
goods or any other personal property received by the offender in
trust or on commission, or for administration, or under any other
obligation involving the duty to make delivery of or to return the
same, even though such obligation be totally or partially
guaranteed by a bond; or by denying having received such money,
goods, or other property;
(iii) taking undue advantage of the signature of the offended party in
blank, and by writing any document above such signature in blank,
to the prejudice of the offended party or of any third person;
b) Estafa by means of any of the following false pretenses or fraudulent
acts executed prior to or simultaneously with the commission of the
fraud by:
(i) using a fictitious name, or falsely pretending to possess power,
influence, qualifications, property, credit, agency, business or
imaginary transactions, or by means of other similar deceits;
(ii) altering the quality, fineness or weight of anything pertaining to
his art or business;
(iii) pretending to have bribed any Government employee;
(iv) postdating a check, or issuing a check in payment of an obligation
when the offender has no funds in the bank, or his funds

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 deposited therein were not sufficient to cover the amount of the
check;
(v) inducing another, by means of deceit, to sign any document;
(vi) resorting to some fraudulent practice to ensure success in a
gambling game;
(vii) removing, concealing or destroying, in whole or in part, any court
record, office files, document or any other papers;
c) Conveying, selling, encumbering or mortgaging any real property,
pretending to be the owner of the same;
d) Disposing of real property as free from encumbrance, although such
encumbrance be not recorded;
e) Wrongfully taking by the owner of his personal property from its lawful
possessor to the prejudice of the latter or any third person;
f) Executing any fictitious contract to the prejudice of another;
g) Accepting any compensation for services not rendered or for labor not
performed;
h) Selling, mortgaging or encumbering real property or properties with
which the offender guaranteed the fulfillment of his obligation as
surety without the express authority from the court or before the
cancellation of his bond or before being relieved from the obligation
contracted by him;

10. Smuggling under Republic Act No. 455 and under Republic Act No. 1937,
as amended, otherwise known as the Tariff and Customs Code of the
Philippines:

a) Unlawful importation - Fraudulently importing or bringing into the

Philippines, or assisting in so doing, any article, contrary to law, or
receiving, concealing, buying, selling or in any manner facilitating the
transportation, concealment or sale of such article after importation,
knowing the same to have been imported contrary to law; and
b) Various fraudulent practices against customs revenue - Making or
attempting to make any entry of imported or exported article by
means of any false or fraudulent invoice, declaration, affidavit, letter,
paper, or by means of any false statement, written or verbal, or by
means of any false or fraudulent practice whatsoever, or any willful act
or omission by means whereof the Government of the Republic of the
Philippines might be deprived of the lawful duties, taxes and other
charges, or any portion thereof, accruing from the article or any
portion thereof, embraced or referred to in such invoice, declaration,
affidavit, letter, paper, or statement, or affected by such act or
omission.

11. Violations under Republic Act No. 8792, otherwise known as the Electronic
Commerce Act of 2000:

a) Hacking or cracking, which refers to:

(i) unauthorized access into or interference in a computer
system/server or information and communication system;
(ii) any access in order to corrupt, alter, steal, or destroy using a
computer or other similar information and communication devices,
information and communications system, including the knowledge
and consent of the owner of the computer; or

12
 (iii) the introduction of computer viruses and the like, resulting in the
corruption, destruction, alteration, theft or loss of electronic data
messages or electronic document;
b) Piracy, which refers to:
(i) the unauthorized copying, reproduction;
(ii) the unauthorized dissemination, distribution;
(iii) the unauthorized importation;
(iv) the unauthorized use, removal, alteration, substitution,
modification;
(v) the unauthorized storage, uploading, downloading, communication,
making available to the public, or
(vi) the unauthorized broadcasting of protected material, electronic
signature or copyrighted works including legally protected sound
recordings or phonograms or information material on protected
works, through the use of telecommunication networks, such as,
but not limited to, the internet, in a manner that infringes
intellectual property rights;
c) Violations under Republic Act No. 7394, otherwise known as The
Consumer Act of the Philippines and other relevant or pertinent laws
through transactions covered by or using electronic data messages or
electronic documents.

12. Hijacking and other violations under Republic Act No. 6235, otherwise
known as the Anti-Hijacking Law; destructive arson and murder, as
defined under the Revised Penal Code, as amended:

a) Violations of RA No. 6235 -

(i) Compelling a change in the course or destination of an aircraft of
Philippine registry, or to seize or usurp the control thereof, while it
is in flight;
(ii) Compelling an aircraft of foreign registry to land in Philippine
territory, or to seize or usurp the control thereof while it is within
the said territory;
(iii) Shipping, loading or carrying in any passenger aircraft operating as
a public utility within the Philippines any explosive, flammable,
corrosive or poisonous substances or material;

b) Destructive arson committed by burning:

(i) One (1) or more building or edifice, consequent to one single act
of burning, or as a result of simultaneous burnings, or committed
on several or different occasions;
(ii) Any building of public or private ownership, devoted to the public
in general or where people usually gather or congregate for a
definite purpose;
(iii) Any train or locomotive, ship or vessel, airship or airplane,
devoted to transportation or conveyance, or for public use,
entertainment or leisure;
(iv) Any building, factory, warehouse installation and any
appurtenances thereto, which are devoted to the service of public
utilities;
(v) Any building the burning of which is for the purpose of concealing
or destroying evidence of another violation of law, or for the
purpose of concealing bankruptcy or defrauding creditors or to
collect from insurance;

13
 (vi) Any arsenal, shipyard, storehouse or military powder or fireworks
factory, ordinance, storehouse, archives or general museum of
the Government;
(vii) An inhabited place, any storehouse or factory of inflammable or
explosive materials;
c) Murder committed in consideration of a price, reward or promise;

13. Terrorism and conspiracy to commit terrorism as defined and penalized

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

a) Terrorism – an act punishable under any of the following provisions of

the Revised Penal Code:
(i) Violations of Article 122 (Piracy in General and Mutiny in the High
Seas or in the Philippine Waters)
(ii) Violation of Article 134 (Rebellion or Insurrection)
(iii) Violation of Article 134-a (Coup d’Etat), including acts committed
by private persons
(iv) Violations of Article 248 (Murder)
(v) Violation of Article 267 (Kidnapping and Serious Illegal Detention)
(vi) Violations of Article 324 (Crimes Involving Destruction)
(vii) Violations under Presidential Decree No. 1613 (The Law on Arson)
(viii) Violations under Republic Act No. 6969 (Toxic Substances and
Hazardous and Nuclear Waste Control Act of 1990)
(ix) Violations under Republic Act No. 5207 (Atomic Energy
Regulatory and Liability Act of 1968)
(x) Violations under Republic Act No. 6235 (Anti-Hijacking Law)
(xi) Violations of Presidential Decree No. 532 (Anti-Piracy and Anti-
Highway Robbery Law of 1974)
(xii) Presidential Decree No. 1866, as amended (Decree Codifying the
Laws on Illegal and Unlawful Possession, Manufacture, Dealing in,
Acquisition or Disposition of Firearms, Ammunitions or
Explosives)

- thereby sowing and creating a condition of widespread and extraordinary

fear and panic among the populace, in order to coerce the government to
give in to an unlawful demand;
b) Conspiracy to commit terrorism – There is conspiracy when two or
more persons come to an agreement concerning the commission of the
crime of terrorism as defined in item Section 3.14(13)(a);

14. Financing of Terrorism under Section 4 and offenses punishable under

Sections 5, 6, 7 and 8 of Republic Act No. 10168, otherwise known as the
Terrorism Financing Prevention and Suppression Act of 2012:

a) Directly or indirectly, willfully and, without lawful excuse, possessing,

providing, collecting or using property or funds or making 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: (a)
to carry out or facilitate the commission of any terrorist act; (b) by a
terrorist organization, association or group; or (c) by an individual
terrorist;
b) Organizing or directing others to commit financing of terrorism;

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 c) Attempt to commit the crimes of financing of terrorism and dealing
with property or funds of designated persons;
d) Conspiracy to commit the crimes of financing of terrorism and dealing
with property or funds of designated persons;
e) Cooperating, by previous or simultaneous acts, in the execution of
either the crime of financing of terrorism or conspiracy to commit the
crime of financing of terrorism;
f) Having knowledge of the commission of the crime of financing of
terrorism but without having participated therein as principal, taking
part subsequent to the commission of the crime of financing of
terrorism by profiting from it or by assisting the principal or principals
in the crime of financing of terrorism to profit by the effects of the
crime, or by concealing or destroying the effects of the crime in order
to prevent its discovery, or by harboring, concealing or assisting in the
escape of the principal in the crime of financing of terrorism;

15. Bribery under Articles 210, 211 and 211-A of the Revised Penal Code, as
amended, and Corruption of Public Officers under Article 212 of the
Revised Penal Code, as amended:

a) A public officer commits bribery by -

(i) Agreeing to perform an act constituting a crime, in connection with
the performance of his official duties, in consideration of any offer,
promise, gift or present received by such officer, personally or
through the mediation of another;
(ii) Accepting gifts offered to him by reason of his office;
(iii) Refraining from arresting or prosecuting an offender who has
committed a crime punishable by reclusion perpetua and/or death
in consideration of any offer, promise, gift or present;
b) Any person commits corruption of public officials by offering or
promising or giving the gifts or presents referred to in Articles 210,
211 and 211-A of the Revised Penal Code;

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

a) Frauds committed by any public officer against the public treasury and
similar offenses by:
(i) Entering into an agreement with any interested party or speculator
or making use of any other scheme, to defraud the Government
committed by a public official in his official capacity in dealing with
any person with regard to furnishing supplies, the making of
contracts, or the adjustment or settlement of accounts relating to
public property or funds;
(ii) Being entrusted with the collection of taxes, licenses, fees, and
other imposts:
1. Demanding, directly or indirectly, the payment of sums different
from or larger than those authorized by law;
2. Failing voluntarily to issue a receipt, as provided by law, for any
sum of money collected by him officially;
3. Collecting or receiving, directly or indirectly, by way of payment
or otherwise, things or objects of a nature different from that
provided by law;

15
 b) Frauds committed by any public officer, who, taking advantage of his
official position, committed any of the frauds or deceits enumerated in
Chapter Six, Title Ten, Book two of the Revised Penal Code;
c) Any appointive public officer, who, during his incumbency, shall
directly or indirectly become interested in any transaction of exchange
or speculation within the territory subject to his jurisdiction;
d) Any public officer who, directly or indirectly, shall become interested in
any contract or business in which it is his official duty to intervene;
e) Any expert, arbitrator and private accountants who, directly or
indirectly, shall take part in any contract or transaction connected with
the estate or property in appraisal, distribution or adjudication of which
they shall have acted, and to the guardians and executors with respect
to the property belonging to their wards or estate;

17. Malversation of Public Funds and Property under Articles 217 and 222 of
the Revised Penal Code, as amended:

Malversation is committed by:

a) A public officer who, by reason of the duties of his office, is

accountable for public funds or property by:
(i) Appropriating the public funds or property;
(ii) Taking or misappropriating public funds or property;
(iii) Consenting, through abandonment or negligence, or permitting
any other person to take such public funds or property;
(iv) Being otherwise guilty of the misappropriation or malversation of
public funds or property;
b) Any private individual who, in any capacity whatever, have charge of
national, provincial or municipal funds, revenues or property and by
any administrator or depository of funds or property attached, seized
or deposited by public authority, even if such property belongs to a
private individual.

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

a) Making and importing and uttering false coins;

b) Forging treasury or bank notes on other documents payable to bearer;
importing and uttering such false or forged notes and documents;
c) Counterfeiting, importing and uttering instruments not payable to
bearer;
d) Illegal possession and use of false treasury or bank notes and other
instruments of credit;
e) Forgery by giving to a treasury or bank note or any instrument payable
to bearer or to order mentioned therein, the appearance of a true and
genuine document;
f) Forgery by erasing, substituting, counterfeiting or altering by any
means the figures, letters, words or signs contained therein;
g) Manufacturing and possession of instruments or implements for
falsification;

19. Violations of Sections 4 to 6 of Republic Act No. 9208, otherwise known as

the Anti-Trafficking in Persons Act of 2003:

16
a) Recruiting, transporting, transferring, harboring, providing or receiving
a person by any means, including those done under the pretext of
domestic or overseas employment or training or apprenticeship, for the
purpose of prostitution, pornography, sexual exploitation, forced labor,
slavery, involuntary servitude or debt bondage;
b) Introducing or matching for money, profit or material, economic or
other consideration, any person or, as provided for under Republic Act
No. 6955, any Filipino woman to a foreign national, for marriage for
the purpose of acquiring, buying, offering, selling or trading him/her to
engage in prostitution, pornography, sexual exploitation, forced labor,
slavery, involuntary servitude or debt bondage;
c) Offering or contracting marriage, real or simulated, for the purpose of
acquiring, buying, offering, selling or trading them to engage in
prostitution, pornography, sexual exploitation, forced labor or slavery,
involuntary servitude or debt bondage;
d) Undertaking or organizing tours and travel plans consisting of tourism
packages or activities for the purpose of utilizing and offering persons
for prostitution, pornography or sexual exploitation;
e) Maintaining or hiring a person to engage in prostitution or
pornography;
f) Adopting or facilitating the adoption of persons for the purpose of
prostitution, pornography, sexual exploitation, forced labor, slavery,
involuntary servitude or debt bondage;
g) Recruiting, hiring, adopting, transporting or abducting a person, by
means of threat or use of force, fraud, deceit, violence, coercion, or
intimidation for the purpose of removal or sale of organs of said
person;
h) Recruiting, transporting or adopting a child to engage in armed
activities in the Philippines or abroad;
i) Knowingly leasing or subleasing, using or allowing to be used any
house, building or establishment for the purpose of promoting
trafficking in persons;
j) Producing, printing and issuing or distributing unissued, tampered or
fake counseling certificates, registration stickers and certificates of any
government agency which issues these certificates and stickers as
proof of compliance with government regulatory and pre-departure
requirements for the purpose of promoting trafficking in persons;
k) Advertising, publishing, printing, broadcasting or distributing, or
causing the advertisement, publication, printing, broadcasting or
distribution by any means, including the use of information technology
and the internet, of any brochure, flyer, or any propaganda material
that promotes trafficking in persons;
l) Assisting in the conduct of misrepresentation or fraud for purposes of
facilitating the acquisition of clearances and necessary exit documents
from government agencies that are mandated to provide pre-departure
registration and services for departing persons for the purpose of
promoting trafficking in persons;
m) Facilitating, assisting or helping in the exit and entry of persons from
/to the country at international and local airports, territorial boundaries
and seaports who are in possession of unissued, tampered or
fraudulent travel documents for the purpose of promoting trafficking in
persons;
n) Confiscating, concealing, or destroying the passport, travel documents,
or personal documents or belongings of trafficked persons in
furtherance of trafficking or to prevent them from leaving the country
or seeking redress from the government or appropriate agencies;

