Anti-Money Laundering Act

_____________________________________________________________________

Anti-Money Laundering Act of 2001, as amended

(Republic Act 9160, 9194, 10167, 10365, 10927)

RATIONALE:
The Philippines, while striving to sustain economic development and poverty alleviation
through, among others, corporate governance and public office transparency, must
contribute its share and play a vital role in the global fight against money laundering.
Hence, the compelling need to enact responsive anti-money laundering legislation in
order to establish and strengthen an anti-money laundering regime in the country which
will not only increase investor’s confidence but also ensure that the Philippines is not
used as a site to launder proceeds of unlawful activities.

Brief History of the AMLA

October 2001 RA 9160 and its IRR was enacted
March 2003 First amendment, RA 9194
* The threshold for a covered transaction was reduced from 4 million to
P500,000
June 2012 Second amendment, RA 10167
* Amendment relating to freezing of monetary instrument and the and
the authority to inquire into bank deposits
February 2013 Third amendment, RA 10365
* expanded the crime of money laundering
July 2016 Fourth amendment, RA 10927
* included casinos, internet and ship-based gaming transactions

Salient Features

➢ Criminalizes money laundering

➢ Creates a financial intelligence unit

➢ Imposes requirements on customer identification, record keeping and reporting of

covered and suspicious transactions

➢ Relaxes strict bank deposits secrecy laws

➢ Provides for bank inquiry and freeze ex parte petition/seizure/forfeiture/recovery of

dirty money/property

➢ Provides for international cooperation

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Laundering

➢ The term used to describe investment or other transfer of money flowing from
racketeering, drug transactions, and other illegal sources into legitimate channels so
that its original source cannot be traced1.

Money Laundering

➢ Money laundering is a crime whereby the proceeds of an unlawful activity are

transacted; thereby making them appear to have originated from legitimate sources 2.

A. Covered Institutions and their Obligations

Covered Institutions (Persons3) natural or juridical, refer to:

(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, and (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 metals4, who, as a business, trade in precious metals, for
transactions in excess of One million pesos (P1,000,000.00);
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(5) jewelry dealers in precious stones5, who, as a business, trade in precious stones, for
transactions in excess of One million pesos (P1,000,000.00);

1 Black’s Law Dictionary, 6th Edition

2 Sec. 4, RA 9160
3 Sec. 1, RA 10365
4 refers to 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.

5 refers to all gems and stones used in jewelry making, such as 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, opal and pearl.

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 (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; and (iv) acting as (or arranging for another person to act
as) a nominee shareholder for another person; and

(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.

(8) casinos, including internet and ship-based casinos, with respect to their casino cash
transactions related to they gaming operations6.

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.

Obligations of Covered Person/s

(a) Customer Identification7

Covered institutions 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.

The provisions of existing laws to the contrary notwithstanding, anonymous accounts,

accounts under fictitious names, and all other similar accounts shall be absolutely
prohibited. Peso and foreign currency non-checking numbered accounts shall be

6 Sec. 1, RA 10927
7 Sec. 9, RA 9160

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 allowed. The BSP may conduct annual testing solely limited to the determination of the
existence and true identity of the owners of such accounts.

(b) Record Keeping8

All records of all transactions of covered institutions shall be maintained and safely
stored for five (5) years from the dates of transactions. 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.

(c) Reporting of Covered and Suspicious Transactions9

Covered persons shall report to the AMLC all covered transactions and suspicious
transactions within five (5) working days from occurrence thereof, unless the AMLC
prescribes a different period not exceeding fifteen (15) working days.

Lawyers and accountants acting as independent legal professionals are not required to
report covered and suspicious transactions if the relevant information was obtained in
circumstances where they are subject to professional secrecy or legal professional
privilege.

B. Covered and Suspicious Transactions

“Covered Transaction10” refers to:

(1) A transaction in cash or other equivalent monetary instrument exceeding Five

Hundred Thousand pesos (PHP500,000.00).

(2) A transaction with or involving jewelry dealers, dealers in precious metals and
dealers in precious stones in cash or other equivalent monetary instrument
exceeding One Million pesos (Php1,000,000.00).

(3) A casino cash transaction exceeding Five Million Pesos

(PHP5,000,000.00) or its equivalent in other currency.

“Covered Transaction Report11” (CTR)

➢ refers to a report on a covered transaction, as herein defined, filed by a covered person

before the AMLC.

