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V. ANTI-MONEY LAUNDERING ACT (R.A. A. COVERED INSTITUTIONS AND THEIR

9160, AS AMENDED) OBLIGATIONS
TOPIC OUTLINE UNDER THE SYLLABUS
1. COVERED INSTITUTIONS
A. COVERED INSTITUTIONS AND THEIR
OBLIGATIONS a. Banks, non-banks, quasi-banks, trust
1. Covered Institutions entities, foreign exchange dealers,
2. Obligations of Covered Institution pawnshops, money changers, remittance
and transfer companies and other similar
B. COVERED AND SUSPICIOUS entities and all other persons and their
TRANSACTIONS subsidiaries and affiliates supervised or
1. Covered Transactions regulated by the Bangko Sentral ng
2. Suspicious Transactions Pilipinas (BSP) or regulated by the Bangko
Sentral ng Pilipinas (BSP)
C. SAFE HARBOR PROVISION b. insurance companies, pre-need companies
and all other persons supervised or
D. WHEN IS MONEY LAUNDERING regulated by the Insurance Commission
COMMITTED (INCLUDING PREDICATE (IC) (i) securities dealers, brokers,
CRIMES) salesmen, investment houses and other
1. When money laundering is committed similar persons managing securities or
2. Predicate crimes rendering services as investment agent,
advisor, or consultant, (ii) mutual funds,
E. AUTHORITY TO INQUIRE INTO BANK close-end investment companies, common
DEPOSITS trust funds, and other similar persons, and
1. Authority of the AMLC to inquire into a (iii) other entities administering or otherwise
deposit or investment dealing in currency, commodities or
2. CA action on application within 24 hours financial derivatives based thereon,
3. Authority of BSP to check compliance valuable objects, cash substitutes and
4. Definition of related accounts other similar monetary instruments or
5. Court order as requisite to inquiry property supervised or regulated by the
6. Authority to Inquire or Examine must Securities and Exchange Commission
comply with constitutional provisions on (SEC);
search and seizure c. jewelry dealers in precious metals, who, as
a business, trade in precious metals, for
F. FREEZING AND FORFEITURE transactions in excess of One million pesos
1. Freezing (P1,000,000.00);
2. Civil Forfeiture d. jewelry dealers in precious stones, who, as
a business, trade in precious stones, for
transactions in excess of One million pesos
(P1,000,000.00);
e. company service providers which, 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; and (iv)
acting as (or arranging for another person
to act as) a nominee shareholder for
another person;
f. persons who provide any of the following
services:

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g. managing of client money, securities or
other assets;
h. management of bank, savings or securities
accounts;
i. organization of contributions for the
creation, operation or management of
companies; and
j. creation, operation or management of
juridical persons or arrangements, and
buying and selling business entities.
k. casinos, including internet and ship-based
casinos, with respect to their casino cash
transactions related to their gaming
operations;
l. Real estate developers and brokers;
m. Offshore gaming operators, as well as their
service providers, supervised, accredited
or regulated by the Philippine Amusement
and Gaming Corporation (PAGCOR) or any
government agency.
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.
2. OBLIGATIONS OF COVERED
INSTITUTIONS
Covered institutions shall:
a. Establish and record the true identity of
their clients based on official documents
b. Maintain a system of verifying the true
identity of their clients and, in case of
corporate clients, require a system of
verifying their
1. Legal existence and
organizational structure
2. Authority and identification of all
persons purporting on their
behalf
c. Maintain and safely store all records of all
transactions for 5 years from the dates of
transactions
1. With respect to closed accounts,
the records on customer
identification, account files and
business correspondence, shall
be preserved and safely stored
COMMERCIAL LAW
for at least five (5) years from the
dates when they were closed.
d. Reporting to the AMLC all covered
transactions and suspicious transactions
within 5 working days from occurrence
thereof, unless the AMLC prescribes a
different period not exceeding 15 days
(Sec. 9)
B. COVERED AND SUSPICIOUS
TRANSACTIONS
1. COVERED TRANSACTIONS
a. Transaction in cash or other
equivalent monetary instrument
involving a total amount in excess of
Five hundred thousand pesos
(P500,000.00) within one (1)
banking day;
b. For casinos, including internet and
ship-based casinos, a single casino
cash transaction involving an
amount in excess of Five million
pesos (P5,000,000.00) or its
equivalent in any other currency;
c. For real estate developers and
brokers, a single cash transaction
involving an amount in excess of
Seven Million Five Hundred
Thousand Pesos (P7,500,000.00) or
its equivalent in any other currency.