17
 o) Knowingly benefitting from, financial or otherwise, or making use of,
the labor or services of a person held to a condition of involuntary
servitude, forced labor, or slavery; and
p) Qualified trafficking in persons;

20. Violations of Sections 78 to 79 of Chapter IV of Presidential Decree No.

705, otherwise known as the Revised Forestry Code of the Philippines, as
amended:

a) Cutting, Gathering and/or collecting Timber, or Other Forest Products

Without License;
b) Unlawful Occupation or Destruction of Forest Lands and Grazing Lands;

21. Violations of Sections 86 to 106 of Chapter IV of Republic Act No. 8550,

otherwise known as the Philippine Fisheries Code of 1998:

a) Unauthorized fishing or engaging in other unauthorized fishing

activities;
b) Poaching in Philippine waters;
c) Fishing through explosives, noxious or poisonous substances and/or
electricity;
d) Use of fine mesh net;
e) Use of active gear in the municipal waters and bays and other fishery
management areas;
f) Coral exploitation and exportation;
g) Muro-Ami, other methods and gear destructive to coral reefs and other
marine habitat;
h) Illegal use of superlights;
i) Conversion of mangroves;
j) Fishing in overfished area and during closed season;
k) Fishing in fishery reserves, refuge and sanctuaries;
l) Fishing or taking of rare, threatened or endangered species;
m) Capture of sabalo and other breeders/spawners;
n) Exportation of breeders, spawners, eggs or fry;
o) Importation or exportation of fish or fishery species;
p) Violation of catch ceilings;
q) Aquatic pollution;
r) Failure to comply with minimum safety standards;
s) Failure to conduct a yearly report on all fishponds, fish pens and fish
cages;
t) Gathering and marketing of shell fishes;
u) Obstruction to navigation or flow and ebb of tide in any stream, river,
lake or bay;
v) Construction and operation of fish corrals/traps, fish pens and fish
cages;
w) Commercial fishing vessel operators employing unlicensed fisherfolk or
fishworker or crew;
x) Obstruction of defined migration paths;
y) Obstruction to fishery law enforcement officer;

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

18
 a) Knowingly presenting any false application, declaration or evidence to
the Government or publishing or causing to be published any
prospectus or other information containing any false statement relating
to mines, mining operations or mineral agreements, financial or
technical assistance agreements and permits;
b) Illegal exploration;
c) Theft of minerals;
d) Destruction of mining structures;
e) Mines arson;
f) Willful damage to a mine;
g) Illegal obstruction to permittees or contractors;
h) Other violations of the mining act and its implementing rules and
regulations;

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

a) Effecting the following acts in critical habitats:

b) Dumping of waste products detrimental to wildlife;
c) Squatting or otherwise occupying any portion of the critical habitat;
d) Mineral exploration and/or extraction;
e) Burning;
f) Logging;
g) Quarrying;
h) Trading of wildlife;
i) Collecting, hunting or possessing wildlife, their by-products and
derivatives;
j) Gathering or destroying of active nests, nest trees, host plants and
the like; and
k) Transporting of wildlife;

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

a) Gathering, collecting, possessing, consuming, selling, bartering or

exchanging or offering for sale without authority any cave resources;

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

a) Taking, with intent to gain, of a motor vehicle belonging to another

without the latter’s consent, or by means of violence against or
intimidation of persons, or by using force upon things;

19
 26. Violation of Sections 1, 3, and 5 1 of Presidential Decree No. 1866, as
amended, otherwise known as the decree Codifying the Laws on
Illegal/Unlawful Possession, Manufacture, Dealing In, Acquisition or
Disposition of Firearms, Ammunition or Explosives:

a) Unlawful manufacture, sale, acquisition, disposition or possession of

firearms or ammunition or instruments used or intended to be used in
the manufacture of firearms or ammunition;
b) Unlawful manufacture, sales, acquisition, disposition or possession of
explosives;
c) Tampering of firearm’s serial number;

27. Violation of Presidential Decree No. 1612, otherwise known as the Anti-
Fencing Law:

a) Buying, receiving, possessing, keeping, acquiring, concealing, selling or

disposing of, or buying and selling, or in any manner dealing in any
article, item, object or anything of value which a person knows, or
should be known to him, to have been derived from the proceeds of
the crime of robbery or theft;

28. Violation of Section 6 of Republic Act No. 8042, otherwise known as the
Migrant Workers and Overseas Filipinos Act of 1995, as amended by
Republic Act No. 10022:

a) Illegal recruitment by any act of canvassing, enlisting, contracting,

transporting, utilizing, hiring or procuring workers and referring,
contract services, promising or advertising for employment abroad,
whether for profit or not, when undertaken by non-licensee or non-
holder of authority contemplated under the Labor Code of the
Philippines, as amended;
b) Illegal recruitment is committed by any person, whether a non-
licensee, non-holder, licensee or holder of authority by -
(i) Charging or accepting, directly or indirectly, any amount greater
than that specified in the schedule of allowable fees prescribed by
the Secretary of Labor and Employment, or to make a worker pay
or acknowledge any amount greater than that actually received
by him as a loan or advance;
1
Sec. 1 and 5 has been expressly repealed by RA 10591 (May 29, 2013) and all laws inconsistent with it (Sec. 45 - repealing clause)
effectively repealing also coverage by the AMLA of Sec. 1 and 5. There are similar provisions under Sec. 32 and 34 of RA 10591 (new
provisions, not amendatory to Sec. 1 and 5 of PD 1866). In effect the following are still unlawful activities:

1. Unlawful acquisition or possession of firearms and ammunition (Sec. 28, R.A. No. 10591);
2. Unlawful manufacture, sale or disposition of the following:
a. Firearms;
b. Ammunition;
c. Parts of firearms or ammunition; and/or
d. Machinery, tool or instrument to be used or intended to be used in the manufacture of firearms and
ammunition (Sec. 32, R.A. No. 10591);
3. Unlawful manufacture, sale, acquisition, disposition or possession of explosives (Sec. 3, P.D. No. 1866); and
4. Tampering, obliterating or altering the serial number of any firearm (Sec. 34, R.A. No. 10591).

While the following are now decriminalized:

1. Unlawful possession and acquisition of machinery, tool or instrument used or intended to be used in
the manufacture of firearms and ammunitions. (Sec. 1, P.D. No. 1866)
2. Unauthorized defacing of the serial number of any firearm. (Sec. 5, P.D. No. 1866)]

20
 (ii) Furnishing or publishing any false notice or information or
document in relation to recruitment or employment;
(iii) Giving any false notice, testimony, information or document or
commit any act of misrepresentation for the purpose of securing
a license or authority under the Labor Code, or for the purpose of
documenting hired workers with the POEA, which include the act
of reprocessing workers through a job order that pertains to
nonexistent work, work different from the actual overseas work,
or work with a different employer whether registered or not with
the POEA;
(iv) Including or attempting to induce a worker already employed to
quit his employment in order to offer him another unless the
transfer is designed to liberate a worker from oppressive terms
and conditions of employment;
(v) Influencing or attempting to influence any person or entity not to
employ any worker who has not applied for employment through
his agency or who has formed, joined or supported, or has
contacted or is supported by any union or workers’ organization;
(vi) Engaging in the recruitment or placement of workers in jobs
harmful to public health or morality or to the dignity of the
Republic of the Philippines;
(vii) Failing to submit reports on the status of employment, placement
vacancies, remittance of foreign exchange earnings, separation
from jobs, departures and such other matters or information as
may be required by the Secretary of Labor and Employment;
(viii) Substituting or altering to the prejudice of the worker,
employment contracts approved and verified by the Department
of Labor and Employment from the time of actual signing thereof
by the parties up to and including the period of the expiration of
the same without the approval of the Department of Labor and
Employment;
(ix) For an officer or agent of a recruitment or placement agency to
become an officer or member of the Board of any corporation
engaged in travel agency or to be engaged directly or indirectly in
the management of travel agency;
(x) Withholding or denying travel documents from applicant workers
before departure for monetary or financial considerations, or for
any other reasons, other than those authorized under the Labor
Code and its implementing rules and regulations;
(xi) Failing to actually deploy a contracted worker without valid
reason as determined by the Department of Labor and
Employment;
(xii) Failing to reimburse expenses incurred by the worker in
connection with his documentation and processing for purposes of
deployment, in cases where the deployment does not actually
take place without the worker’s fault. Illegal recruitment when
committed by a syndicate or in large scale shall be considered an
offense involving economic sabotage; and
(xiii) Allowing a non-Filipino citizen to head or manage a licensed
recruitment/manning agency;

29. Violation of Republic Act No. 8293, otherwise known as the Intellectual
Property Code of the Philippines, as amended:

a) Violation of the Law on Patents –

21
 (i) Repetition of infringement;
b) Violation of the Law on Trademarks, Service Marks and Trade Names –
(i) Infringement;
(ii) Unfair competition;
(iii) False designation of origin; false description or representation;
c) Violation of the Law on Copyright –
(i) Infringement;

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

a) Taking of photo or video coverage of a person or group of persons

performing sexual act or any similar activity or to capturing an image
of the private area of a person(s) such as the naked or undergarment
clad genitals, pubic area, buttocks or female breast without the
consent of the person(s) involved and under circumstances in which
the person(s) has/have a reasonable expectation of privacy;
b) Copying or reproducing, or causing to be copied or reproduced, such
photo or video or recording of sexual act or any similar activity with or
without consideration;
c) Selling or distributing, or causing to be sold or distributed, such photo
or video or recording of sexual act, whether it be the original copy or
reproduction thereof;
d) Publishing or broadcasting, or causing to be published or broadcast,
whether in print or broadcast media, or showing or exhibiting the
photo or video coverage or recordings of such sexual act or any similar
activity through VCD/DVD, internet, cellular phones and other similar
means or device;

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

a) Hiring, employing, using, persuading, inducing or coercing a child to

perform in the creation or production of any form of child pornography;
b) Producing, directing, manufacturing or creating any form of child
pornography;
c) Publishing, offering, transmitting, selling, distributing, broadcasting,
advertising, promoting, exporting or importing any form of child
pornography;
d) Possessing any form of child pornography with the intent to sell,
distribute, publish, or broadcast;
e) Knowingly, willfully and intentionally providing a venue for the
commission of prohibited acts as, but not limited to, dens, private
rooms, cubicles, cinemas, houses or in establishments purporting to be
a legitimate business;
f) For film distributors, theaters and telecommunication companies, by
themselves or in cooperation with other entities, distributing any form
of child pornography;
g) For a parent, legal guardian or person having custody or control of a
child to knowingly permit the child to engage, participate or assist in
any form of child pornography;
h) Engaging in the luring or grooming of a child;
i) Engaging in pandering of any form of child pornography;
j) Willfully accessing any form of child pornography;

22
 k) Conspiring to commit any of the prohibited acts of child pornography;
and
l) Possessing any form of child pornography;

32. Violations of Sections 5, 7, 8, 9, 10 (c), (d) and (e), 11, 12 and 14 of

Republic Act No. 7610, otherwise known as the Special Protection of
Children Against Abuse, Exploitation and Discrimination:

a) Engaging in or promoting, facilitating or inducing child prostitution;

b) Committing the act of sexual intercourse or lascivious conduct with a
child exploited in prostitution or subject to other sexual abuse;
c) Deriving profit or advantage, whether as manager or owner of the
establishment where the prostitution takes place, or of the sauna,
disco, bar, resort, place of entertainment or establishment serving as a
cover or which engages in prostitution in addition to the activity for
which the license has been issued to said establishment;
d) Engaging in trading and dealing with children including, but not limited
to the act of buying and selling of a child for money, or for any other
consideration, or barter;
e) Attempt to commit child trafficking;
f) Hiring, employing, using, persuading, inducing or coercing a child to
perform in obscene exhibitions and indecent shows, whether live or in
video, or model in obscene publications or pornographic materials or to
sell or distribute the said materials;
g) Inducing, delivering or offering a minor to any one prohibited by
Republic Act No. 7610 to keep or have in his company a minor;
h) Any person, owner, manger or one entrusted with the operation of any
public or private place of accommodation, whether for occupancy,
food, drink or otherwise, including residential places, who allows any
person to take along with him to such place or places any minor;
i) Using, coercing, forcing or intimidating a street child or any other child
to:
(i) Beg or use begging as a means of living;
(ii) Act as conduit or middlemen in drug trafficking or pushing; or
(iii) Conduct any illegal activities;
j) Establishments or enterprises promoting, facilitating, or conducting
activities constituting child prostitution and other sexual abuse, child
trafficking, obscene publications and indecent shows, and other acts of
abuse; and
k) Employment of children except as otherwise provided by law;

33. Fraudulent practices and other violations under Republic Act No. 8799,
otherwise known as the Securities Regulation Code of 2000:

a) Sale, offer or distribution of securities within the Philippines without a

registration statement duly filed with and approved by the SEC;
b) Violation of reportorial requirements imposed upon issuers of
securities;
c) Manipulation of security prices by creating a false or misleading
appearance of active trading in any listed security traded in an
Exchange or any other trading market;
d) Manipulation of security prices by effecting, alone or with others, a
series of transactions in securities that raises their prices to induce the
purchase of a security, whether of the same or different class, of the

23
 same issuer or of a controlling, controlled or commonly controlled
company by others;
e) Manipulation of security prices by effecting, alone or with others, a
series of transactions in securities that depresses their price to induce
the sale of a security, whether of the same or different class, of the
same issuer or of a controlling, controlled or commonly controlled
company by others;
f) Manipulation of security prices by effecting, alone or with others, a
series of transactions in securities that creates active trading to induce
such a purchase or sale though manipulative devices such as marking
the close, painting the tape, squeezing the float, hype and dump,
boiler room operations and such other similar devices;
g) Manipulation of security prices by circulating or disseminating
information that the price of any security listed in an Exchange will or
is likely to rise or fall because of manipulative market operations of
any one or more persons conducted for the purpose of raising or
depressing the price of the security for the purpose of inducing the
purchase or sale of such security;
h) Manipulation of security prices by making false or misleading
statements with respect to any material fact, which he knew or had
reasonable ground to believe was so false and misleading, for the
purpose of inducing the purchase or sale of any security listed or
traded in an Exchange;
i) Manipulation of security prices by effecting, alone or with others, any
series of transactions for the purchase and/or sale of any security
traded in an Exchange for the purpose of pegging, fixing or stabilizing
the price of such security, unless otherwise allowed by the Securities
Regulation Code or by the rules of the SEC;
j) Sale or purchase of any security using any manipulative deceptive
device or contrivance;
k) Execution of short sales or stop-loss order in connection with the
purchase or sale of any security not in accordance with such rules and
regulations as the SEC may prescribe as necessary and appropriate in
the public interest or the protection of the investors;
l) Employment of any device, scheme or artifice to defraud in connection
with the purchase and sale of any securities;
m) Obtaining money or property in connection with the purchase and sale
of any security by means of any untrue statement of a material fact or
any omission to state a material fact necessary in order to make the
statements made, in the light of the circumstances under which they
were made, not misleading;
n) Engaging in any act, transaction, practice or course of action in the
sale and purchase of any security which operates or would operate as
a fraud or deceit upon any person;
o) Insider trading;
p) Engaging in the business of buying and selling securities in the
Philippines as a broker or dealer, or acting as a salesman, or an
associated person of any broker or dealer without any registration from
the Commission;
q) Employment by a broker or dealer of any salesman or associated
person or by an issuer of any salesman, not registered with the SEC;
r) Effecting any transaction in any security, or reporting such transaction,
in an Exchange or using the facility of an Exchange which is not
registered with the SEC;
s) Making use of the facility of a clearing agency which is not registered
with the SEC;

24
 t) Violations of margin requirements;
u) Violations on the restrictions on borrowings by members, brokers and
dealers;
v) Aiding and Abetting in any violations of the Securities Regulation Code;
w) Hindering, obstructing or delaying the filing of any document required
under the Securities Regulation Code or the rules and regulations of
the SEC;
x) Violations of any of the provisions of the implementing rules and
regulations of the SEC;
y) Any other violations of any of the provisions of the Securities
Regulation Code;

34. Felonies or offenses of a similar nature to the aforementioned unlawful

activities that are punishable under the penal laws of other countries.