“Suspicious Transaction12”

8 Sec. 9, RA 9160
9 Sec. 7, RA 10365 amending RA 9160 Sec. 9
10 Sec. 1, Rule 2 of the 2018 Implementing Rules and Regulations of RA 9160, as Amended (2018
IRR)
11 Sec. 1, Rule 2, 2018 IRR
12 Sec. 1, Rule 2, 2018 IRR

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 ➢ refers to a transaction, regardless of amount, where any of the suspicious
circumstances, as herein defined, is determined, based on suspicion or, if
available, reasonable grounds, to be existing.

“Suspicious Transaction Report13” (STR)

➢ refers to a report on a suspicious transaction, as herein defined, filed by a covered

person before the AMLC.

“Suspicious Circumstance14”

➢ refers to any of the following circumstances, the existence of which makes a

transaction suspicious:

(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 AMLA;

(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
person;

(6) The transaction is in any way related to ML/TF or related unlawful activity that is
about to be committed, is being or has been committed; or

(7) Any transaction that is similar, analogous or identical to any of the foregoing,
such as the relevant transactions in related and materially-linked accounts, as
herein defined.

Reporting of Covered and Suspicious Transactions15

➢ Covered persons shall report to the AMLC all covered transactions and suspicious
transactions within five (5) working days from occurrence thereof, unless the
AMLC prescribes a different period not exceeding fifteen (15) working days.

C. Safe Harbor Provision

No administrative, criminal or civil proceedings shall lie against any person for having
made a covered transaction (CTR) or suspicious transaction report (STR) in the regular
13 Sec. 1, Rule 2, 2018 IRR
14 Sec. 1, Rule 2
15 Sec. 7, RA 10365 amending RA 9160 Sec. 9 (c)

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 performance of his/her duties and in good faith, whether or not such reporting results in
any criminal prosecution under the AMLA or any other Philippine law. 16

D. How Money Laundering Committed and Predicate Crimes

How Money Laundering Committed

Money laundering is committed17 by any person who, knowing that any monetary instrument
or property represents, involves, or relates to the proceeds of any unlawful activity18:

(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.

“Predicate Offence19/Crime”

➢ Refers to an offence/crime whose proceeds may become the subject of any of the
money-laundering offence.

➢ Under Philippine Law, Predicate crimes are synonymous with Unlawful activity
as defined below.

‘Unlawful activity202121’ refers to any act or omission or series or combination thereof

involving or having direct relation to the following:

16 Sec. 5, Rule 22, 2018 IRR

17 Sec. 4, RA 10365 amending RA 9160 Sec. 4
18 Please refer to the enumeration below of Unlawful Activity or Predicate Crimes.
19 UNODC Legislative Framework
20 Sec. 2 RA 10365 amending RA 9160 Sec. 3 (i)
21 Bar Question in Mercantile Law: Name at least five predicate crimes to money laundering.
(5%)

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(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;

(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;

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

(5) Robbery and extortion under Articles 294, 295, 296, 299, 300, 301 and 302 of
the Revised Penal Code, as amended;

(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;

(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;

(10) Smuggling under Republic Act Nos. 455 and 1937;

(11) Violations of Republic Act No. 8792, otherwise known as the Electronic
Commerce Act of 2000;

(12) Hijacking and other violations under Republic Act No. 6235; destructive arson
and murder, as defined under the Revised Penal Code, as amended;

(13) Terrorism and conspiracy to commit terrorism as defined and penalized under
Sections 3 and 4 of Republic Act No. 9372;

(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:

(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;

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

(17) Malversation of Public Funds and Property under Articles 217 and 222 of the
Revised Penal Code, as amended;

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

(19) Violations of Sections 4 to 6 of Republic Act No. 9208, otherwise known as the
Anti-Trafficking in Persons Act of 2003;

(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;

(21) Violations of Sections 86 to 106 of Chapter VI, of Republic Act No.

8550, otherwise known as the Philippine Fisheries Code of 1998;

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

(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;

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

(25) Violation of Republic Act No. 6539, otherwise known as the AntiCarnapping
Act of 2002, as amended;

(26) Violations of Sections 1, 3 and 5 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;

(27) Violation of Presidential Decree No. 1612, otherwise known as the AntiFencing
Law;

(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;

(29) Violation of Republic Act No. 8293, otherwise known as the Intellectual
Property Code of the Philippines;

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

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

(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;

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

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 (34) Felonies or offenses of a similar nature that are punishable under the penal laws
of other countries.

