1. R.A.

10365 (Latest amendment of AMLA Act of 2001) Amending RA 10167, RA 9194 and RA 9160 “Anti-Money Laundering Act”
2. R.A. 10168 (The Terrorism Financing Prevention and Suppression Act of 2012)
3. BSP Cir. No. 706, Updated Anti-Money Laundering Rules & Regulations
4. AMLA Reporting Format 1

R.A. No. 9160 (2001)

 Anti – Money Laundering Act of 2001
R.A. No. 9194 (2003)
 Define ‘Covered Transaction’ as a transaction with a total amount in excess of P500,000.00 within one (1) banking day;
 Inclusion of Suspicious Transaction;
 Inclusion of penalty on the Breach of Confidentiality
R.A. No. 10167 (2012)
 Court of Appeals shall act on the petition to freeze within 24 hours from filing the petition;
 Only the Supreme Court can issue a TRO or writ of injunction;
 AMLC may inquire into or examine any particular deposit or investment, including related accounts upon order of any
competent court based on an ex parte application in cases of violations of this act.
R.A. No. 10168 (2012)
 The Terrorism Financing Prevention and Suppression Act of 2012;
 Humanitarian Exemptions
R.A. No. 10365 (2013)
 Expands the definition of Money Laundering as a crime;
 Expands coverage of covered persons;
 Covers more predicate crimes from 14 to 34 (including environmental crimes);
 Effectivity of Freeze Order – max of 6 months;
 Land Registration Authorities and Registries of Deeds are required to submit CTRs.

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.”
Stages of Money Laundering

Covered Persons (Section 3(a) of RA 10365)

1. Banks, non-banks, quasi-banks, trust entities, foreign exchange dealers, pawnshops, money changers, remittance and
transfer companies and other similar entities and all other persons and their subsidiaries and affiliates supervised or
regulated by the Bangko Sentral ng Pilipinas (BSP)
2. Insurance companies, pre-need companies and all other persons supervised or regulated by the Insurance Commission (IC)
3. (i) Securities dealers, brokers, salesmen, investment houses and other similar persons managing securities or rendering
services as investment agent, advisor, or consultant; (ii) Mutual funds, close-end investment companies, common trust
funds, and other similar persons; (iii) Other entities administering or otherwise dealing in currency, commodities or
financial derivatives based thereon, valuable objects, cash substitutes and other similar monetary instruments or property
supervised or regulated by the Securities and Exchange Commission (SEC)
4. Jewelry dealers in precious metals, who, as a business, trade in precious metals, for transactions in excess of One million
pesos (P1,000,000.00).
5. 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)
6. 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 (iv) Acting as (or arranging for another person to act as) a nominee shareholder for
another person
7. Persons who provide any of the following services:(i) Managing of client money, securities or other assets;(ii) Management
of bank, savings or securities accounts;(iii) Organization of contributions for the creation, operation or management of
companies; and (iv) Creation, operation or management of juridical persons or arrangements, and buying and selling
business entities.

Anti-Money Laundering Council

 the Philippines’ Financial Intelligence Unit (FIU) tasked to implement the AMLA.
Composition
1. Chairman of AMLC - BSP Governor
2. Members: SEC Chairperson and IC Commissioner
Functions of the AMLC
1. To require submission of and receive covered or suspicious transaction reports from covered persons.
2. To issue orders 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 CTR or STR or request assistance from a foreign state, or believed by
the Council on substantial evidence to be related to an unlawful activity.
3. Institute civil forfeiture proceedings and all other remedial proceeding through the Office of the Solicitor General.
4. Cause the filing of complaints with the Department of Justice of the Ombudsman for the prosecution of money laundering
offenses.
 5. Investigate suspicious transactions and covered transactions deemed suspicious after an investigation by AMLC, money
laundering activities, and other violations of AMLA.
6. To apply before the Court of Appeals, ex parte, for the freezing of any monetary instrument or property alleged to be the
proceeds of any unlawful activity.
 Court of Appeals must act on the petition to freeze w/in 24 hours from filing.
 The freeze order issued, upon determination that the monetary instrument or property is related to an unlawful
activity, is effective for a period not exceeding 6 months. It is deemed lifted if no case is filed within that period.
(Covered Person shall not lift the effects of the freeze order without securing official confirmation from the AMLC)
7. To impose administrative sanctions for the violation of laws, rules, regulations and orders and resolutions issued pursuant
thereto.
8. To develop educational programs on the pernicious effects of money laundering, the methods and techniques used in
money laundering, the viable means of preventing money laundering and the effective ways of prosecuting and punishing
offenders.