In determining whether or not a felony or offense punishable under the

penal laws of other countries is “of a similar nature”, as to constitute an
unlawful activity under the AMLA, as amended, the nomenclature of said
felony or offense need not be identical to any of the unlawful activities listed
under Section 3.13.

RULE IV - MONEY LAUNDERING

Section 4.Money Laundering Offense.– Money laundering is committed by any

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

a) transacts said monetary instrument or property;

b) converts, transfers, disposes of, moves, acquires, possesses or uses said
monetary instrument or property;
c) conceals or disguises the true nature, source, location, disposition,
movement or ownership of or rights with respect to said monetary
instrument or property;
d) attempts or conspires to commit money laundering offenses referred to in
paragraphs (a), (b) or (c);
e) aids, abets, assists in or counsels the commission of the money laundering
offenses referred to in paragraphs (a), (b) or (c) above; and
f) performs or fails to perform any act as a result of which he facilitates the
offense of money laundering referred to in paragraphs (a), (b) or (c)
above.

Money laundering is also committed by any covered person who, knowing that a
covered or suspicious transaction is required under the AMLA, as amended, to be
reported to the Anti-Money Laundering Council (AMLC), fails to do so. (a)

RULE V- JURISDICTION

Section 5. Jurisdiction in Money Laundering Cases. -

25
The Regional Trial Courts shall have the jurisdiction to try all cases on money laundering.
Those committed by public officers and private persons who are in conspiracy with such
public officers shall be under the jurisdiction of the Sandiganbayan.

RULE VI – PROSECUTION

Section 6. Prosecution of Money Laundering.

6.1. Parties and Proceedings -

a) Any person may be charged with and convicted of both the offense of
money laundering and the unlawful activity as defined under Section 3.i of
the AMLA, as amended.
b) The prosecution of any offense or violation under the AMLA, as amended,
shall proceed independently of any proceeding relating to the unlawful
activity. (n)

6.2. Complaint for money laundering -When the AMLC finds, after investigation,
that there is probable cause to charge any person with a money laundering
offense under Section 4 of the AMLA, as amended, it shall cause a complaint to
be filed, pursuant to Section 7 (4) of the AMLA, as amended, before the
Department of Justice or the Office of the Ombudsman, which shall then
conduct the preliminary investigation of the case.

6.3. Information -If after due notice and hearing in the preliminary investigation
proceedings, the Department of Justice, or the Office of the Ombudsman, as the
case may be, finds probable cause for a money laundering offense, it shall file
the necessary information before the Regional Trial Courts or the
Sandiganbayan.

6.4. Trial - Trial for the money laundering offense shall proceed in accordance with
the Revised Rules of Criminal Procedures or the Revised Internal Rules of the
Sandiganbayan, as the case may be. (a)

6.5. Proof of Knowledge - Knowledge of the offender that any monetary

instrument or property represents, involves, or relates to the proceeds of an
unlawful activity or that any monetary instrument or property is required under
the AMLA, as amended, to be disclosed and filed with the AMLC, may be
established by direct evidence or inferred from the attendant circumstances.

6.6. Elements of money laundering to be proven beyond reasonable doubt -

All the elements of every money laundering offense under Section 4 of the
AMLA, as amended, must be proved by evidence beyond reasonable doubt,

6.7. Unlawful activity - No element of the unlawful activity, however, including the
identity of the perpetrators and the details of the actual commission of the
unlawful activity need be established by proof beyond reasonable doubt. The
elements of the offense of money laundering are separate and distinct from the
elements of the felony or offense constituting the unlawful activity.

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 RULE VII - CREATION OF THE
ANTI-MONEY LAUNDERING COUNCIL (AMLC)

Section 7.The Anti-Money Laundering Council. –

7.1. Composition - The Anti-Money Laundering Council is hereby created and shall
be composed of the Governor of the Bangko Sentral ng Pilipinas as Chairperson,
the Commissioner of the Insurance Commission and the Chairperson of the
Securities and Exchange Commission as Members.

7.2. Unanimous Decision - The AMLC shall act unanimously in discharging its
functions as defined in the AMLA, as amended, and in these Rules. However, in
the case of the incapacity, absence or disability of any member to discharge his
functions, the officer duly designated or authorized to discharge the functions of
the Governor of the BSP, the Chairperson of the SEC or the Insurance
Commissioner, as the case may be, shall act in his stead in the AMLC.

7.3. Functions - The functions of the AMLC are defined hereunder:

1) to require and receive covered or suspicious transaction reports from
covered persons;
2) to issue orders addressed to the appropriate Supervising Authority or the
covered person to determine the true identity of the owner of any
monetary instrument or property subject of a covered or suspicious
transaction report, or request for assistance from a foreign State, or
believed by the Council, on the basis of substantial evidence, to be, in
whole or in part, wherever located, representing, involving, or related to,
directly or indirectly, in any manner or by any means, the proceeds of
any unlawful activity;
3) to investigate suspicious transactions and covered transactions deemed
suspicious after an investigation by the AMLC, money laundering
activities and other violations of the AMLA, as amended. In the conduct
of its investigation, the AMLC may:
(i) access all necessary documents and information, except in cases
where a court order is necessary for the conduct of inquiry into or
examination of transactions, deposits or investments, including the
related accounts;
(ii) take witness statements; (n)
(iii) use a wide range of investigative techniques suitable for the
investigation of money laundering and other violations of the AMLA,
as amended; and(n)
(iv) request relevant documents and information from domestic
government agencies, foreign states, its financial intelligence unit,
law enforcement agency/ies, and financial regulators, or the United
Nations and other international organizations or entities.
4) to file with the Court of Appeals, ex-parte, through the Office of the
Solicitor General:
(i) a petition for the freezing of any monetary instrument or property
that is in any way related to an unlawful activity as defined in Section
3.13 hereof;(n)
(ii) an application for authority to inquire into or examine any particular
deposit or investment, including related accounts, with any banking
institution or non-bank financial institution;

27
5) to institute civil forfeiture proceedings and all other remedial proceedings
through the Office of the Solicitor General;
6) to file complaints with the Department of Justice or the Office of the
Ombudsman for the prosecution of money laundering offenses and other
violations under the AMLA, as amended;
7) to formulate and implement such measures as may be inherent,
necessary, implied, incidental and justified under the AMLA, as amended,
to counteract money laundering, which may include the exercise of
visitorial powers, examination and audit to ensure compliance of covered
persons with the AMLA, as amended, these Rules and pertinent
resolutions and directives issued by the AMLC. Subject to such
limitations provided by law, the AMLC is authorized under Section 7 (7)
of the AMLA, as amended, to establish an information sharing system
that will enable the AMLC to store, track, analyze and investigate money
laundering transactions and to disseminate results of its analysis and
investigation to competent authorities for the resolute prevention,
detection and prosecution of money laundering offenses and other
violations of the AMLA, as amended. For this purpose, the AMLC shall
install a computerized system that will be used in the creation and
maintenance of an information database.(second sentence, item 7, Old
Rules)
8) to receive and take action in respect of any request from foreign states
for assistance in their own anti-money laundering operations as provided
in the AMLA, as amended, subject to the requirements under Section 15
hereof.
9) to develop educational programs including awareness campaign on the
pernicious effects, the methods and techniques used and the viable
means of preventing money laundering and the effective ways of
prosecuting and punishing offenders;
10) to enlist the assistance of any branch, department, bureau, office,
agency or instrumentality of the government, including government-
owned and -controlled corporations, in undertaking any and all anti-
money laundering operations, which may include the use of its
personnel, facilities and resources for the more resolute prevention,
detection and investigation of money laundering offenses and
prosecution of offenders. The AMLC may require the intelligence units of
the Armed Forces of the Philippines, the Philippine National Police, the
Department of Finance, the Department of Justice, as well as their
attached agencies, and other domestic or transnational governmental or
non-governmental organizations or groups to divulge to the AMLC all
information that may, in any way, facilitate the resolute prevention,
investigation and prosecution of money laundering offenses and other
violations of the AMLA, as amended, and other relevant laws and
regulations;
11) to require the Land Registration Authority and all its Registries of Deeds
to submit to the AMLC, reports on all real estate transactions involving
an amount in excess of Five hundred thousand pesos (P500,000.00)
within fifteen (15) days from the date of registration of the transaction,
in a form to be prescribed by the AMLC. The AMLC may also require the
Land Registration Authority and all its Registries of Deeds to submit
copies of relevant documents of all real estate transactions.(n)
12) to issue and implement rules, regulations, orders and resolutions as may
be necessary and appropriate to effectively implement the AMLA, as
amended, and other relevant laws and regulations; (item 11, Old Rules)
13) to impose administrative sanctions pursuant to Section 16.5. for the
violation of laws, rules, regulations, orders and resolutions issued

28
 pursuant thereto, as may be determined by the AMLC; and (item 12, Old
Rules)

7.4. Meetings- The AMLC shall meet once a month, or as may be necessary at the
call of the Chairperson.

RULE VIII - CREATION OF A SECRETARIAT

Section 8. The Anti-Money Laundering Council Secretariat. - The Council shall be

assisted by the AMLC Secretariat in the discharge of its functions.

8.1. The Executive Director -The Secretariat shall be headed by an Executive

Director who shall be appointed by the AMLC for a term of five (5) years. He
must be a member of the Philippine Bar, at least thirty-five (35) years of age,
must have served for at least five (5) years either at the BSP, the SEC or the IC
and of good moral character, unquestionable integrity and known probity. He
shall be considered a full-time permanent employee of the BSP with the rank of
Assistant Governor, and shall be entitled to such benefits and subject to rules
and regulations, as well as prohibitions, as are applicable to officers of similar
rank.

8.2. Composition - In organizing the Secretariat, the AMLC may choose from those
who have served, continuously or cumulatively, for at least five (5) years in the
BSP, the SEC or the IC. All members of the Secretariat shall be considered
regular employees of the BSP and shall be entitled to such benefits and subject
to such rules and regulations as are applicable to BSP employees of similar
rank.

8.3. Detail and Secondment - The AMLC is authorized under Section 7(10) of the
AMLA, as amended, to enlist the assistance of the BSP, the SEC or the IC, or
any other branch, department, bureau, office, agency or instrumentality of the
government, including government-owned and controlled corporations, in
undertaking any and all anti-money laundering operations. This includes the use
of any member of their personnel who may be detailed or seconded to the
AMLC, subject to existing laws and Civil Service Rules and Regulations. Detailed
personnel shall continue to receive their salaries, benefits and emoluments from
their respective mother units. Seconded personnel shall receive, in lieu of their
respective compensation packages from their respective mother units, the
salaries, emoluments and all other benefits which their AMLC Secretariat
positions are entitled to.

8.4. Information Security and Confidentiality –The AMLC and its Secretariat
shall securely protect information received or processed and shall not reveal, in
any manner, any information known to them by reason of their office. This
prohibition shall apply even after their separation from the AMLC.

The AMLC shall formulate rules governing information exchange and

dissemination, the security and confidentiality of such information, including
procedures for handling, storage, and protection of, as well as access to such
information. (n)

RULE IX - PREVENTIVE MEASURES

Section 9. Prevention of Money Laundering. -General Requirements for Customer

due diligence, Record Keeping, and Reporting

29
9.1. Customer Identification and Verification. Covered persons shall establish
and record the true identity of its clients based on official documents. They
shall maintain a system of verifying the true identity of their clients and, in case
of corporate clients, require a system of verifying their legal existence and
organizational structure, as well as the authority and identification of all persons
purporting to act on their behalf. Covered persons shall establish appropriate
systems and methods based on internationally compliant standards and
adequate internal controls for verifying and recording the true and full identity
of their customers. (Rule 9.a.1, Old Rules)

9.1.1. Prohibition against opening of Accounts without Face-to-face

Contact. No new account shall be opened and created by any covered
person without face-to-face contact with their client, except under the
following circumstances : (Rule 9.a.7, Old Rules)

a) Outsourcing of the Conduct of Face-to-Face Contact. Subject

to the rules promulgated for the purpose by the Supervising
Authorities, a covered person may outsource to a counter-party the
conduct of the requisite face-to-face contact. Provided that the
ultimate responsibility for identifying the customer shall lie with the
covered person. (Rule 9.a.10, Old Rules)

The covered person shall ensure that the employees or

representatives of the counter-party responsible for the face-to-face
contact undergo similar training program as that of its own
employees.

b) Third party reliance. Subject to the rules promulgated for the

purpose by the Supervising Authorities, where a third party has
already conducted the requisite face-to-face contact and the
identification requirements on its own customer in accordance with
these Rules and its own Money Laundering and Terrorist Financing
Prevention Program, a covered person may rely on the
representation of the third party that it has already undertaken said
face-to-face contact and customer identification requirements. (Rule
9.a.11, Old Rules) (a)

Notwithstanding the above, the ultimate responsibility for identifying

and establishing the full and true identity of the customer remains
with the Covered Person relying on the third party.

Provided that, in cases where the customer is assessed as high risk

by the third party, the covered person shall conduct its separate
enhanced due diligence procedure.