How is money laundered through the financial system?22 2324

• Placement – involves initial placement or introduction of the illegal funds into

the financial system. Financial institutions are usually used at this point.

• Layering – involves a series of financial transactions during which the dirty

money is passed through a series of procedures, putting layer upon layer of
persons and financial activities into the laundering process. Ex.
wire transfers, use of shell corporations, etc.

• Integration – the money is once again made available to the criminal with the
occupational and geographic origin obscured or concealed. The laundered funds
are now integrated back into the legitimate economy through the purchase of
properties, businesses and other investments.

E. Authority to Inquire into Bank Deposits

Authority to Inquire into Bank Deposits24

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 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 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.”

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.

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.

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).

22 Frequently Asked Question on Anti Money Laundering - Bangko Sentral ng Pilipinas (BSP)
23 Some author designate the same as the “Stages of Money Laundering” See: Ignacio, L. 854 SCRA
24 - Basic Queries about Money Laundering and the Anti-Money Laundering Act (AMLA) 24
Sec 2, RA 10617 amending RA 9160 Sec. 11

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 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.

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.

May the AMLC inquire into or examine bank deposits or investments without violating
the secrecy of bank deposits law and similar laws?25

YES.

Notwithstanding the provisions of RA No. 1405 (Secrecy of Bank Deposits), RA No. 6426
(Foreign Currency Deposits Acts), RA No. 8791 (General Banking Law) and other laws, the
AMLC may inquire or examine any particular deposit or investment, including related
accounts, with any banking institution or nonbank financial institutions (Sec. 11, AMLA, as
amended by RA 10167). Bank inquiry may be with or without a court order.

a) Inquiry of bank deposits WITH court order

Bank inquiry order maybe availed of ex parte premised on the existence of probable cause for
violation of an unlawful activity under Sec. 3(i) or money laundering offense under Sec. 4.

Inquiry includes related accounts which shall refer to accounts, the funds and sources of
which originated from and/or are materially linked to the monetary instruments(s) or
property(ies) subject of the freeze order(s).
The Court of Appeals shall act on the application to inquire into or examine any deposit or
investment with any banking institution or nonbank financial institution within twenty-four
(24) hours from filing of the application. (RA 10167)

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 (RA
10167). Likewise, the constitutional injunction against ex post facto laws and bills of attainder
shall be respected in the implementation of the AMLA (RA 10365).

b) Inquiry of bank deposits WITHOUT a court order

Bank inquiry without need of a court order is possible in the following instances:

(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, 12, 13, 14, 15, and 16 of RA No. 9165, otherwise known as
the Comprehensive Dangerous Drugs Act of 2002;

25 Ignacio, L. 854 SCRA 658

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(3) Hijacking and other violations under RA No. 6235; destructive arson and murder, as
defined under the Revised Penal Code, as amended; and

(4) Terrorism and conspiracy to commit terrorism as defined and penalized in RA 9372
(Human Security Act).

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What is the Anti-Money Laundering Council (AMLC)? What are its powers?
• The AMLC is the Philippines’ financial intelligence unit, which is tasked to
implement the AMLA. It is composed of the Governor of the Bangko Sentral ng
Pilipinas (BSP) as Chairman & the Commissioner of the Insurance Commission (IC)
and the Chairman of the Securities and Exchange Commission (SEC) as members.
The AMLC is authorized to:
• Require and receive covered or suspicious transaction reports from covered
institutions.
• Issue orders to determine the true identity of the owner of any monetary instrument or
property that is the subject of a covered or suspicious transaction report, and to request
the assistance of a foreign country if the Council believes it is necessary.
• Institute civil forfeiture and all other remedial proceedings through the Office of the
Solicitor General.
• Cause the filing of complaints with the Department of Justice or the Ombudsman for
the prosecution of money laundering offenses.
• Investigate suspicious transactions, covered transactions deemed suspicious, money
laundering activities and other violations of the AMLA.
• Secure the order of the Court of Appeals to freeze any monetary instrument or
property alleged to be the proceeds of unlawful activity.
• Implement such measures as may be necessary and justified to counteract money
laundering.
• Receive and take action on any request from foreign countries for assistance in their
own anti-money laundering operations.
• Develop educational programs to make the public aware of the pernicious effects of
money laundering and how they can participate in bringing the offenders to the fold of
the law.
• Enlist the assistance of any branch of government for the prevention, detection and
investigation of money laundering offenses and the prosecution of offenders. In this
connection, the AMLC can require intelligence agencies of the government to divulge
any information that will facilitate the work of the Council in going after money
launderers.
• Impose administrative sanctions on those who violate the law, and the rules,
regulations, orders and resolutions issued in connection with the enforcement of the
law.