Elements of the Crime Money Laundering

 Proceeds - (monetary instrument or property)
 Overt act - (transaction, conversion, transfer, etc. / conspiracy to convert, transfer, etc. / attempt to convert, transfer, etc.)
 Knowledge - (that the proceeds represents, involves, or relates to the proceeds of the unlawful activity.

Unlawful Activities/Predicate Crimes

(Section 3(i) of RA 10365)
1. Kidnapping for ransom 28. Violation of the Migrant Workers and Overseas
2. Drug Trafficking Filipinos Act of 1995, as amended by RA 10022
3. Graft and Corrupt Practices Act 29. Violation of the Intellectual Property Code of the
4. Plunder under Republic Act No. 7080, as amended Philippines
5. Robbery and extortion 30. Photo and Video Voyeurism
6. Jueteng and Masiao 31. Child Pornography
7. Piracy on the high seas 32. Children Abuse, Exploitation and Discrimination
8. Qualified theft 33. Fraudulent practices and other violations under
9. Swindling Republic Act No. 8799, otherwise known as the
10. Smuggling Securities Regulation Code of 2000
11. Violations of Electronic Commerce Act of 2000 34. Felonies or offenses of a similar nature that are
12. Hijacking, destructive arson and murder punishable under the penal laws of other countries.
13. Terrorism and conspiracy to commit terrorism
14. Terrorism Financing
15. Bribery
16. Frauds and Illegal Exactions
17. Malversation of public funds and property
18. Forgeries and counterfeiting
19. Human Trafficking
20. Violations of the Revised Forestry Code of the
Philippines
21. Violations of the Philippine Fisheries Code of 1998
22. Violations of the Philippine Mining Act of 1995
23. Violations of the Wildlife Resources Conservation
and Protection Act
24. Violation of the National Caves and Cave Resources
Management Protection Act
25. Car napping
26. Illegal/Unlawful Possession, Manufacture, Dealing In,
Acquisition or Disposition of Firearms, Ammunition
or Explosives
27. Violation of Presidential Decree No. 1612, otherwise
known as the Anti-Fencing Law
AMLA’s 3 Major Requirements for Compliance by Covered Persons
1. Customer Identification and due diligence or Know Your Customer (KYC)
2. Reporting of Covered and Suspicious Transactions (Section 8(c) of RA 10365)
 All covered persons shall report to the AMLC all covered and suspicious transactions.
3. Record-keeping
AMLA Requirements on Banks Adequate KYC
AMLA Minimum Information Requirement – Individual
1. Name;
2. Present address;
3. Date and place of birth;
4. Nature of work, name of employer or nature of self-employment/business;
5. Contact details;
6. Specimen signature;
7. Source of funds;
8. Permanent address;
9. Nationality;
10. Tax identification number, Social Security System number or Government Service Insurance Number, if any; and
11. Name, present address, date and place of birth, nature of work and source of funds of beneficial owner or beneficiary,
whenever applicable
AMLA Minimum Information Requirement – Corporate & Juridical
1. Certificates of Registration issued by the Department of Trade and Industry 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;
2. Articles of incorporation or Association and By-Laws;
3. Principal business address;
4. Board or Partners' Resolution duly certified by the Corporate / Partners' Secretary authorizing the signatory to sign on behalf of
the entity;
5. Latest General Information Sheet which lists the names of directors / trustees / partners, principal stockholders owning at least
twenty percent (20%) of the outstanding capital stock and primary officers such as the President and Treasurer;
6. Contact numbers of the entity and authorized signatory/ies;
7. Source of funds and nature of business;
8. Name, present address, date and place of birth, nature of work and source of funds of beneficial owner or beneficiary, if
applicable; and
9. For entities registered outside the Philippines, similar documents and/or information shall be obtained duly authenticated by the
Philippine Consulate where said entities are registered.

Valid Identification Cards (IDs)

Valid photo-bearing identification document issued by an official authority.
“OFFICIAL AUTHORITY” refers to any of the following:
 Government of the Republic of the Philippines;
 Its political subdivisions and instrumentalities;
 Government-owned and/or Controlled Corporations (GOCCs); and
 Private Entities or Institutions Registered with or Supervised or Regulated either by the Bangko Sentral ng Pilipinas (BSP) or
Securities & Exchange Commission (SEC) or Insurance Commission (IC).
Latest BSP Circulars: BSP Circular No. 792, 706, 657 and 608
BSP Circular 706/792: Acceptable IDs with photograph
(series of 2011 and 2013 respectively):