“Third Party” shall refer to (a) covered persons as defined under

the AMLA, as amended, and these Rules, or (b) a financial institution
or designated non-financial business and profession operating outside
of the Philippines that is covered by equivalent customer
identification requirements.(n)

b.1 Where the Customer Transacts Through a Trustee,

Nominee, Agent or Intermediary which is a Third Party.
A covered person may rely on the customer identification

30
 process undertaken by a third party subject to the rules on
Third Party reliance to be promulgated by the Supervising
Authorities; Provided that, in cases where the customer is
assessed as high risk by the third party, the covered person
shall conduct its separate enhanced due diligence procedure.
(Rule 9.a.14, Old Rules) (a)

c) Information and Communication Technology (ICT) assisted

face-to-face interview – Subject to the rules promulgated for the
purpose by the Supervising Authority, a face-to-face interview
through the use of ICT, such as, but not limited to, Voice over
Internet Protocol (VoIP), Peer to Peer (P2P), Integrated Services
Digital Network (ISDN), may be allowed to give individuals more
access to services being provided by covered persons, provided that
the covered person is in possession of and has verified the
identification documents submitted by the prospective client prior to
the interview and that the entire process/procedure is documented.
(n)

9.1.2. Minimum Information/Documents Required for Individual

Customers - Covered persons shall require customers to produce original
documents of identity issued by an official authority, bearing a photograph
of the customer. Examples of such documents are identity cards and
passports. Subject to the rules promulgated for the purpose by the
Supervising Authorities, the following information and those that will be
required by the latter shall be obtained from individual customers and
authorized signatory/ies of corporate and juridical entities:

a) Name;
b) Name/s of beneficial owner/s, if applicable;
c) Present address;
d) Permanent address;
e) Date and place of birth;
f) Contact numbers;
g) Nationality;
h) Nature of work and name of employer or nature of self-
employment/business;
i) Specimen signature (if required);
j) Social Security System or Government System Insurance Service
Number, and Tax Identification Number (if any)
k) Purpose;
l) Source of funds or property; and
m) Beneficiaries in case of insurance contracts, whenever applicable.

9.1.3.1 Valid Identification Documents - Customers and the

authorized signatory/ies of a corporate or juridical entity who
engage in a transaction with a covered person for the first time
shall be required to present the original and submit a clear copy of
at least one (1) valid Identification (ID) Card/Document issued by
an official authority.

For this purpose, the term official authority shall refer to any of the
following:

31
 a) Government of the Republic of the Philippines;
b) Its political subdivisions and instrumentalities;
c) Government-Owned or -Controlled Corporations (GOCCs); and
d) Covered persons registered with or supervised or regulated
either by the BSP, SEC or IC.

In case the ID Card/Document does not bear any photo of the

customer or authorized signatory/iesof a corporate or juridical
entity or the photo bearing ID/Document or a copy thereof does
not clearly show the face of the customer or authorized signatory, a
covered person may utilize its own technology to take the photo of
the customer or authorized signatory.

Where the customer or authorized signatory is a foreign national,

covered persons should require said foreign national to present
his/her passport or Alien Certificate of Registration issued by the
Bureau of Immigration. (n)

9.1.3. Minimum Information/Documents Required for Corporate and

Juridical Entities or Single Proprietorships - The following minimum
information/documents and those that will be required by the Supervising
Authorities shall be obtained from customers that are corporate or juridical
entities, single proprietorship, including shell companies and corporations
which have no business substance in their own right but through which
financial transactions may be conducted, to ensure that the customer has
not been dissolved or is not in the process of dissolution or winding up or
that its business or operations has not been terminated:

a) Certificates of Registration issued by the Department of Trade and

Industry (DTI) for single proprietors, or by the Securities and
Exchange Commission for corporations and partnerships, and by the
BSP for money changers/foreign exchange dealers and remittance
agents;
b) Articles of Incorporation/Partnership and by-laws;
c) Latest General Information Sheet which lists the names of
directors/trustees/partners, principal stock holders owning at least
twenty percent (20%) of the outstanding capital stock and primary
officers such as the President and Treasurer;
d) Names of beneficial owners and beneficiaries of the corporate and/or
juridical entities;

Beneficial owners shall refer to any individual, who, directly or

indirectly, through any contract, arrangement, understanding,
relationship or otherwise, owns 25 percent or more of the equity
interests of a juridical entity customer and/or an individual with
significant responsibility to control, manage, or direct a legal entity
customer, including:

(i) An executive officer or senior manager (e.g., a Chief Executive

Officer, Chief Financial Officer, Chief Operating Officer, Managing
Member, General Partner, President, Vice President, or Treasurer); or
(ii) Any other individual who regularly performs similar functions.(n)

e) Board or Partners’ resolution duly certified by the Corporate/Partners’

Secretary authorizing the signatory to sign on behalf of the entity;

32
 f) For entities registered outside of the Philippines, similar documents
and/or information shall be obtained duly authenticated by a senior
officer of the covered person assigned in the country of registration, in
the absence of said officer, the documents should be authenticated by
the Philippine Consulate, company register or notary public, where said
entities are registered.

Dealings with shell companies and corporations, being legal entities which
have no business substance in their own right but through which
transactions may be conducted, should be undertaken with extreme
caution. (Rule 9.a.5, Old Rules)

9.1.4. Outsourcing of the gathering of minimum information and/or

documents - Subject to the rules promulgated for the purpose by the
Supervising Authorities, a covered person may outsource to a counter-
party the gathering of the minimum information and/or documents
required to be obtained by these Rules provided that the ultimate
responsibility for knowing the customer and for keeping the identification
documents shall lie with the covered person. The covered person
outsourcing the activity shall likewise ensure that the employees or
representatives of the counter-party establishing the true and full identity
of the customer undergo equivalent training program as that of the
covered person’s own employees undertaking a similar activity. (Rule
9.a.12, Old Rules).

9.1.5. Prohibition against Certain Accounts - Covered persons shall maintain

customers’ account only in the true and full name of the account owner/s
or holder/s. The provisions of existing laws to the contrary
notwithstanding, anonymous accounts, accounts under fictitious names,
and all other similar accounts shall be absolutely prohibited. (Rule 9.a.6,
Old Rules)

9.1.6. Shell Company/Shell Bank/ Bearer Share Entities - A covered person

shall undertake business/banking relationship with a shell company with
extreme caution and always apply enhanced customer due diligence under
Section 9.1.9.2 on both the entity and its beneficial owners.

No shell bank shall be allowed to operate or be established in the

Philippines. A covered person shall refuse to deal, or enter into, or
continue, correspondent banking relationship with them. It shall likewise
guard against establishing relations with foreign financial institutions that
permit their accounts to be used by shell banks.(Rule 9.a.19, Old Rules)

A covered person dealing with bearer share entities shall be required to

conduct enhanced due diligence on said entity and its existing stockholders
and/or beneficial owners at the time of opening of the account. These
entities shall undergo on-going monitoring at all times and the list of
stockholders and/or beneficial owners shall be updated within thirty (30)
days after every transfer of ownership and the appropriate enhanced due
diligence applied to the new stockholders and/or beneficial owners. (n)

9.1.7. Ongoing monitoring of customers, accounts and transactions - A

covered person shall, on the basis of materiality and risk, update, no later
than once in every three (3) years, unless a different period is imposed by
the Supervising Authority, all identification information and documents of

33
 existing customers required to be obtained under the AMLA, as amended,
and these Rules.

A covered person shall establish a system that will enable it to understand

the normal and reasonable account or business activity of customers and
to detect unusual or suspicious patterns of account or business activity. A
risk-and-materiality based ongoing monitoring of customers’ accounts and
transactions shall be part of a covered person’s customer due diligence
procedures to ensure that the customers’ accounts and transactions are
consistent with the covered person’s knowledge of their customer, the
latter’s commercial activities, risk profile, and the source of funds,
whenever required. (Rule 9.a.15, Old Rules)(a)

9.1.8. Risk-based Customer Identification and Acceptance Process – All

covered person shall develop clear, written and graduated customer
acceptance policies and procedures including a set of criteria for customers
that are likely to pose low, normal or high risk to their operations as well
as the standards in applying reduced, normal and enhanced customer due
diligence including a set of conditions for the denial of account opening or
services.

Covered Persons, in pursuing these Rules, shall ensure that the financially
or socially disadvantaged are not denied access to financial services while
at the same time prevent suspicious individuals or entities from opening
an account. (a)

9.1.9. Standards of Customer Due Diligence – Unless a different rule is

promulgated by the Supervisory Authority for the purpose, covered
persons shall apply the appropriate due diligence measure (normal,
reduced, enhanced) depending on the result of the ML/TF customer risk
assessment:

9.1.10.1. Normal due diligence procedure – Covered persons

should undertake the following measures for customers assessed
to have a normal (average) ML/TF risk based on their ML/TF
customer risk rating system:

a) Conduct simplified validation procedure by:

(i) Confirming the documents submitted from a duly

authenticated official document;
(ii) Determining the authenticity of the identification
documents through validation of its issuance by
requesting a certification from the issuing authority or by
any other means;
(iii) Verifying the permanent address through evaluation of
utility bills, bank or credit card statement or other
documents showing permanent address or through on-
site visitation; and
(iv) Contacting the customer by phone, email or letter
(‘thank you letter’).

9.1.10.2. Reduced Customer due diligence procedures -

Whenever reduced customer due diligence is applied in

34
 accordance with the covered person’s ML/TF customer risk rating
system after obtaining the relevant minimum information, the
covered person may be allowed to conduct reduced CDD
measures, which should take into account the nature of the lower
risk factors. The reduced measures should be commensurate
with the lower risk factors.

9.1.10.3. Enhanced Customer due diligence procedures –

a) Covered person should examine the background and purpose of

all complex, unusual large transactions, and all unusual patterns
of transactions, which have no apparent economic or lawful
purpose.

Enhanced due diligence should be applied under the following

circumstances:

(i) Customers classified as high-risk at the time of account

opening or subsequently thereafter in accordance with
the covered person’s risk rating system; or
(ii) Existence of circumstances which warrants the filing of
suspicious transaction under this Rule.

b) Enhanced CDD measures that should be applied for higher-risk

business relationships which include, but not limited to the
following:

(i) Obtaining additional information and documents on the

customer (e.g. volume of assets, information available
through public databases or internet) and updating
more regularly the identification data of customer and
beneficial owner;
(ii) Obtaining additional information and documentations
to support information on the intended nature of the
business relationship, source of funds or source of
wealth of the customer (ITR, Audited Financial
Statement, Loan Application, Deed of Donation, Deed
of Sale, etc.),reasons for intended or performed
transactions;
(iii) Obtaining the approval of senior management to
commence or continue the business relationship; and
(iv) Conducting enhanced monitoring of the business
relationship, by increasing the number and timing of
controls applied, and selecting patterns of transactions
that need further examination;

Where additional information cannot be obtained, or any

information or document provided is false or falsified, or result of
the validation process is unsatisfactory, or any circumstance for the
filing of suspicious transaction exists, the covered institution shall
file a suspicious transaction report and closely monitor the
customer account/s and transaction/s. (n)

35
9.1.10. Trustee, Nominee and Agent Accounts - When dealing with
customers who are acting as trustee, nominee, agent or in any capacity
for and on behalf of another, covered persons shall verify and record the
true and full identity of the beneficial owner. Covered persons shall also
establish and record the true and full identity of such trustees, nominees,
agents and other persons and the nature of their capacity and duties. In
case a covered person has doubts as to whether such persons are being
used as dummies in circumvention of existing laws, it shall immediately
make the necessary inquiries to verify the status of the business
relationship between the parties. (Rule 9.a.13, Old Rules)

9.1.11. High-risk foreign customer -A customer from a country other

than the Philippines that is recognized as having inadequate internationally
accepted anti-money laundering standards, or does not sufficiently apply
regulatory supervision or the Financial Action Task Force (FATF)
recommendations, or presents greater risk for money laundering, its
associated predicate offenses including corruption and terrorism financing,
such customer shall be subject to enhanced customer due diligence
measures under Rule 9.1.10.3. Information relative to these are available
from publicly available information such as the websites of FATF, FATF
Style Regional Bodies (FSRB) like the Asia Pacific Group on Money
Laundering (APG) and the Egmont Group, the Office of Foreign Assets
Control (OFAC) of the U.S. Department of the Treasury, or other reliable
third parties such as regulators or exchanges, which shall be a component
of a covered person’s customer identification process. (Rule 9.a.9.b, Old
Rules)

9.1.12. Politically Exposed Persons - Covered persons shall endeavor to

establish and record the true and full identity of PEPs, as well as their
immediate family members and the entities related to them. It shall
establish a policy on what standard of due diligence will apply to them,
taking into consideration their position and the risk attendant thereto.

Covered persons should take reasonable measure, based on the

assessment of the level of risk, to determine whether the customer or
beneficial owner is a domestic or international organization PEP.

A foreign PEP is a high risk customer. Covered persons are required to

have appropriate risk management system to determine whether the
customer or beneficial owner is a foreign PEP. Proactive steps must be
taken, such as assessing customers on the basis of risk criteria, risk
profiles, the business model, and verification of CDD information.

If the customer or beneficial owner is a foreign or domestic PEP or

international organization PEPs with elevated risks, enhanced due diligence
procedures should be undertaken.

The measures mentioned above shall also apply to family members or

entities where the PEP is the beneficial owner. (Rule 9.a.16, Old Rules) (a)

9.1.13. Effect on customer due diligence in case of acquisition of

business entities or product portfolios - When a covered
person acquires the business of another covered person, either in
whole or as a product portfolio, it is not necessary to re-validate
the identity of all existing customers, provided that:

36
 a) All customer account records are acquired with the business;
and
b) Customer due diligence inquiries do not raise any doubts as to
whether the anti-money laundering procedures previously
adopted by the acquired business have satisfied the customer
due diligence requirements under the AMLA, as amended.(n)

9.2. Record Keeping: Kinds of Records and Period of Retention - All records of
all transactions of covered persons shall be maintained and safely stored for five
(5) years from the dates of transactions. Said records and files shall contain the
full and true identity of the owners or holders of the accounts involved in the
covered transactions and all other customer identification documents. Covered
persons shall undertake the necessary adequate security measures to ensure
the confidentiality of such records and files. Covered persons shall prepare and
maintain documentation, in accordance with the aforementioned client
identification requirements, on their customer accounts, relationships and
transactions such that any account, relationship or transaction can be so
reconstructed as to enable the AMLC, and/or the courts to establish an audit
trail for money laundering. Covered persons shall likewise keep the electronic
copies of all covered and suspicious transaction reports for at least five (5)
years from the dates of submission to the AMLC. (Rule 9.b.1, Old Rules)

9.2.1. Closed Accounts - With respect to closed accounts, the records on

customer identification, account files and business correspondence shall
be preserved and safely stored for at least five (5) years from the dates
when they were closed. (Rule 9.b.3, Old Rules)

9.2.2. Retention of Records Where a Case of Money Laundering, Civil

Forfeiture or Underlying Unlawful Activity, Has Been Filed in
Court – If a case for money laundering, civil forfeiture or the underlying
unlawful activity has been filed in court based on or pertaining to any
record kept by the covered person concerned, said record must be
retained and safely kept beyond the period stipulated in Sections 9.2 and
9.2.1, as the case may be, until it is confirmed that the case has been
resolved, decided or terminated with finality by the court. (Rule 9.b.4,
Old Rules)

9.2.3. Form of Records -Records shall be retained as originals in such forms

as are admissible in court pursuant to existing laws and the applicable
rules promulgated by the Supreme Court. (Rule 9.b.5, Old Rules)

9.3. Period of Reporting Covered and Suspicious Transactions- Covered

persons shall report to the AMLC all covered transactions and suspicious
transactions within ten (10) working days from the occurrence thereof. (Rule
9.c.1, Old Rules) (a)

Should a transaction be determined to be both a covered and a suspicious

transaction, the covered institution shall report the same as a suspicious
transaction.

