Amendments to the Anti-Money Laundering Act: Legal and Practical

Considerations
—Reginald Anton J. Puno, Partner
—Mitchel Q. Tuazon, Associate

On 30 January 2021, Republic Act (“RA”) No. 11521, which further amended RA No. 9160 or
the Anti-Money Laundering Act of the Philippines (“AMLA”), took effect. These amendments
to the AMLA were essentially a response to calls from the international watchdog, Financial
Action Task Force (“FATF”), to strengthen our laws against “dirty money” to avoid falling
under the FATF’s gray list.[1]

In light of these recent amendments, there are legal and practical points to consider, in order to
ensure compliance with the law and its implementing rules and regulations.

Real Estate Brokers/Developers and Offshore Gaming Operators/Service Providers – Now

Covered Persons

Under the amendments to the AMLA, “Covered Persons” have been expanded and now also
refer to real estate developers and brokers and regulated offshore gaming operators and service
providers.[2] This continues the trend of widening the scope of the law to prevent money
laundering and terrorist financing activities across different sectors. Previously in 2017, casinos
were already added to the list of Covered Persons.[3]

With the recent amendments, these persons engaged in the business of real estate and offshore
gaming are now mandated to: (i) register and (ii) report all covered and suspicious
transactions[4] to the Anti-Money Laundering Council (“AMLC”). Registration of Covered
Persons with the AMLC is required under the 2018 AMLA Implementing Rules and Regulations
(“IRR”), as amended.[5] Registration is a prerequisite to reporting, the latter required by the
AMLA itself.[6]

To register, a Covered Person or its compliance officer shall access AMLC’s online registration
portal. The compliance officer shall first ensure that documents or certificates showing his/her
designation/appointment are in order. Then, the compliance officer must follow AMLC’s
transaction security protocols by creating a key ID. The compliance officer can then proceed
with the online registration and input all the required information. Thereafter, the AMLC
Secretariat will issue a Certificate of Registration[7] to the Covered Persons.

As mentioned prior, once Covered Persons are registered, they must now report all covered and
suspicious transactions generally within five (5) working days from the transaction/s in question.
[8] For real estate developers and brokers, a covered transaction refers to a single cash
transaction involving an amount in excess of Php7,500,000.00.[9] For offshore gaming
operators/service providers however, the general threshold amount of more than Php500,000.00
applies.[10]

Reporting these transactions is done through the submission of covered transaction reports
(“CTRs”) and/or suspicious transaction reports (“STRs”), which is likewise done through
AMLC’s online portal.[11]

The importance of submitting CTRs and STRs cannot be overemphasized. Under the 2019
AMLA Rules of Procedure on Administrative Cases, non-registration of a Covered Person
subjects itself to fines and administrative sanctions, the amount of which will depend on the size
of the entity.[12] Meanwhile, failure to comply with the reporting requirement is already
tantamount to money laundering under the AMLA.[13]
[Author’s Note: As of date, the AMLC is in the process of setting a new registration deadline which was initially set
on 16 March 2021. The period of 05 April 2021 to 14 May 2021 is likewise considered workday suspensions for
purposes of computing the period to submit CTRs and STRs.][14]

Expansion of List of Predicate Crimes/Unlawful Activities

The recent amendments to the AMLA also added to the list of unlawful activities or predicate
crimes with corresponding criminal penalties. Now, the (i) violation of the Strategic Trade
Management Act[15] relating to the proliferation of weapons of mass destruction and
proliferation financing and (ii) tax evasion, where the deficiency tax in the final assessment in
excess of Php25,000,000.00 per taxable year for each tax type covered and there being previous
finding of probable cause by a competent authority, are considered to be unlawful activities
under the AMLA.[16]

Thus, when any person, knowing that any monetary instrument or property relates to proceeds of
these unlawful activities, transacts said monetary instrument or property, then that person is
considered to have committed money laundering.[17]

For proliferation of weapons of mass destruction and proliferation financing, the AMLC may
issue Targeted Financial Sanctions (“TFS”), which refer to asset freezing and prohibition to
prevent funds or other assets from being made available to entities designated pursuant to United
Nations Security Council resolutions.[18]

For tax evasion, it is important to note that the AMLC may not institute forfeiture proceedings to
recover money or property relating to such tax crime, if the same has already been recovered by
the BIR in a separate proceeding.[19]

Additional Functions for the AMLC

The amendments to the AMLA also expanded the functions of the AMLC. Now, the AMLC, in
the conduct of investigations, has the power to apply for the issuance of search and seizure
orders with any competent court.[20] In like manner, the AMLC may also apply for the issuance
of subpoena duces tecum and/or subpoena ad testificandum.[21] As mentioned, the AMLC also
has the power to implement TFS.[22] Lastly, the AMLC, through an Asset Management Unit, is
now tasked with preserving, managing, or disposing assets pursuant to a freeze order, asset
preservation order, or judgment of forfeiture.[23]

Final Note

We encourage persons engaged in real estate and offshore gaming to carefully review the recent
amendments to the AMLA and ensure faithful compliance thereto. Emphasis must be placed on
registration and reportorial requirements for Covered Persons, especially considering potential,
not to mention hefty, liabilities.

[1] This list refers to jurisdictions which have strategic deficiencies in their regimes to counter money laundering
and are thus placed under FATF’s increased monitoring.

[2] The Anti-Money Laundering Act (“AMLA”), as amended by RA Nos. 9194, 10167, 10365, 10927, and 11521,
Section 3(a)(9) and (10).

[3] Id., Section 3(a)(8)

[4] Under Section 3(b-1) of the AMLA, a suspicious transaction refers to those made with covered persons,
regardless of amount, where: 1. there is no underlying legal or trade obligation, purpose or economic justification; 2.
the client is not properly identified; 3. the amount involved is not commensurate with the business or financial
capacity of the client; 4. 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; 5. 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 institution; 6. 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 7. any transaction that is similar or
analogous to any of the foregoing.