1. Passport
2. Driver’s License
3. Professional Regulation Commission (PRC) ID
4. National Bureau of Investigation (NBI) Clearance
5. Police Clearance
6. Postal ID
7. Voter’s ID
8. Barangay Certification
9. Government Service Insurance System (GSIS) e-Card
10. Social Security System (SSS) ID
11. Senior Citizen Card
12. Overseas Workers Welfare Administration (OWWA) ID
13. OFW ID
14. Seaman’s Book
15. Alien Certification of Registration (ACR) / Immigrant Certificate of Registration (ICR)
16. Government Office and GOCC ID (e.g. Armed Forces of the Philippines (AFP ID), Home Development Mutual Fund (HDMF
ID)
17. Certification from the National Council for the Welfare of Disabled Persons (NCWDP)
18. Department of Social Welfare and Development (DSWD) Certification
19. Integrated Bar of the Philippines (IBP) ID
20. Tax Identification Number (TIN) ID
21. Company IDs issued by private entities or Institutions registered with or supervised or Regulated either by the BSP, SEC or
IC
22. Philhealth Health Insurance Card ng Bayan (BSP Circular 792 issued on May 03, 2013 – Valid Identification cards for
Financial Transactions)

Others:
 Photo-bearing school ID duly signed by principal – for STUDENTS
 Similar IDs duly signed by foreign government where the customer is resident / citizen – for FOREIGN CUSTOMERS

Adequate KYC Policies & Procedures

In no case shall reduce diligence be applied to high risk customers.

Clients are now being assessed using the internally developed Customer Risk Scoring.

Customer Risk Scoring

A process of evaluating individual or business clients' risk classification. This risk scoring includes parameters / criteria such as, but
not limited to the clients' background, source of funds, location, and type of products / transactions to be availed with the Bank.
This process also document on how a customer was profiled and what standard of due diligence to be applied.
 1. Adequate KYC Policies & Procedures
Customer Identification Process
As a general rule, no new account shall be opened and be created w/o face-to-face contact and personal interview except through
the following:
 Account opened through a trustee, nominee, agent, or intermediary (Subsec. 806.1.e.1)
 Outsourcing arrangement (Subsec. 806.1.e.2)
 Formally documented; Ultimate responsibility lies with the counterparty
 Third Party Reliance (Subsec. 806.2.e.1.a)
 Covered person shall obtain from 3rd party a Written Sworn Certification that the 3rd party conducted Customer
Identification process, including face-to-face requirements; and the covered person can obtain the identification
documents upon request w/o delay.

Politically Exposed Persons (PEP) (X806.2.g)

A single individual who is or has been entrusted with prominent public positions in the Philippines or in foreign state including:
 Head of state or of government;
 Senior politicians;
 Judicial or military officials;
 Senior executives of GOCC’s;
 Important officials of political parties

Things to do when dealing with a PEP:

1. Endeavor to establish the true and full identity of PEP
2. Endeavor to establish the true and full identity of immediate family members
3. Endeavor to establish the true and full identity of entities related to him
4. Apply the type of due diligence taking into consideration his position & risk attendant thereto.

Correspondent Banking (X806.2.h)

 A correspondent bank is a financial institution that provides services on behalf of another, equal or unequal, financial
institution. It can conduct business transactions, accept deposits and gather documents on behalf of the other financial
institution.
 Correspondent banking customers shall be subject to enhanced due diligence.

Shell companies / Shell banks (X806.2.n)

 A shell bank is a term that describes a financial institution that does not have a physical presence in any country. No actual
business. A non-trading company used as a vehicle for various financial maneuvers or kept dormant for future use in some
other capacity.
 A covered institution shall refuse to enter into, or continue, correspondent banking relationship with them.

Fund / Wire Transfer (X806.2.i)

 Beneficiary Institution shall not accept shall not accept instructions to pay-out fund transfers to non-customer beneficiary,
unless conducted the necessary customer due diligence to establish the true and full identity and existence of said
beneficiary.
 Originating institution shall not accept instructions to fund/wire transfer from a non-customer originator, unless conducted
the necessary customer due diligence to establish the true and full identity and existence of said originator.
 Cross border and domestic fund / wire transfers and related message amounting to P50,000 or more or its equivalent shall
include accurate and meaningful originator information;
a) Name of the originator;
b) Address or in its absence the national identity number or date and place of birth of the originator; and
c) Account number of the originator or in its absence, a unique reference number
  Should any wire transfer amounting to P50,000 or more or its equivalent be unaccompanied by the required originator
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.