9.3.1. Covered and Suspicious Transaction Report Forms -The Covered

Transaction Report (CTR) and the Suspicious Transaction Report (STR)
shall be in the forms prescribed by the AMLC and shall be submitted in a
secured manner to the AMLC in electronic form. (Rule 9.c.2, Old Rules)

37
9.3.2. Confidentiality Provisions - When reporting covered transactions or
suspicious transactions to the AMLC, 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, the
media, the fact that a covered or suspicious transaction has been
reported or is about to be reported, the contents of the report, or any
other information in relation thereto. Neither may such reporting be
published or aired in any manner or form by the mass media, electronic
mail, or other similar devices. In case of violation thereof, the concerned
officer, and employee, of the covered person and media shall be held
criminally liable. (Rule 9.c.4, Old Rules) (a)

9.3.3. Safe Harbor Provisions - No administrative, criminal or civil

proceedings shall lie against any person for having made a CTR or 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, as
amended, or any other Philippine law. (Rule 9.c.g, Old Rules)

38
 RULE X -OTHER PREVENTIVE MEASURES

Section 10.Prevention of Money Laundering and Other Requirements for

Covered Persons.

10.1. Additional Rules for Covered Persons Supervised and Regulated by

the Bangko Sentral ng Pilipinas.

10.1.1. Definition of Terms -

a) “Wire/Fund Transfer” refers to any transaction carried out on behalf of

an originator (either natural or juridical person) through a financial
institution (originating institution) by electronic means with a view to
making an amount of money available to a beneficiary at another financial
institution (beneficiary institution). The originator and the beneficiary may
be the same person. (Rule 3.i, Old Rules)

b) “Cross Border” transfer refers toany wire transfer where the originating
and beneficiary institutions are located in different countries. It shall also
refer to any chain of wire transfers that has at least one cross-border
element. (Rule 3.i.1, Old Rules)

c) “Domestic Transfer” refers to any wire transfer where the originating

and beneficiary institutions are located in the same country. It shall refer
to any chain of wire transfers that takes place entirely within the borders
of a single country, even though the system used to effect the fund/wire
transfer may be located in another country. (Rule 3.i.2, Old Rules)

d) “Originating institution” refers to the entity utilized by the originator to

transfer funds to the beneficiary and can either be (1) a covered person as
generally defined by the AMLA, as amended, and specifically defined by
these Rules; or (2) a financial institution or other entity operating outside
the Philippines that is other than the covered person referred to in (1) but
conducts business operations and activities similar to it. (Rule 3.i.3, Old
Rules)

e) “Beneficiary institution” refers to the entity that will pay out the money
to the beneficiary and can either be (1) a covered person; or (2) a
financial institution or other entity operating outside the Philippines that is
other than the covered person referred to in (1) but conducts business
operations and activities similar to it. (Rule 3.i.4, Old Rules)

f) “Intermediary institution” refers to the entity utilized by the originating

and beneficiary institutions where both have no correspondent banking
relationship with each other but have established relationship with the
intermediary institution. It can either be (1) a covered person; or (2) a
financial institution or other entity operating outside the Philippines that is
other than the covered person referred to in (1) but conducts business
operations and activities similar to it. (Rule 3.i.5, Old Rules)

10.1.2. Numbered Accounts - Peso and foreign currency non-checking

numbered accounts shall be allowed: Provided, That the true identity of
the customers of all peso and foreign currency non-checking numbered

39
 accounts are satisfactorily established based on official and other reliable
documents and records, and that the information and documents
required under the provisions of these Rules are obtained and recorded
by the covered person. No peso and foreign currency non-checking
accounts shall be allowed without the establishment of such identity and
in the manner herein provided. Provided, further, that covered and
suspicious transaction reports involving peso and foreign currency non-
checking numbered accounts submitted to the AMLC pursuant to Section
9.3 of these Rules shall contain the true name of the account holder. The
BSP may conduct annual testing for the purpose of determining the
existence and true identity of the owners of such accounts. (Rule 9.a.8,
Old Rules)

10.1.3. Trustee, Nominee, Agent or Intermediary Account - Where any

transaction is conducted by a trustee, nominee, agent or intermediary,
either as an individual or through a fiduciary relationship, a corporate
vehicle or partnership, on behalf of a trustor, principal, beneficial owner
or person on whose behalf a transaction is being conducted, covered
persons shall establish and record the true and full identity and existence
of both the (a) trustee, nominee, agent or intermediary and the (b)
trustor, principal, beneficial owner or person on whose behalf the
transaction is being conducted. The covered person shall determine the
true nature of the parties’ capacities and duties by obtaining a copy of
the written document evidencing their relationship and apply the same
standards for assessing the risk profile and determining the standard of
customer due diligence to be applied to both.

In case it entertains doubts as to whether the trustee, nominee, agent,

or intermediary is being used as a dummy in circumvention of existing
laws, the covered person shall apply enhanced customer due diligence
under Section 9.1.9.2.(Rule 9.a.13, Old Rules)

10.1.4. Correspondent Banking - Correspondent banking refers to activities of

one bank (the correspondent bank) having direct connection or friendly
service relations with another bank (the respondent bank). Because of
the risk associated with dealing with correspondent accounts where it may
unknowingly facilitate the transmission, or holding and management of
proceeds of unlawful activities or funds intended to finance terrorist
activities, covered persons shall adopt policies and procedures for
correspondent banking activities and designate an officer responsible in
ensuring compliance with these policies and procedures. A covered
person may rely on the customer identification process undertaken by the
respondent bank. In such case, it shall apply the rules on Third Party
reliance promulgated by the BSP, treating the respondent bank as the
Third Party as defined therein. In addition, the correspondent bank shall:

a) Gather sufficient information about the respondent institution to

understand fully the nature of the respondent’s business and to
determine from publicly available information the reputation of the
institution and the quality of supervision, including whether it has
been subject to money laundering or terrorism financing
investigation or regulatory action.
b) Assess the respondent institution’s anti-money laundering and
terrorism financing controls.
c) Obtain approval from senior management before establishing
correspondent relationships.

40
 d) Document the respective responsibilities of both institutions.
e) With respect to “payable-through accounts”, be satisfied that the
respondent bank has verified the identity of, and performed
ongoing customer due diligence on, the customers having direct
access accounts of the correspondent and that it is able to provide
relevant customer identification data upon request by the
correspondent bank.

Correspondent banking customers presenting greater risk, including

shell companies, shall be subject to enhanced customer due diligence
under Section 9.1.9.2. (Rule 9.a.17, Old Rules)

10.1.5. Wire/Fund Transfers - Because of the risk associated with dealing

with wire/fund transfers, where a covered person may unknowingly
transmit proceeds of unlawful activities or funds intended to finance
terrorist activities, it shall establish policies and procedures designed to
prevent it from being utilized for that purpose which shall include, but
not limited to, the following:

a) The beneficiary institution shall not accept instructions to pay-out

wire/fund transfers to non-customer beneficiary, unless it has
conducted the necessary customer due diligence to establish the
true and full identity and existence of said beneficiary. Should the
originator and beneficiary be the same person, the beneficiary
institution may rely on the customer due diligence conducted by
the originating institution subject to the rules on Third Party
reliance promulgated by the BSP, treating the originating institution
as Third Party as herein defined;
b) The originating institution shall not accept instructions to wire/fund
transfer from a non-customer originator, unless it has conducted
the necessary customer due diligence to establish the true and full
identity and existence of said originator;
c) In cross border wire/fund transfers, if the originator is a high risk
customer as herein described, the beneficiary institution shall
conduct enhanced customer due diligence under Section 9.1.9.2 on
the beneficiary and the originator. Where additional information
cannot be obtained, or any information or document provided is
false or falsified, or result of the validation process is
unsatisfactory, the beneficiary institution shall refuse to effect the
wire/fund transfers or the pay-out of funds without prejudice to the
reporting of a suspicious transaction to the AMLC when
circumstances warrant;
d) Whenever possible, manually initiated fund transfer (MIFT)
instructions should not be the primary delivery method. Every
effort shall be made to provide client with an electronic banking
solution. However, where MIFT is utilized, the BSP may issue
pertinent rules on validation procedures;
e) Cross border and domestic wire/fund transfers and related
message not exceeding a threshold amount to be determined by
the BSP or its equivalent in foreign currency shall include accurate
and meaningful originator and beneficiary information. The transfer
message shall contain the following information or may be obtained
thereafter. The following information shall remain with the transfer
or related message through the payment chain:

(i) the name of the originator;

41
 (ii) the name of the beneficiary; and
(iii) an account number of the originator and beneficiary, or in its
absence, a unique transaction reference number.

For cross border and domestic wire/fund transfers and related

message amounting to said threshold amount to be determined by
the BSP or more or its equivalent in foreign currency, The following
information accompanying all qualifying wire transfers shall contain
the following or obtained thereafter:

(i) the name of the originator;

(ii) the originator account number where such an account is used
to process the transaction;
(iii) the originator’s address, or national identity number, or
customer identification number, or date and place of birth;
(iv) the name of the beneficiary; and
(v) the beneficiary account number where such an account is
used to process the transaction.

f) Should any wire/fund transfer amounting to the threshold amount to

be determined by the BSP or more or its equivalent in foreign currency
be unaccompanied by the required originator and beneficiary
information, the beneficiary institution shall exert all efforts to
establish the true and full identity and existence of the originator by
requiring additional information from the originating institution or
intermediary institution. It shall likewise apply enhanced customer due
diligence under Section 9.1.10.3 to establish the true and full identity
and existence of the beneficiary. Where additional information cannot
be obtained, or any information or document provided is false or
falsified, or result of the validation process is unsatisfactory, the
beneficiary institution shall refuse to effect the wire/fund transfer or
the pay-out of funds without prejudice to the reporting of a suspicious
transaction to the AMLC when circumstances warrant. (Rule 9.a.18,
Old Rules)

10.1.6. Exemption from Bank Secrecy Laws – When reporting covered or

suspicious transactions to the AMLC, covered persons and their officers
and employees, shall not be deemed to have violated R.A. No. 1405, as
amended, R.A. No. 6426, as amended, R.A. No. 8791 and other similar
laws. (Rule 9.c.3, Old Rules)(a)

10.2. Additional Rules for Covered Persons Supervised and Regulated by the
Insurance Commission (IC).

10.2.1 Customer Identification -

a) Prohibition against selling of insurance products without face-to-

face Contact. Unless the Insurance Commission issues a different rule,
no insurance product shall be sold by any IC-covered institution without
face-to-face contact with its client except under the following
circumstances:
(i) life insurance policies where the premium is low (e.g. an annual
premium not exceeding Php50,000.00, or single premium not over
Php125,000.00);

42
 (ii) insurance policies for pension schemes if there is no early surrender
option and the policy cannot be used as collateral;
(iii) a pension, superannuation or similar scheme that provides
retirement benefits to employees, where contributions are made by
way of deduction from wages, and the scheme rules do not permit
the assignment of a member’s interest under the scheme; and
(iv) other circumstances as may be determined by the AMLC upon the
recommendation of the IC.

b) For members under group policies, salary allotment and/or worksite

marketing business, the insurer is required to conduct customer
identification on the employer of said members.

10.3. Additional Rules for Covered Persons Supervised and Regulated by

the Securities and Exchange Commission (SEC).

10.3.1. Customer Accounts – The true identity of the customers shall always
be established based on official and other reliable documents and
records. Covered persons are required to obtain and record such
information and documents required under the provisions of these Rules
and the Securities Regulations Code and its implementing Rules and
Regulations, as amended. Covered and Suspicious transaction reports
that are submitted to the AMLC pursuant to Section 9.3 of these Rules
shall always contain beneficial owner. The SEC may conduct regular
audit and testing for the purpose of ensuring that the true identity of the
customer is properly recorded.

10.4. Additional Rules for Jewelry Dealers in Precious Metals (JDPMs)

and Jewelry Dealers in Precious Stones (JDPSs).

10.4.1. Definition of Terms -

a) Jewelry – refers to finished goods deriving fifty percent (50%) or

more of their value from jewels, precious metals or precious stones
constituting, forming part of or attached to said finished goods.
b) Precious Metal – includes gold, silver, platinum, palladium, rhodium,
ruthenium, iridium and osmium at a level of purity of five hundred
(500) parts per one thousand (1,000), singly or in any combination,
and alloys of precious metals, solders, and plating chemicals such as
rhodium and palladium plating solutions, potassium gold cyanide
containing at least sixty-eight and three –tenths percent (68.3%) gold,
potassium silver cyanide containing at least sixty-eight percent (68%)
silver and silver cyanide in salt solution containing at least fifty-four
percent (54%) silver.
c) Precious Stone – includes gemstones, jewels and those substances
that have market-recognized gem level of quality, beauty, and rarity
such as diamond, corundum (including rubies and sapphires), beryl
(including emeralds and aquamarines), chrysoberyl, spinel, topaz,
zircon, tourmaline, garnet, crystalline and cryptocrystalline quartz,
olivine peridot, tanzanite, jadeite jade, nephrite jade, spodumene,
feldspar, turquoise, lapis lazuli and opal and all other gems and stones
used in jewelry making.

43
 d) Jewel – includes organic substances that have a market-recognized
gem level of quality, beauty and rarity such as pearl, amber and coral.
e) Finished good – includes fine jewelry, numismatic items, accessories
and antiques
f) Fine jewelry – includes (a) articles of personal adornment made of
precious metals, precious stones, pearls or combinations thereof
including rings, bracelets, necklaces, brooches, earrings, watch-chains,
fobs, pendants, tie pins, cuff links, combs, tiaras, dress-studs, religious
medals or other medals or insignia; and (b) articles made of precious
metals with or without precious stones such as cigarette cases, powder
boxes, chain purses and cachou boxes, and such other articles of
similar nature.
g) Dealer – an individual or entity who buys and/or sells precious metals,
precious stones and/or jewelry in the course of its business activities.
The purchases or sales of precious metals, precious stones and/or
jewelry as referred to herein exclude those carried out for, connected
with, or for the purpose of extracting precious metals or precious
stones from a mine, or cutting or polishing precious stones.
h) Doing business – means performance by natural and juridical
persons of trade in precious metals, precious stones and finished
goods. It shall include sale, purchase, soliciting orders, service
contracts, opening offices, whether called ‘liaison’ offices or branches;
and any other act or acts that imply a continuity of commercial
dealings or arrangements, and contemplate to that extent the
performance of acts or works, or the exercise of some of the functions
normally incident to, and in progressive prosecution of, commercial
gain or of the purpose and object of the business organization.

10.4.2. Unusual or suspicious patterns of account activity requiring

enhanced customer due diligence. In addition to the circumstances
enumerated under Section 9.1.10.3, JDPMs and JDPSs shall also apply
enhanced customer due diligence involving suspicious transactions
enumerated under Section 10.4.4.