(Sec. 3)
2. SUSPICIOUS TRANSACTIONS
'Suspicious transactions' are transactions with
covered persons, regardless of the amounts
involved, 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 Act;
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;
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f. The transaction is in any way related to an
unlawful activity or offense under this Act
that is about to be, is being or has been
committed; or
g. Any transaction that is similar or analogous
to any of the foregoing. (Sec. 3)
C. SAFE HARBOR PROVISION
No administrative, criminal or civil proceedings, shall
lie against any person for having made a covered or
suspicious transaction report in the regular
performance of his duties in good faith, whether or
not such reporting results in any criminal
prosecution under this Act or any other law. (Sec. 9)
D. WHEN IS MONEY LAUNDERING
COMMITTED (INCLUDING PREDICATE
CRIMES)
1. WHEN MONEY LAUNDERING IS
COMMITTED
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 this
Act to be reported to the Anti-Money Laundering
Council (AMLC), fails to do so.
COMMERCIAL LAW
2. PREDICATE CRIMES
'Unlawful activity ' refers to any act or omission or
series or combination thereof involving or having
relation to the following:
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. 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;
d. Plunder under Republic Act No. 7080, as
amended;
e. Robbery and extortion under Articles 294,
295, 296, 299, 300, 301 and 302 of the
Revised Penal Code, as amended;
f. Jueteng and Masiao punished as illegal
gambling under Presidential Decree No.
1602;
g. Piracy on the high seas under the Revised
Penal Code, as amended and Presidential
Decree No. 532;
h. Qualified theft under Article 310 of the RPC,
as amended;
i. Swindling under Article 315 and Other
Forms of Swindling under Article 316 of the
RPC, as amended;
j. Smuggling under RA 455 and RA 1937;
k. Violations of RA 8792 or the Electronic
Commerce Act of 2000;
l. Hijacking and other violations under RA
6235; destructive arson and murder, as
defined under the RPC, as amended;
m. Terrorism and conspiracy to commit
terrorism as defined and penalized under
Sections 3 and 4 of RA 9372;
n. Financing of terrorism under Section 4 and
offenses punishable under Sections 5, 6, 7
and 8 of RA 10168, or the Terrorism
Financing Prevention and Suppression Act
of 2012:
o. Bribery under Articles 210, 211 and 211-A
of the RPC, as amended, and Corruption of
Public Officers under Article 212 of the
RPC, as amended;
p. Frauds and Illegal Exactions and
Transactions under Articles 213, 214, 215
and 216 of the RPC as amended;
q. Malversation of Public Funds and Property
under Articles 217 and 222 of the RPC, as
amended;
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r. Forgeries and Counterfeiting under Articles
163, 166, 167, 168, 169 and 176 of the
RPC, as amended;
s. Violations of Sections 4 to 6 of RA. 9208, or
the Anti-Trafficking in Persons Act of 2003;
t. Violations of Sections 78 to 79 of Chapter
IV, of PD 705, or the Revised Forestry
Code of the Philippines, as amended;
u. Violations of Sections 86 to 106 of Chapter
VI, of RA 8550, or the Philippine Fisheries
Code of 1998;
v. Violations of Sections 101 to 107, and 110
of RA 7942, or the Philippine Mining Act of
1995;
w. Violations of Section 27(c), (e), (f), (g) and
(i), of RA 9147, or the Wildlife Resources
Conservation and Protection Act;
x. Violation of Section 7(b) of RA 9072, or the
National Caves and Cave Resources
Management Protection Act;
y. Violation of RA 6539, or the Anti-
Carnapping Act of 2002, as amended;
z. Violations of Sections 1, 3 and 5 of PD
1866, as amended, or the decree Codifying
the Laws on Illegal/Unlawful Possession,
Manufacture, Dealing In, Acquisition or
Disposition of Firearms, Ammunition or
Explosives;
aa. Violation of PD 1612, otherwise known as
the Anti-Fencing Law;
bb. Violation of Section 6 of RA 8042, or the
Migrant Workers and Overseas Filipinos
Act of 1995, as amended by Republic Act
No. 10022;
cc. Violation of RA 8293, or the Intellectual
Property Code of the Philippines;