Buyers of cashiers, managers, or certified checks (X806.2.j)

 Existing customers
1. True and full name of the buyer or the applicant if buying on behalf of an entity;
2. Account number; (3) Date of issuance and the number of the check; (4) Name of the payee; (5) Amount; and (6)
Purpose of such transaction.

 Other than existing customers

Obtain all the identification documents and minimum information required to establish the true and full identity and
existence of the applicant. In no case shall reduced due diligence be applied to the applicant and, where circumstances
warrant, enhanced due diligence should be applied.

 In Blank or payable to cash, bearer or numbered account

a. amount of each check shall not exceed P10,000;
b. buyer of the check is properly identified in accordance with its customer acceptance and identification policies
c. register of said checks indicating all the information require
d. shall take measure(s) to ensure that said instruments are not being used/resorted to by the buyer or depositor in
furtherance of a money laundering activity
e. deposit of said instruments shall be subject to the same requirements of scrutiny applicable to cash deposits
f. Transactions involving said instruments should be accordingly reported to the AMLC if there is reasonable ground
to suspect that said transactions are being used to launder funds of illegitimate origin.

Second endorsed Checks (X806.2.k)

 Shall limit the acceptance of second-endorsed checks from properly identified customers and only after establishing that
the nature of the business of said customer justifies, or at least makes practical, the deposit of second-endorsed checks.

Handling of client’s engage in Money Service Business (X806.2.l)

Foreign exchange dealers/money changers/remittance agents

 Shall submit a copy of the certificate of registration issued to them by the Bangko Sentral as part of their customer
identification document.
 Certificate of registration shall be for each head office, branch agent, sub-agent, extension office or business outlet of
foreign exchange dealers, money changers and remittance agents.
 Shall be subject to enhanced due diligence.

Numbered accounts (X806.2.o)

 Peso and foreign currency non-checking numbered accounts are allowed but the covered institution shall establish the true
and full identity and existence of the beneficial owners of such accounts and applying enhanced due diligence.

Prohibited accounts (X806.2.p)

 Anonymous accounts, accounts under fictitious names, numbered checking accounts, and all other similar accounts.

On-going monitoring of customers, accounts and Transactions (X806.3)

 Shall ensure that the true and full identity of the customers have been established
 Shall update all identification information and documents required to be obtained by the AMLA, as amended, its RIRR
 Has a system that will enable it to understand the normal and reasonable account activity of customers and detect unusual
or suspicious patterns of account activity
  Risk and materiality based on-going monitoring of customer’s accounts and transactions should be part of the customer
due diligence

2. Reporting of Covered Transaction (CTR) & Suspicious Transaction (STR)

Covered Transaction (Sec. 3(b) of AMLA, RIRR)

 A single transaction in cash or other equivalent monetary instrument involving a total amount in excess of Php500
thousand within one banking day.
 Multiple transactions or series of transactions with an amount of not more than Php500 thousand each, but whose total
amount exceeds the threshold amount, are NOT reportable as “Covered Transaction.”

Reporting (Sec. X807)

 Submitted to AMLC within 10 working days from occurrence thereof.

Deferred Reporting (Subsec. 807.1)

 The PSE, Philippine Central Depository, Securities Clearing Corporation of the Philippines and transfer agents are EXEMPT
from filing CTRs but are required to file STRs when the transactions that pass through them are deemed suspicious.

Suspicious Transactions (Sec. 3(b-1) of AMLA, RIRR)

 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 institution;
f) the transaction is in any way related to an unlawful activity or any money laundering activity or offense under the AMLA, as
amended, is being or has been committed;
g) any transaction that is similar, analogous or identical to any of the foregoing.
Reporting (Sec. X807)
 Submitted to AMLC within 10 working days from occurrence thereof.

3. Record Keeping Requirement

(Section X808)
Identification records: Maintained and safely stored as long as the account is active.
Transaction records: Maintained and safely store for 5 years from date of transaction.

(Subsec. X808.1)
Closed accounts: Preserve and safely store
4. Records on customer identification,
5. Account files, and
6. Business correspondences at least 5 years from date of closure.

(Subsec. X808.2)
Money laundering case filed in Court: Retained beyond 5 years.
Until confirmed that the case has been finally resolved or terminated by the court.
R.A. No. 10365 Criminal & Administrative Liabilities

Money Laundering Offenses / Penalties

1. Knowingly transacting or attempting to transact any monetary instrument or property which represents, involves or relates
to the proceeds of any unlawful activity (Money Launderer himself)
Penalty:
 7 to 14 years of imprisonment; and
 A fine of not less than P3M, but not more than twice the value of the monetary instrument or property.