10.4.3. Covered Transactions for JDPMs and JDPSs –For JDPMs and JDPSs
as herein defined, “covered transaction” shall refer to a transaction in
cash or other equivalent monetary instrument involving an amount in
excess of One Million Pesos (Php1,000,000.00).

10.4.4. Suspicious Transactions for JDPMs and JDPSs – Suspicious

transactions for JDPMs and JDPSs shall refer to transactions with JDPMs
and JDPSs, regardless of amounts involved, wherein the circumstances
under Sec. 3b-1 of the AMLA, as amended, are present including those
that are analogous to said circumstances such as but not limited to the
following:

In retail -

a) Transacting with unusual payment methods;

b) Unusual buying behavior or pattern;
c) High value transactions in cash; or
d) Transactions where the customer requests over/under-invoicing
of purchases.

In wholesale –

44
 a) Unknown business background of the buyer;
b) Transactions conducted by a third party;
c) Transactions conducted by a shell company/offshore company;
d) Customer has apparent lack of reasonable expertise/experience
in the precious metals and/or precious stones sector;
e) Transactions where the customer requests over/under-invoicing
of purchases;
f) Unusual payment methods;
g) Customer refuses to use other means of payment other than
cash or uses foreign currency/currencies without apparent
reason; or
h) Unusual business pattern.

10.5. Additional Rules for Company Service Providers (CSPs).

10.5.1. Definition of Terms -

a) “Company Service Providers” - refer to those who, as a business,

provide any of the following services to third parties:

(i) Acting as a formation agent of juridical persons;

(ii) Acting as (or arranging for another person to act as) a director or
corporate secretary of a company, a partner of a partnership, or a
similar position in relation to other juridical persons;
(iii) Providing a registered office, business address or accommodation,
correspondence or administrative address for a company, a
partnership or any other legal person or arrangement. The service
referred to herein shall not be construed to include the business of
leasing and/or subleasing of specific spaces or retail trade; and
(iv) Acting as (or arranging for another person to act as) a nominee
shareholder for another person.

b) “Formation Agent” – refers to a person or entity who, as a business,

provides company incorporation services in the Philippines for foreign and
domestic clients.

c) “Nominee Shareholder” – refers to the registered owner of share(s)

held on behalf of the actual owner under a custodial agreement.

10.5.2. Suspicious Transactions for CSPs. Suspicious transactions for CSPs shall
refer to transactions with CSPs, regardless of amounts involved, wherein
the circumstances under Sec. 3.14 of these Rules, as amended, are
present including those that are analogous to said circumstances such as
but not limited to the following:

a) the establishment of the corporate entity has no obvious

commercial purpose;
b) the client appears to be uninterested in legitimate tax avoidance
schemes;
c) the client makes unusually large cash payments in relation to
business activities which would normally be paid through other
payment facilities;
d) excessive or unnecessary use of nominees;

45
 e) unnecessary granting of wide ranging Powers of Attorneys;
f) the client delays or refuses to disclose the identity of the ultimate
beneficial owners of the company;
g) the established corporate entity continually make substantial
losses;
h) multi-jurisdictional corporate entities and/or corporate entities of
complex structure are established without valid grounds;
i) frequent turnovers in shareholders, directors or trustees;
j) payments are made or received without a clear connection to the
actual activities of the corporate entity;
k) use of off-shore bank accounts without legitimate economic
necessity;
l) the corporate entity is established primarily for the purpose of
collecting funds from various sources which are then transferred to
local or foreign bank accounts that have no apparent ties with the
company;
m) the incorporation of the corporate entity is by a non-resident with
no links or activities in the jurisdiction where the company is
established;
n) the money flow generated by the corporate entity is not in line with
its underlying business activities; and
o) frequent, successive, simultaneous or multiple incorporators with
one or more common nominees as incorporators, common
addresses and other similar circumstances.

10.5.3. Supervision. For purposes of determining AML/CFT compliance, CSPs

shall be under the supervision of the SEC. Where the supervision of the
SEC is limited only to the registration of the CSPs, the AMLC shall act as
the SA for AML/CFT purposes and it may enlist the assistance of or
deputize other government agencies having regulatory power and/or
licensing authority over said covered person for the implementation and
enforcement of the AMLA, as amended, and these Rules. (a)

10.6. Additional Rules for Covered Persons Under Section 3(a)(7) of the
AMLA (Designated Professionals)

10.6.1. Definition of Term/s -

a) “Designated Professional” – shall refer to any person who prepares for

or carries out transactions relating to the services under Section 10.6.2.
Lawyers and accountants acting as independent legal professionals are ex-
cluded in relation to information concerning their clients or where disclo-
sure of information would compromise client confidences or the attorney-
client relationship: Provided, That these lawyers and accountants are au-
thorized to practice in the Philippines and shall continue to be subject to
the provisions of their respective codes of conduct and/or professional re-
sponsibility or any of its amendments.

10.6.2. Applicability - The provisions under this Rule shall apply to persons
who provide any of the following services:

a) Managing client’s money, securities or other assets;

b) Management of bank, savings or securities accounts;
c) Organization of contributions for the creation, operation or manage-
ment of companies; and

46
 d) Creation, operation or management of juridical persons or arrange-
ments, and buying and selling business entities.

10.6.3. Necessary Services - The rendition of any of the services mentioned

under Section 10.6.2 shall necessarily include the following activities
performed in behalf of a client, such as but not limited to:

a) receiving or paying funds and/or capital contributions;

b) receiving or transferring, locally or internationally, funds, securities
and assets;
c) buying and selling of business entities, including mergers and consoli-
dation;
d) deposits or withdrawals on client’s accounts;
e) issuing and cashing of checks and other negotiable instruments;
f) sale, transfer or disposition of stocks;
g) administration of estates;
h) providing tax services;
i) providing insolvency, winding up or dissolution services;
j) creation, operation and management of trusts, companies, founda-
tions, corporations and other juridical persons or arrangements;
k) preparing powers of attorney and other contracts involving transac-
tions of client’s accounts and assets;
l) preparation of all documentary requirements for the incorporation and
operation of juridical person;
m) facilitating the registration of the juridical person with concerned gov-
ernment agencies; and
n) such other activities that are necessary to carry out the services men-
tioned under Section 10.6.2. hereof.

10.6.4. Covered Transactions - Designated professionals shall file CTR when

the amount or value involved in the transactions they prepare for or
carry out in relation to the services mentioned in Section 10.6.2 and 3
exceeds Five Hundred Thousand Pesos (Php500,000.00).

10.6.5. Suspicious Transactions - Suspicious transactions for designated

professionals shall refer to transactions with designated professionals,
regardless of the amounts involved, wherein the circumstances under
Sec. 3b-1 of the AMLA are present including those that are analogous to
said circumstances such as but not limited to the following:

a) Client appears to be living beyond his or her means;

b) Client has checks inconsistent with sales such as unusual payments
from unlikely sources;
c) Client has history of changing book-keepers or accountants yearly;
d) Client is uncertain about location of company’s records;
e) Company carries non-existent or satisfied debt that is continually
shown as current on financial statements;
f) Company has no employees, which is unusual for the type of busi-
ness;
g) Company is paying unusual consultant fees to offshore companies;
h) Company’s records consistently reflect sales at less than cost, thus
putting the company into a loss position, but the company continues
without reasonable explanation of the continued loss;
i) Company shareholder loans are not consistent with business activity;

47
 j) Examination of source documents shows misstatements of business
activity that cannot be readily traced through the company’s books;
k) Company makes large payments to subsidiaries or similarly con-
trolled companies that are not within the normal course of business;
l) Company acquires large personal and consumer assets when this
type of transaction is inconsistent with the ordinary business practice
of the client or the practice of that particular industry;
m) Company invoiced by organizations located in a country that does not
have adequate anti-money laundering laws and is known as a highly
secretive banking and corporate tax haven;
n) Client has business activity inconsistent with industry averages of fi-
nancial ratios;
o) When the transaction is complex or unusual in the ordinary course of
the client’s business; and
p) Such other indicators analogous or related to the foregoing.

RULE XI
Authority to File Petitions for FREEZE ORDER

Section 11.Authority to File Petition for Freeze Order.

11.1. Freezing of any monetary instrument or property.

1. Upon 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 any unlawful activity as defined in Section 3.14 hereof or to
a money laundering offense, the Court of Appeals may issue a freeze order
on said monetary instrument or property which shall be effective
immediately.
2. The Rule of Procedure in Cases of Civil Forfeiture, Asset Preservation, and
Freezing of Monetary Instrument, Property, or Proceeds representing,
Involving, or Relating to an Unlawful Activity or Money Laundering Offense
under Republic Act No. 9160, as amended (A.M. No. 05-11-04-SC) shall
govern the proceedings in all petitions for freeze order instituted pursuant
to R.A. No. 9160, as amended.
3. Considering the intricate and diverse web of related and interlocking
accounts pertaining to the monetary instruments or properties that any
person may create in the different covered persons, their branches and/or
other units, the AMLC may file a petition with the Court of Appeals for the
freezing of the monetary instruments or properties in the names of the
reported owners/holders and monetary instruments or properties named
in the Petition of the AMLC including related accounts as defined under
Section 3.11 of these Rules.
4. The Court shall act on the petition to freeze within twenty-four (24) hours
from filing of the petition. If the petition is filed a day before a non-
working day, the computation of the twenty-four (24) hour period shall
exclude the non-working days.
5. The freeze order shall not exceed six (6) months depending upon the
circumstances of the case: Provided, that if there is no case filed against
a person whose account has been frozen within the period determined by
the court, the freeze order shall be deemed ipso facto lifted.

6. A person whose account has been frozen may file a motion to lift the
freeze order and the court must resolve this motion before the expiration
of the freeze order.

48
 7. No court shall issue a temporary restraining order or a writ of injunction
against any freeze order, except the Supreme Court.

11.2. No prior charge, pendency or conviction necessary. – No prior criminal

charge, pendency of or conviction for an unlawful activity or money laundering
offense is necessary for the commencement or the resolution of an application
for freeze order. (n)

11.3. Extension of the Freeze Order – If the freeze order issued by the Court of
Appeals is less than six (6) months, before the period of said freeze order
expires, the AMLC may file a motion with the same court for an extension of
said period: Provided, however, That the extension sought shall not extend
the period of the freeze beyond six (6) months. Upon the timely filing of such
motion and pending resolution thereof by the Court of Appeals to extend the
period, said period shall be deemed suspended and the freeze order shall
remain effective. Furthermore, the effect of the freeze order shall also remain
until the court, where a case for civil forfeiture is pending, issues a Provisional
Asset Preservation Order (PAPO).

11.4. Definition of Probable Cause - Probable cause includes such facts and
circumstances which would lead a reasonably discreet, prudent or cautious
man to believe that an unlawful activity and/or a money laundering offense is
about to be, is being or has been committed and that the account or any
monetary instrument or property sought to be frozen and/or inquired into is in
any way related to said unlawful activity and/or money laundering offense.

11.5. Duty of Covered Persons and/or concerned Government Agencies –

1. Upon receipt of the notice of the freeze order, the covered person
concerned shall immediately freeze the monetary instrument or property
and related accounts subject thereof and shall also immediately desist
from and not allow any transaction, withdrawal, deposit, transfer,
removal, conversion, other movement or concealment of the account
representing, involving or relating to the subject monetary instrument,
property, proceeds or its related accounts. (n)
2. The covered person shall likewise immediately furnish a copy of the notice
of the freeze order upon the owner or holder of the monetary instrument
or property or related accounts subject thereof.
3. Within twenty-four (24) hours from receipt of the freeze order, the
covered person concerned shall submit to the Court of Appeals and the
AMLC, by personal delivery or other modes of delivery acceptable to the
court, a detailed written return on the freeze order, specifying all the
pertinent and relevant information, which shall include the following:

a) For covered persons: The account numbers and/or description of the

monetary instrument, property, or proceeds involved;

b) For concerned government agencies:

(i) Certificates of title numbers of registered real property and the

volumes and pages of the registration books of the Register of
Deeds where the same are registered;
(ii) Registration in the Primary Entry Book and corresponding
Registration Book in the Register of Deeds for unregistered real
property;

49
 (iii) Registration with the Register of Deeds of the enabling or master
deed for a condominium project, declaration of restrictions
relating to such condominium project, certificate of title
conveying a condominium and notice of assessment upon any
condominium;
(iv) Tax declarations for improvements built on land owned by a
different party, together with the annotation of the contract of
lease on the title of the owner of the land as registered in the
Register of Deeds;
(v) Certificates of registration for motor vehicles and heavy
equipment indicating the engine numbers, chassis numbers and
plate numbers;
(vi) Certificates of numbers for seacraft;
(vii) Registration certificates for aircraft; or
(viii) Commercial invoices or notarial identification for personal
property capable of manual delivery;

whichever are applicable:

c) The names of the account holders, personal property owners or

possessors, or real property owners or occupants;

d) The value of the monetary instrument, property, or proceeds as of the

time the assets were ordered frozen;

e) All relevant information as to the nature of the monetary instrument,

property, or proceeds; and

f) The date and time when the freeze order was served.

4. The covered persons shall also submit a detailed return to the AMLC, in a
format to be prescribed by the latter, in a secured electronic form either
via leased line or internet facilities. (n)

5. The covered person shall not lift the effects of the freeze order without
securing official confirmation from the AMLC.

6. Upon receipt of the freeze order issued by the Court of Appeals and upon
verification by the covered person that the related accounts originated
from and/or are materially linked to the monetary instrument or property
subject of the freeze order, the covered person shall freeze these related
accounts wherever these may be found.

The written return to be filed by the covered person as required under Section
11.4(3) hereof shall include the fact of such freezing and an explanation as to
the grounds for the identification of the related accounts.

If the related accounts cannot be determined within twenty-four (24) hours

from receipt of the freeze order due to the volume and/or complexity of the
transactions or any other justifiable factor(s), the covered person shall effect
the freezing of the related accounts, monetary instruments and properties
within a reasonable period and shall submit a supplemental return thereof to
the Court of Appeals and the AMLC within twenty-four (24) hours from the
freezing of said related accounts, monetary instruments and properties.

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 11.6. Prohibition against Issuance of Freeze Orders against candidates for
an electoral office during election period – No assets shall be frozen to
the prejudice of a candidate for an electoral office during an election period.

RULE XII - INQUIRY INTO DEPOSITS OR INVESTMENTS

Section 12. Authority to Inquire into or examine Deposits or Investments.

12.1. Authority to Inquire into or examine Deposits or Investments with

Court Order - Notwithstanding the provisions of Republic Act No. 1405, as
amended; Republic Act No. 6426, as amended; Republic Act No. 8791, and
other laws, the AMLC may inquire into or examine any particular deposit or
investment, including related accounts, with any banking institution or non-
bank financial institution and their subsidiaries and affiliates upon order by the
Court of Appeals based on an ex parte application in cases of violation of the
AMLA, as amended, when it has been established that there is probable cause
that the deposits or investments involved, including related accounts, are in
any way related to an unlawful activity as defined in Section 3.14 hereof or a
money laundering offense under Section 4 hereof; except in cases as provided
under Section 12.2.