dd. Violation of Section 4 of RA 9995, or the
Anti-Photo and Video Voyeurism Act of
2009;
ee. Violation of Section 4 of RA 9775, or the
Anti-Child Pornography Act of 2009;
ff. Violations of Sections 5, 7, 8, 9, 10(c), (d)
and (e), 11, 12 and 14 of RA 7610, or the
Special Protection of Children Against
Abuse, Exploitation and Discrimination;
gg. Fraudulent practices and other violations
under RA 8799, or the Securities
Regulation Code of 2000;
hh. Violation of Section 9 (a)(3) of Republic Act
No. 10697, otherwise known as the
"Strategic Trade Management Act", in
relation to the proliferation of weapons of
mass destruction and its financing pursuant
to United Nations Security Council
Resolution Numbers 1718 of 2006 and
2231 of 2015;
ii. Violation of Section 254 of Chapter
II, Title X of the National Internal Revenue
COMMERCIAL LAW
Code of 1997, as amended, where the
deficiency basic tax due in the final
assessment is in excess of Twenty-five
million pesos (P25,000,000.00) per taxable
year, for each tax type covered and there
has been a finding of probable cause by the
competent authority: Provided further, That
there must be a finding of fraud, willful
misrepresenting or malicious intent on the
part of the taxpayer: Provided, finally, That
in no case shall the AMLC institute
forfeiture proceedings to recover monetary
instruments, property or proceeds
representing, involving, or relating to a tax
crime, if the same has already been
recovered or collected by the Bureau of
Internal Revenue (BIR) in a separate
proceeding and
jj. Felonies or offenses of a similar nature that
are punishable under the penal laws of
other countries. (Sec. 2, RA 10365)
E. AUTHORITY TO INQUIRE INTO BANK
DEPOSITS
1. AUTHORITY OF THE AMLC TO
INQUIRE INTO A DEPOSIT OR
INVESTMENT; EX PARTE
APPLICATION
Notwithstanding the provisions of Republic Act No.
1405, as amended, R.A. No. 6426, as amended,
R.A. 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 upon order of any competent court
based on an ex parte application in cases of
violations of this Act, when it has been established
that there is probable cause that the deposits or
investments, including related accounts involved,
are related to an unlawful activity as defined in
Section 3(i) hereof or a money laundering
offense under Section 4 hereof; except that no
court order shall be required in cases involving
activities defined in Section 3(i)(1), (2), and (12)
hereof, and felonies or offenses of a nature defined
in Section 3(i)(1), (2), and (12) hereof, and felonies
or offenses of a nature similar to those
mentioned in Section 3(i)(1), (2), and (12), which
are Punishable under the penal laws of other
countries, and terrorism and conspiracy to
commit terrorism as defined and penalized under
Republic Act No. 9372.
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2. CA ACTION ON APPLICATION
WITHIN 24 HOURS
The Court of Appeals shall act on the
application to inquire into or examine any
depositor or investment with any banking institution
or non-bank financial institution within twenty-four
(24) hours from filing of the application.
3. AUTHORITY OF BSP TO CHECK
COMPLIANCE OF COVERED
INSTITUTIONS
To ensure compliance with this Act, the Bangko
Sentral ng Pilipinas may, in the course of a
periodic or special examination, check the
compliance of a Covered institution with the
requirements of the AMLA and its implementing
rules and regulations.
4. DEFINITION OF RELATED
ACCOUNTS
For purposes of this section, 'related accounts' shall
refer to accounts, the funds and sources of which
originated from and/or are materially linked to the
monetary instrument(s) or property(ies) subject of
the freeze order(s).
5. COURT ORDER AS REQUISITE TO
INQUIRY
A court order ex parte must first be obtained
before the AMLC can inquire into these related
Accounts: Provided, That the procedure for the ex
parte application of the ex parte court order for the
principal account shall be the same with that of
the related accounts.
6. AUTHORITY TO INQUIRE OR
EXAMINE MUST COMPLY WITH
CONSTITUTIONAL PROVISIONS ON
SEARCH AND SEIZURE
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.