2. Knowingly performing or failing to perform an act to any monetary instrument or property involving the proceeds of any
unlawful activity as a result of which he facilitated the offense of money laundering (The person assists the money
launderer)
Penalty:
 4 to 7 years of imprisonment; and
 A fine of not less than P1.5M, but not more than P3M.
3. Knowingly failing to disclose and file with the AMLC any monetary instrument or property required to be disclosed and
filed
Penalty:
 6 months to 4 years of imprisonment; or
 A fine of not less than P100k, but not more than P500k or both

For failure to keep records

Penalty:
 6 months to 1 year of imprisonment; or
 A fine of not less than P100k, but not more than P500k or both.

For malicious reporting

Penalty:
 6 months to 4 years of imprisonment; and
 A fine of not less than P100k, but not more than P500k; Provided that the offender is not entitled to avail the
benefits of the Probation Law. (Sec. 14(c), AMLA)

For breach of confidentiality

Penalty:
 3 to 8 years of imprisonment; and
 A fine of not less than P500k, but not more than P1M.

Administrative Offenses

1. Violations by any covered person, its directors, officers or employees of: (i) the AMLA, as amended; and (ii) Revised
Implementing Rules and regulations.

2. Failure or refusal by any of the said persons to comply with AMLC orders, resolutions and issuances
Sanctions:
1. Warning or reprimand
2. Monetary Penalty of fine that is with the range of not more than Php500 thousand.
3. Fine of 200% of the value of the monetary instrument or property in cases of money laundering and the covered
person participated therein.
Other Offenses under RA 9160, as amended Safe Harbor Provision

 When reporting covered or suspicious transactions to the AMLC, covered persons and their officers shall not be deemed to
have violated Republic Act No. 1405, as amended, Republic Act No. 6426, as amended, republic Act No. 8791 and other
similar laws. (Sec. 9, AMLA)
 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.

Crimes and Losses Report (BSP Cir. 587)

 A type of report required to be submitted to BSP for any crime or transaction related loss.
1. To BSP Supervisory Data Center (SDC) & BSP Security, Investigation and Transport Department
(SITD)
2. Shall submit initial report within (10) calendar days from knowledge of the crime/incident.
3. Shall submit final report not later than twenty (20) calendar days from termination of investigation.

Reportable under Crimes and Losses

1. Estafa
2. Theft
3. Robbery
4. Falsification
5. Credit Card Related
6. Other Crimes that may Cause Loss to the Bank
7. Negligence
8. Non-Crime Related Loss
9. Insider
10. Outsider
11. Perpetrator
12. Victim
13. Attempted Crime
14. Frustrated Crime
15. Consummated Crime
16. Termination of the Investigation

Office of Financial Assets & Control (OFAC)

 It administers and enforces economic and trade sanctions based on US foreign policy and national security goals against
targeted foreign countries and regimes, terrorists, international narcotics traffickers, those engaged in activities related to
the proliferation of weapons of mass destruction, and other threats to the national security, foreign policy or economy of
the United States.
Sanctioned Countries
1. Western Balkans (Montenegro, Serbia, Republic of 12. Lebanon
Macedonia, Bosnia, Herzegovina, Croatia, Kosovo, Albania 13. Former Liberian Regime of Charles Taylor (Archived of
and Yugoslavia) inactive sanctions program)
2. Belarus 14. Libya
3. Burma (Myanmar) 15. North Korea
4. Burundi 16. Somalia
5. Central African Republic (CAR) 17. Sudan
6. Columbia (Drug Cartels only) 18. South Sudan
7. Cote d’ Ivoire (Ivory Coast) 19. Syria
8. Cuba 20. Ukraine/Russia
9. Democratic Republic of Congo 21. Venezuela
10. Iran 22. Yemen
11. Iraq 23. Zimbabwe
Financial Action Task Force (FATF)
 An international body based in Paris, France formed by G-7 in 1989 with a mission of paving the way for the effective
prevention and detection of money laundering, and later to include terrorism financing, by ensuring that appropriate
measures against money laundering, and terrorism financing, are implemented in all nations.
High-Risk and Non-cooperative jurisdictions:
1. Afghanistan
2. Bosnia and Herzegovina
3. Democratic People’s Republic of Korea (DPRK)
4. Guyana
5. Iran – (OFAC Sanctioned Countries)
6. Iraq - (OFAC Sanctioned Countries)
7. Lao People’s Democratic Republic
8. Syria - (OFAC Sanctioned Countries)
9. Uganda
10. Vanuatu
11. Yemen - (OFAC Sanctioned Countries)