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

b) A court order ex parte must be obtained before the AMLC can inquire into
the related accounts; provided, that the procedure for the ex parte
application for an order of inquiry into the principal account shall be the
same for that of the related accounts.

c) The authority to inquire into or examine the main account and the related
accounts shall comply with the requirements of Article III, Sections 2 and
3 of the 1987 Constitution, which are hereby incorporated by reference.

12.2. Duty of the banking institution or non-bank financial institution upon

receipt of the Court Order allowing a Bank Inquiry – The banking
institution or the non-bank financial institution and their subsidiaries and
affiliates shall immediately, upon receipt of the Court Order and AMLC
Secretariat’s request for documents do the following:

a) allow the AMLC and/or its Secretariat’s duly authorized personnel full
access to all records pertaining to the deposit or investment account; and
b) submit to the AMLC Secretariat, within ten (10) days from receipt of the
letter request, certified true copies of the documents subject of the
request.

Any officer, employee, stockholder, owner, representative, agent, manager,

director or officer-in-charge of any banking institution or non-bank financial
institution and their subsidiaries and affiliates who purposely fails or willfully
refuses to permit the AMLC and/or its Secretariat’s duly authorized personnel
to conduct an inquiry into or examination of any deposit or investment shall

51
 be imposed a fine of not more than Five Hundred Thousand Philippine Pesos
(PHP500,000.00). (n)

12.3. Authority to Inquire into or examine Bank Deposits without court

order – The AMLC may inquire into or examine any deposit or investment
with any banking institution or non-bank financial institution and their
subsidiaries and affiliates without a court order in cases involving any of the
following unlawful activities:
a) Kidnapping for ransom under Article 267 of Act No. 3815, otherwise
known as the Revised Penal Code, as amended;
b) Sections 4, 5, 6, 8, 9, 10, 11, 12, 13, 14, 15 and 16 of Republic Act
No. 9165, otherwise known as the Comprehensive Dangerous Drugs
Act of 2002;
c) Hijacking and other violations under Republic Act No. 6235; destructive
arson and murder, as defined under the Revised Penal Code, as
amended; and
d) Felonies or offenses of a nature similar to those mentioned in Section
3(i) (1), (2) and (12) of the AMLA, as amended, which are punishable
under the penal laws of other countries;
e) Terrorism and conspiracy to commit terrorism as defined and penalized
under Republic Act No. 9372; and
f) Financing of terrorism as defined and penalized under Republic Act No.
10168.

12.4. Procedure for inquiry or examination without a court order - Where

any of the unlawful activities enumerated under Section 12.2 is involved, and
there is probable cause that the deposits or investments with any banking
institution or non-bank financial institution and their subsidiaries and affiliates
are in any way related to any of these unlawful activities, the AMLC shall issue
a resolution authorizing the inquiry into or examination of any deposit or
investment with such banking institution or non-bank financial institution and
their subsidiaries and affiliates concerned.

12.5. Duty of the banking institution or non-bank financial institution upon

receipt of the AMLC resolution- The banking institution or the non-bank
financial institution and their subsidiaries and affiliates shall immediately,
upon receipt of the AMLC resolution, allow the AMLC and/or its Secretariat’s
duly authorized personnel full access to all records pertaining to the deposit or
investment account and to submit to the AMLC Secretariat, within ten (10)
days from receipt of the letter request, certified true copies of the documents
subject of the request.

Any officer, employee, stockholder, owner, representative, agent, manager,

director or officer-in-charge of any banking institution or non-bank financial
institution and their subsidiaries and affiliates who purposely fails or willfully
refuses to permit the AMLC and/or its Secretariat’s duly authorized personnel
to conduct an inquiry into or examination of any deposit or investment shall
be imposed a fine of not more than Five Hundred Thousand Philippine Pesos
(PHP500,000.00).

12.6. No prior charge, pendency or conviction necessary. – No prior criminal

charge, pendency of or conviction for an unlawful activity or money laundering
offense is necessary for the commencement or the resolution of an application
for bank inquiry. (n)

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12.7. Authority of the BSP to check compliance with the AMLA, as amended,
and these Rules - To ensure compliance with the requirements of the AMLA,
as amended, and these Rules, the BSP may, in the course of a periodic or
special examination, check the compliance of a covered person through
generally accepted examination techniques which may include account
transaction sampling and use of electronic audit software in accordance with
BSP Examination Procedures for AML/CFT Activities. For this purpose, it may
undertake the following activities:

1. Review any customer identification and account opening documents

and records of existing accounts, including but not limited to deposits,
investments, loans, treasury, custodianship, trust and fiduciary
accounts, to determine compliance with the requisite:
a) conduct of face-to-face contact except as provided for under
items (a) to (d) of Section 9.1.1. of these Rules;
b) completeness and accuracy of the minimum information and
documents required to be obtained under these Rules; and
c) records-retention period, as well as compliance with all other
regulations issued by the AMLC and the BSP to assess that the
covered person has properly established and verified the true
and full identity of its customers.
2. Require a covered person to provide BSP examiners copies of all
covered and suspicious transaction reports filed by the covered person
with the AMLC in order to determine accurate and complete reporting
of said transactions to the AMLC pursuant to the AMLA, as amended,
these Rules and BSP issuances.
3. Review supporting transaction records and documents, such as but not
limited to, deposit and/or withdrawal slips, debit/credit memos,
including the electronic or manual AML/CFT system, for purposes of
ascertaining that all covered and suspicious transactions were captured
and reported to the AMLC, within the period allowed by the AMLA, as
amended, and these Rules, and to determine proper maintenance and
retention of transaction documents and records.
4. Review all documents and records related to closed accounts, peso and
foreign currency non-checking numbered accounts, high-risk accounts,
suspicious transactions reported to the AMLC and accounts which are
the subject of a money laundering case, to ensure that a covered
person is properly monitoring these types of accounts/transactions and
is complying with records-retention requirements under the AMLA, as
amended, these Rules and/or BSP AML/CFT regulations.

12.8. BSP Examination Procedures for AML/CFT Activities and Risk Rating
System - To ensure compliance with the AMLA, as amended, and these
Rules, the BSP shall promulgate its examination procedures for AML/CFT
activities and adopt a risk rating system that will assess a covered person and
its subsidiaries and affiliates’ overall AML/CFT risk management system.

Any findings of the BSP which may constitute a violation of any provision of
the AMLA, as amended, and these Rules shall be referred to the AMLC for its
appropriate action without prejudice to the BSP taking appropriate action
against a non-complying covered person and its responsible personnel.

RULE XIII - INQUIRY INTO ACCOUNTS OR TRANSACTIONS

53
Section 13.Authority to inquire into accounts or transactions.– The AMLC may
inquire into or examine any other type of account or transaction other than deposits or
investments as defined under Republic Act No. 1405, as amended, Republic Act. No.
8791, and Republic Act No. 6426, without a court order, with any covered person when
it has been established that there is probable cause that the transaction or account
involved, including related accounts, are in any way related to an unlawful activity as
defined in Section 3.14 hereof or a money laundering offense under Section 4 hereof.(n)

13.1. Duty of the covered persons upon receipt of the AMLC Resolution-
The covered person and their subsidiaries and affiliates shall, immediately
upon receipt of the AMLC resolution, allow the AMLC and/or its
Secretariat’s duly authorized personnel full access to all records pertaining
to the account or transaction.

Any officer, employee, stockholder, owner, representative, agent,

manager, director or officer-in-charge of any covered person who
purposely fails or willfully refuses to permit the AMLC or its Secretariat’s
duly authorized personnel to conduct an inquiry into or examination of any
account or transaction shall be imposed a fine of not more than Five
Hundred Thousand Philippine Pesos (PHP500,000.00). (n)

RULE XIV - CIVIL FORFEITURE

Section 14.Authority to Institute Civil Forfeiture Proceedings. – The AMLC is

authorized under Section 7 (3) of the AMLA, as amended, to institute civil forfeiture
proceedings and all other remedial proceedings through the Office of the Solicitor
General.

14.1. Applicable Rule - The Rule of Procedure in Cases of Civil Forfeiture, Asset
Preservation, and Freezing of Monetary Instrument, Property, or Proceeds
Representing, Involving, or Relating to an Unlawful Activity or Money
Laundering Offense under Republic Act No. 9160, as Amended (A.M. No. 05-
11-04-SC) shall govern all civil forfeiture proceedings instituted pursuant to
the AMLA, as amended.

14.2. Civil Forfeiture – Upon determination by the AMLC that probable cause
exists that any monetary instrument or property is in any way related to an
unlawful activity as defined in Section 3(i) or a money laundering offense
under Section 4 of the AMLA, as amended, the AMLC shall file with the
appropriate court through the Office of the Solicitor General, a verified
petition for civil forfeiture. (n)

14.2.1. Forfeiture of assets of equal value - The forfeiture shall include those
other monetary instrument or property having a value equivalent to that
of the monetary instrument or property found to be related in any way
to an unlawful activity or a money laundering offense, when with due
diligence, the former cannot be located, or it has been substantially
altered, destroyed, diminished in value or otherwise rendered worthless
by any act or omission, or it has been concealed, removed, converted, or
otherwise transferred, or it is located outside the Philippines or has been
placed or brought outside the jurisdiction of the court, or it has been
commingled with other monetary instrument or property belonging to
either the offender himself or a third person or entity, thereby rendering
the same difficult to identify or be segregated for purpose of forfeiture.
(n)

54
 14.3. No prior charge, pendency or conviction necessary. – No prior criminal
charge, pendency of or conviction for an unlawful activity or money laundering
offense is necessary for the commencement or the resolution of a petition for
civil forfeiture. (n)

14.4. Claim on Forfeited Assets. Where the court has issued an order of forfeiture
of the monetary instrument or property in a criminal prosecution for any
money laundering offense defined under Section 4 of the AMLA, as amended,
the offender or any other person claiming an interest therein may apply, by
verified petition, for a declaration that the same legitimately belongs to him
and for segregation or exclusion of the monetary instrument or property
corresponding thereto. The verified petition shall be filed with the court which
rendered the judgment of forfeiture, within fifteen (15) days from the date of
the finality of theorder of forfeiture, in default of which the said order shall
become final and executory. This provision shall apply in both civil and
criminal forfeiture.(n)

14.5. Payment in lieu of Forfeiture -Where the court has issued an order of
forfeiture of the monetary instrument or property subject of a money
laundering offense defined under Section 4 of the AMLA, as amended, and
said order cannot be enforced because any particular monetary instrument or
property cannot, with due diligence, be located, or it has been substantially
altered, destroyed, diminished in value or otherwise rendered worthless by
any act or omission, directly or indirectly, attributable to the offender, or it
has been concealed, removed, converted, or otherwise transferred to prevent
the same from being found or to avoid forfeiture thereof, or it is located
outside the Philippines or has been placed or brought outside the jurisdiction
of the court, or it has been commingled with other monetary instruments or
property belonging to either the offender himself or a third person or entity,
thereby rendering the same difficult to identify or be segregated for purposes
of forfeiture, the court may, instead of enforcing the order of forfeiture of the
monetary instrument or property or part thereof or interest therein,
accordingly order the convicted offender to pay an amount equal to the value
of said monetary instrument or property. This provision shall apply in both
civil and criminal forfeiture. (n)

RULE XV - MUTUAL ASSISTANCE

Section 15.Mutual Assistance among States.

15.1. Request for Assistance from a Foreign State - Where a foreign State
makes a request for assistance in the investigation or prosecution of a money
laundering offense, the AMLC may execute the request or refuse to execute
the same and inform the foreign State of any valid reason for not executing
the request or for delaying the execution thereof. The principles of mutuality
and reciprocity shall, for this purpose, be at all times recognized.

15.2. Powers of the AMLC to Act on a Request for Assistance from a Foreign
State - The AMLC may execute a request for assistance from a foreign State
by: (1) tracking down, freezing, restraining and seizing assets alleged to be
proceeds of any unlawful activity under the procedures laid down in the AMLA,
as amended, and in these Rules; (2) giving information needed by the foreign
State within the procedures laid down in the AMLA, as amended, and in these
Rules; and (3) applying for an order of forfeiture of any monetary instrument

55
 or property with the court: Provided, That the court shall not issue such an
order unless the application is accompanied by an authenticated copy of the
order of a court in the requesting State ordering the forfeiture of said
monetary instrument or property of a person who has been convicted of a
money laundering offense or an unlawful activity in the requesting State, and
a certification or an affidavit of a competent officer of the requesting State
stating that the conviction and the order of forfeiture are final and that no
further appeal lies in respect of either.

15.3. Obtaining Assistance from Foreign States - The AMLC may make a
request to any foreign State for assistance in (1) tracking down, freezing,
restraining and seizing assets alleged to be proceeds of any unlawful activity;
(2) obtaining pertinent information and documents that it needs relating to
any money laundering offense or any other matter directly or indirectly
related thereto; (3) to the extent allowed by the law of the foreign State,
applying with the proper court therein for an order to enter any premises
belonging to or in the possession or control of, any or all of the persons
named in said request, and/or search any or all such persons named therein
and/or remove any document, material or object named in said request:
Provided, That the documents accompanying the request in support of the
application have been duly authenticated in accordance with the applicable
law or regulation of the foreign State; and (4) applying for an order of
forfeiture of any monetary instrument or property in the proper court in the
foreign State: Provided, That the request is accompanied by an authenticated
copy of the order of the Regional Trial Court ordering the forfeiture of said
monetary instrument or property and an affidavit of the clerk of court stating
that the order of forfeiture is final and that no further appeal lies in respect of
it.

15.4. Limitations on Requests for Mutual Assistance - The AMLC may refuse to
comply with any request for assistance where the action sought by the
request contravenes any provision of the Constitution or the execution of a
request is likely to prejudice the national interest of the Philippines, unless
there is a treaty between the Philippines and the requesting State relating to
the provision of assistance in relation to money laundering offenses.

15.5. Requirements for Requests for Mutual Assistance from Foreign States
- A request for mutual assistance from a foreign State must (1) confirm that
an investigation or prosecution is being conducted in respect of a money
launderer named therein or that he has been convicted of any money
laundering offense; (2) state the grounds on which any person is being
investigated or prosecuted for money laundering or the details of his
conviction; (3) give sufficient particulars as to the identity of said person; (4)
give particulars sufficient to identify any covered person believed to have any
information, document, material or object which may be of assistance to the
investigation or prosecution; (5) ask from the covered person concerned any
information, document, material or object which may be of assistance to the
investigation or prosecution; (6) specify the manner in which and to whom
said information, document, material or object obtained pursuant to said
request, is to be produced; (7) give all the particulars necessary for the
issuance by the court in the requested State of the writs, orders or processes
needed by the requesting State; and (8) contain such other information as
may assist in the execution of the request.