F. FREEZING AND FORFEITURE
COMMERCIAL LAW
1. FREEZING
a. Period of effectivity of the
Freeze Order; Issuing Court
Upon a verified ex parte petition by the AMLC and
after determination that probable cause exists that
any monetary instrument or property is in any way
related to an unlawful activity as defined in Section
3(i) hereof, the Court of Appeals may issue a freeze
order which shall be effective immediately, for a
period of twenty (20) days.
The twenty (20)-day period may be extended after
the conduct of a summary hearing. However, the
total period of the freeze order issued by the Court
of Appeals shall not exceed six (6) months.
NOTE: If there is no case filed against a person
whose account has been frozen within the period
determined by the Court of Appeals, not exceeding
six (6) months, the freeze order shall be deemed
ipso facto lifted
b. Summary Hearing to Determine
Modification of Freeze Order;
Period; Total Period of Freeze
Order
Within the twenty (20)-day period, the Court of
Appeals shall conduct a summary hearing, with
notice to the parties, to determine whether or not
to modify or lift the freeze order, or extend its
effectivity.
c. Freeze order vis a vis Asset
preservation order of the RTC
This is without prejudice to an asset preservation
order that the Regional Trial Court having
jurisdiction over the appropriate anti-money
laundering case or civil forfeiture case may issue on
the same account depending on the circumstances
of the case, where the Court of Appeals will remand
the case and its records
d. Period within which Petition to
Freeze must be acted upon by
the CA
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In any case, the court should act on the petition to
freeze within twenty-four (24) hours from filing of the
petition. If the application is filed a day before a
nonworking day, the computation of the twenty-four
(24)-hour period shall exclude the nonworking days.
e. Scope of Freeze Order
The freeze order or asset preservation order issued
under this Act shall be limited only to the amount
of cash or monetary instrument or value of
property that court finds there is probable cause
to be considered as proceeds of a predicate
offense, and the freeze order or asset preservation
order shall not apply to amounts in the same
account in excess of the amount or value of the
proceeds of the predicate offense.
f. Motion to Lift Freeze Order
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.
g. Prohibition on courts against
injunction of freeze order;
exception
No court shall issue a temporary restraining order or
a writ of injunction against any freeze order, except
the Supreme Court.
h. Special rules on targeted
financial sanctions in relation
to proliferation of weapons of
mass destruction and their
financing
For purposes of implementing targeted financial
sanctions in relation to proliferation of weapons
of mass destruction and its financing, as
provided under Section 3(15), the AMLC shall have
the power to issue, ex parte, an order to freeze
without delay.
The freeze order shall be effective until the basis for
its issuance shall have been lifted. During the
effectivity of the freeze order, the aggrieved party
may, within twenty (20) days from issuance, file
with the Court of Appeals a petition to determine
the basis of the freeze order according to the
COMMERCIAL LAW
principle of effective judicial protection:
Provided, That the person whose property or funds
have been frozen may withdraw such sums as the
AMLC determines to be reasonably needed for
monthly family needs and sustenance including the
services of counsel and the family medical needs of
such person.
The AMLC, if circumstances warrant, may
initiate civil forfeiture proceedings to preserve
the assets and to protect it from dissipation. No
court shall issue a temporary restraining order or a
writ of injunction against the freeze order, except
the Court of Appeals or the Supreme Court.
2. CIVIL FORFEITURE
a. Filing of petition for forfeiture;
applicable rules
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 hereof, the
AMLC shall file with the appropriate court through
the Office of the Solicitor General, a verified ex
parte petition for forfeiture, and the Rules of
Court on Civil Forfeiture shall apply
b. Scope of forfeiture
The forfeiture shall include those other monetary
instrument or property having an equivalent
value 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 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 purposes of forfeiture.
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c. Claim on Forfeited assets e. Prohibition on courts against

injunction of preservations
Where the court has issued an order of forfeiture orders; exception
of the monetary instrument or property in a
criminal prosecution for any money laundering No court shall issue a temporary restraining order
offense defined under Section 4 of this Act, the (TRO) or a writ of injunction against any provisional
offender or any other person claiming an asset preservation order or asset preservation
interest therein may apply, by verified petition, for order, except the Court of Appeals or the
a declaration that the same legitimately belongs Supreme Court.
to him and for segregation or exclusion of the
monetary instrument or property corresponding
thereto.
-- end of topic --
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
the order of forfeiture, in default of which the said
order shall become final and executory. This
provision shall apply in both civil and criminal
forfeiture

d. 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, 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.

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