15.6. Authentication of Documents - For purposes of Sections 7 and 13 (f) of

the AMLA, as amended, a document is authenticated if the same is signed or

56
 certified by a judge, magistrate or equivalent officer in or of, the requesting
State, and authenticated by the oath or affirmation of a witness or sealed with
an official or public seal of a minister, secretary of state, or officer in or of, the
government of the requesting State, or of the person administering the
government or a department of the requesting territory, protectorate or
colony. The certificate of authentication may also be made by a secretary of
the embassy or legation, consul general, consul, vice consul, consular agent
or any officer in the foreign service of the Philippines stationed in the foreign
State in which the record is kept, and authenticated by the seal of his office.

15.7. Suppletory Application of the Revised Rules of Court - For attachment of

Philippine properties in the name of persons convicted of any unlawful activity
as defined in Section 3 (i) of the AMLA, as amended, execution and
satisfaction of final judgments of forfeiture, application for examination of
witnesses, procuring search warrants, production of bank documents and
other materials and all other actions not specified in the AMLA, as amended,
and these Rules, and assistance for any of the aforementioned actions, which
is subject of a request by a foreign State, resort may be had to the
proceedings pertinent thereto under the Revised Rules of Court.

15.8. Authority to Assist the United Nations and other International

Organizations and Foreign States– The AMLC is authorized under Sections
7 (8) and 13 (b) and (d) of the AMLA, as amended, to receive and take action
in respect of any request of foreign States for assistance in their own anti-
money laundering operations. It is also authorized under Section 7 (7) of the
AMLA, as amended, to cooperate with the National Government and/or take
appropriate action in respect of conventions, resolutions and other directives
of the United Nations (UN), the UN Security Council, and other international
organizations of which the Philippines is a member. However, the AMLC may
refuse to comply with any such request, convention, resolution or directive
where the action sought therein contravenes the provision of the Constitution
or the execution thereof is likely to prejudice the national interest of the
Philippines.

15.9. Extradition – The Philippines shall negotiate for the inclusion of money
laundering offenses as defined under Section 4 of the AMLA, as amended,
among the extraditable offenses in all future treaties. With respect, however,
to the state parties that are signatories to the United Nations Convention
Against Transnational Organized Crime that was ratified by the Philippine
Senate on October 22, 2001, money laundering is deemed to be included as
an extraditable offense in any extradition treaty existing between said state
parties, and the Philippines shall include money laundering as an extraditable
offense in every extradition treaty that may be concluded between the
Philippines and any of said state parties in the future.

RULE XVI - PENAL PROVISIONS

Section 16. Penalties for the Crime of Money Laundering.

16.1. Penalties under Section 4 (a), (b), (c) and (d) of the AMLA, as
amended - The penalty of imprisonment ranging from seven (7) to
fourteen (14) years and a fine of not less than Three Million Philippine
Pesos (PHP3,000,000.00) but not more than twice the value of the
monetary instrument or property involved in the offense, shall be
imposed upon a person convicted under Section 4 (a), (b), (c) and (d)
of the AMLA, as amended.(a)

57
16.2. Penalties under Section 4 (e) and (f) of the AMLA, as amended -
The penalty of imprisonment from four (4) to seven (7) years and a
fine of not less than One Million Five Hundred Thousand Philippine
Pesos (PHP1,500,000.00) but not more than Three Million Philippine
Pesos (PHP3,000,000.00), shall be imposed upon a person convicted
under Section 4 (e) and (f) of the AMLA, as amended.(a)

16.3. Penalties under the last paragraph of Section 4 of the AMLA, as

amended - The penalty of imprisonment from six (6) months to four
(4) years or a fine of not less than One Hundred Thousand Philippine
Pesos (PHP100,000.00) but not more than Five Hundred Thousand
Philippine Pesos (PHP500,000.00), or both, shall be imposed on a
person convicted under the last paragraph of Section 4 of the AMLA, as
amended.(a)

16.4. Penalties for knowingly participating in the commission of

money laundering-The penalty of imprisonment ranging from four
(4) to seven (7) years and a fine corresponding to not more than two
hundred percent (200%) of the value of the monetary instrument or
property laundered shall be imposed upon the covered person, its
directors, officers or personnel who knowingly participated in the
commission of the crime of money laundering. (n)

16.5. Administrative Sanctions – The imposition of administrative

sanctions shall be without prejudice to the filing of criminal charges
against the persons responsible for the violation.

After due notice and hearing, the AMLC shall, at its discretion, impose
sanctions, including monetary penalties, warning or reprimand, upon
any covered person, its directors, officers, employees or any other
person for the violation of the AMLA, as amended, and these Rules, or
for failure or refusal to comply with AMLC orders, resolutions and other
issuances. Such monetary penalties shall be in amounts as may be
determined by the AMLC to be appropriate, which shall not be more
than Five hundred thousand pesos (Php500,000.00) per violation. (a,
Rule 14.a.4)

The AMLC may promulgate rules on fines and penalties taking into
consideration the attendant circumstances, such as the nature and
gravity of the violation or irregularity. (n)

16.6. Non-discrimination in establishing business relationships-The

provisions of the AMLA, as amended, shall not be construed or
implemented in a manner that will discriminate against certain
customer types, such as politically-exposed persons, as well as their
relatives, or against a certain religion, race or ethnic origin, or such
other attributes or profiles when used as the only basis to deny these
persons access to the services provided by the covered persons.
Whenever a bank, or quasi-bank, financial institution or whenever any
person or entity commits said discriminatory act, the person or persons
responsible for such violation shall be subject to sanctions as may be
deemed appropriate by their respective supervising authorities. (n)

16.7. Penalties for Failure to Keep Records - The penalty of

imprisonment from six (6) months to one (1) year or a fine of not less

58
 than One Hundred Thousand Philippine Pesos (PHP100,000.00) but not
more than Five Hundred Thousand Philippine Pesos (PHP500,000.00),
or both, shall be imposed on a person convicted under Section 9 (b) of
the AMLA, as amended.

16.8. Penalties for Malicious Reporting - Any person who, with malice, or
in bad faith, reports or files a completely unwarranted or false
information relative to money laundering transaction against any
person shall be subject to a penalty of six (6) months to four (4) years
imprisonment and a fine of not less than One Hundred Thousand
Philippine Pesos (PHP100, 000.00) but not more than Five Hundred
Thousand Philippine Pesos (PHP500,000.00), at the discretion of the
court: Provided, That the offender is not entitled to avail of the
benefits of the Probation Law.

16.9. Penalties for Breach of Confidentiality – The punishment of

imprisonment ranging from three (3) to eight (8) years and a fine of
not less than Five Hundred Thousand Philippine Pesos
(PHP500,000.00) but not more than One Million Philippine Pesos
(PHP1,000,000.00), shall be imposed on a person convicted for a
violation under Section 9(c) of the AMLA, as amended. In case of a
breach of confidentiality that is published or reported by the media, the
responsible reporter, writer, president, publisher, manager and editor-
in-chief shall be liable under the AMLA, as amended.

16.10. Refusal by a Public Official or Employee to Testify – Any public

official or employee who is called upon to testify and refuses to do the
same or purposely fails to testify shall suffer the same penalties
prescribed under Section 16.8 hereof.

16.11. Where Offender is a Juridical Person, Alien or Public Officer - If

the offender is a corporation, association, partnership or any other
juridical person, the penalty of imprisonment and/or fine shall be
imposed upon the responsible officers, as the case may be, who
participated in, or allowed by their gross negligence the commission of
the crime and the court may suspend or revoke its license. If the
offender is an alien, he shall, in addition to the penalties herein
prescribed, be deported without further proceedings after serving the
penalties herein prescribed. If the offender is a public official or
employee, he shall, in addition to the penalties prescribed herein,
suffer perpetual or temporary absolute disqualification from office, as
the case may be.

RULE XVII - PROHIBITIONS

Section 17. Prohibitions Against Political Harassment.

17.1. Prohibition against Political Persecution – The AMLA, as amended, and

these Rules shall not be used for political persecution or harassment or as an
instrument to hamper competition in trade and commerce. No case for money
laundering may be filed to the prejudice of a candidate for an electoral office
during an election period.

17.2. Provisional Remedies Application; Exception –

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 a) The AMLC may apply, in the course of the criminal proceedings, for
provisional remedies to prevent the monetary instrument or property,
including related accounts, subject thereof from being removed, concealed,
converted, commingled with other property or otherwise to prevent its being
found or taken by the applicant or otherwise placed or taken beyond the
jurisdiction of the court.

b) Where there is conviction for money laundering under Section 4 of the AMLA,
as amended, the court shall issue a judgment of forfeiture in favor of the
Government of the Philippines with respect to the monetary instrument or
property, including related accounts, found to be proceeds of one or more
unlawful activities.

RULE XVIII - RESTITUTIONS

Section 18. Restitution. - Restitution for any aggrieved party shall be governed by the
provisions of the New Civil Code.

RULE XIX - OTHER PROVISIONS

Section 19. Other Provisions.

19.1. Implementing Rules and Regulations. – These Rules or any portion

thereof may be revised or amended by unanimous vote of the members of the
AMLC.

19.2. AML/CFT Guidelines and Circulars of Supervising Authorities - The

BSP, the SEC, the IC, and the relevant regulatory bodies of the DNFBPs shall
issue their respective AML/CFT Guidelines and Circulars, not later than 180
days from the effectivity of this Rules, to assist the AMLC in effectively
implementing the provisions of the AMLA, as amended, these Rules, as well as
other pertinent laws and rules.

19.3. Anti-Money Laundering/Combating the Financing of Terrorism

(AML/CFT) Programs) –

1. All covered persons shall formulate and implement their AML/CFT

Programs in accordance with Section 9 and other pertinent provisions
of the AMLA, as amended, these Rules, and AML/CFT Guidelines and
Circulars issued by the Supervising Authorities including, but not
limited to, information dissemination on money laundering and
terrorism financing activities and their prevention, detection and
reporting, and the training of their responsible personnel. Every
covered person shall make available, upon request by the AMLC or the
Supervising Authorities, its AML/CFT Program.

Every covered person shall regularly update its AML/CFT Program, in

no case longer than, two (2) years, to incorporate changes in AML/CFT
laws, rules and regulations, policies and procedures, latest trends in
money laundering and terrorism financing typologies, and latest
issuances by the Supervising Authorities. Any revision or update in the
AML/CFT Program shall likewise be approved by the Board of Directors
or the country/regional head or its equivalent for local branches of
foreign banks/entities/companies.

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 Covered persons which have not yet formulated their AML/CFT
program are hereby given ninety (90) days from the effectivity of
these Rules to prepare the same. Failure to comply with this
requirement shall be subject to the imposition of administrative
sanctions under Section 16.5. (n)

2. Every covered person’s AML/CFT Program shall include detailed

procedures implementing a comprehensive, institution-wide “know-
your-client” policy, set-up an effective dissemination of information on
money laundering and terrorism financing activities and their
prevention, detection and reporting, adopt internal policies, procedures
and controls, designate compliance officers at senior officer level,
institute adequate screening and recruitment procedures, provide an
ongoing employee training program, and set-up internal independent
audit and compliance functions to test the AML/CFT Program.

3. Covered persons shall adopt, as part of their AML/CFT Programs, a

system of flagging and monitoring transactions that qualify as
suspicious transactions or covered transactions. All covered persons
shall incorporate in their AML/CFT Programs the provisions of these
Rules and such other guidelines for reporting to the AMLC of all
transactions that engender the reasonable belief that a money
laundering offense is about to be, is being, or has been committed.

19.4. Training of Personnel - Covered persons shall provide all their responsible
officers and personnel with efficient and effective training and continuing
education programs to enable them to fully comply with all their obligations
under the AMLA, as amended, and these Rules.

19.5. Enrollment with the AMLC’s Reporting System– All Covered Persons not
registered with the AMLC’s electronic reporting system are hereby required to
enroll within ninety (90) days from the effectivity of these Rules. Covered
Persons which fail to register within the aforesaid period shall be subject to
the administrative sanctions provided under Section 16.5., without prejudice
to the criminal sanctions provided under the AMLA, as amended.

19.6. Monitoring of Compliance – To ensure compliance with the AMLA, as

amended, and these RIRRs, the AMLC may among others, conduct on-site
inspection, examination, audit, testing, and require submission of relevant
documents from covered persons referred to in 3.1.4 to 3.1.7. (n)

RULE XX - NON-INTERVENTION

Section 20. Non-intervention. - Nothing contained in the AMLA, as amended, or these

Rules nor in related antecedent laws or existing agreements shall be construed to allow
the AMLC to participate in any manner in the operations of the BIR.

RULE XXI - BUDGET OF THE AMLC

Section 21. Appropriations For and Budget of the AMLC.

21.1. Budget – The annual budget appropriated by Congress for the AMLC in the
General Appropriations Act shall be used to defray the capital, maintenance
and operational expenses of the AMLC. The BSP may advance the funds

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 necessary to defray the capital outlay, maintenance and other operating
expenses of the AMLC subject to reimbursement from the budget of the AMLC
as appropriated.

21.2. Costs and Expenses - The budget shall answer for indemnification for legal
costs and expenses reasonably incurred for the services of external counsel in
connection with any civil, criminal or administrative action, suit or proceeding
to which members of the AMLC and the Executive Director and other members
of the Secretariat may be made a party by reason of the performance of their
functions or duties. The costs and expenses incurred in defending the
aforementioned action, suit or proceeding may be paid by the AMLC in
advance of the final disposition of such action, suit or proceeding upon receipt
of an undertaking by or on behalf of the member to repay the amount
advanced should it be ultimately determined that said member is not entitled
to such indemnification.

RULE XXII - SEPARABILITY CLAUSE

Section 22. Separability Clause. – If any provision of these Rules or the application
thereof to any person or circumstance is held to be invalid, the other provisions of these
Rules, and the application of such provision or Rule to other persons or circumstances,
shall not be affected thereby.

RULE XXIII - REPEALING CLAUSE

Section 23. Repealing Clause. – All laws, decrees, executive orders, rules and
regulations or parts thereof, including the relevant provisions of Republic Act No. 1405,
as amended; Republic Act No. 6426, as amended; Republic Act No. 8791, as amended,
and other similar laws, as are inconsistent with the AMLA, as amended, are hereby
repealed, amended or modified accordingly; Provided, that the penal provisions shall not
apply to acts done prior to the effectivity of the AMLA on October 17, 2001.

RULE XXIV – EFFECTIVITY

Section 24. Effectivity. – These Rules shall take effect fifteen (15) days after complete
publication in the Official Gazette or in a newspaper of general circulation.

Approved this ____________________in the City of Manila.

By the Anti-Money Laundering Council:

AMANDO M. TETANGCO, JR.

Chairman
(Governor, Bangko Sentral ng Pilipinas)

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 TERESITA J. HERBOSA
Member
(Chairperson, Securities and Exchange Commission)

EMMANUEL F. DOOC
Member
(Commissioner, Insurance Commission)

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