What are the sanctions for failure to report covered or suspicious transactions?
• Any person, required to report covered and suspicious transactions failed to do so will
be subjected to penalty of 6 months to 4 years imprisonment or a fine of not less than
P100,000.00 but not more than P500,000.00, or both.

Are there confidentiality restrictions on the reporting of covered transaction and/or

suspicious transaction?

• When reporting covered transactions or suspicious transactions to the AMLC, covered

institutions and their officers and employees, are prohibited from communicating,
directly or indirectly, in any manner or by any means, to any person, entity, the media,
the fact that a covered or suspicious transaction report was made, the contents thereof,
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 institution, or media shall be held criminally liable.

What are the other offenses punishable under the AMLA, as amended?
• Failure to keep records is committed by any responsible official or employee of a
covered institution who fails to maintain and safely store all records of transactions for

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 5 years from the dates the transactions were made or when the accounts were closed.
The penalty is 6 months to 1 year imprisonment or a fine of not less than P100,000.00
but not more than P500,000.00, or both.
• Malicious reporting is committed by any person who, with malice or in bad faith,
reports or files a completely unwarranted or false information regarding a money
laundering transaction against any person. The penalty is 6 months to 4 years
imprisonment and a fine of not less than P100,000.00 but not more than P500,000.00.
The offender is not entitled to the benefits of the Probation Law.
• Breach of Confidentiality. For this offense, the penalty is 3 to 8 years imprisonment
and a fine of not less than P500,000.00 but not more than P1 million. In case the
prohibited information is reported by media, the responsible reporter, writer,
president, publisher, manager, and editor-in-chief are held criminally liable.
• Administrative offenses. The AMLC, after due investigation, can impose fines from
P100,000.00 to P500,000.00 on officers and employees of covered institutions or any
person who violates the provisions of the AMLA, as amended, the Implementing
Rules and Regulations, and orders and resolutions issued pursuant thereto.

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Jurisprudence

Republic of the Philippines v. Hon. Antonio Eugenio, Jr.

G.R. No 174629

Facts:
Under the authority granted by the Resolution, the AMLC filed an application to inquire into
or examine the deposits or investments of Alvarez, Trinidad, Liongson and Cheng Yong with
the Makati RTC. The RTC granted the authority to inquire and examine the subject bank
accounts of Alvarez, Trinidad, Liongson and Cheng Yong, the trial court being satisfied that
there existed probable cause [to] believe that the deposits in various bank accounts, details of
which appear are related to the offense of violation of Anti-Graft and Corrupt Practices Act
now the subject of criminal prosecution before the Sandiganbayan. Pursuant to the Makati
RTC bank inquiry order, the CIS proceeded to inquire and examine the deposits, investments
and related web accounts of the four.

The letter adverted to probable cause to believe that the bank accounts were used in the
commission of unlawful activities that were committed a in relation to the criminal cases then
pending before the Sandiganbayan. Attached to the letter was a memorandum on why the
investigation of the [accounts] is necessary in the prosecution of the above criminal cases
before the Sandiganbayan. The AMLC promulgated on 9 December 2005 Resolution No. 121
Series of 2005 which authorized the executive director of the AMLC to inquire into and
examine the accounts named in the letter, including one maintained by Alvarez with DBS
Bank and two other accounts in the name of Cheng Yong with Metrobank. Cheng Yong
refused to have the account examined on ground of the Bank Secrecy Act.

Issue: Whether or not the bank accounts of respondents can be examined.

Held:
Any exception to the rule of absolute confidentiality must be specifically legislated.
Section 2 of the Bank Secrecy Act itself prescribes exceptions whereby these bank accounts
may be examined by any person, government official, bureau or official; namely when: (1)
upon written permission of the depositor; (2) in cases of impeachment; (3) the examination of
bank accounts is upon order of a competent court in cases of bribery or dereliction of duty of
public officials; and (4) the money deposited or invested is the subject matter of the litigation.
Section 8 of R.A. Act No. 3019, the Anti-Graft and Corrupt Practices Act, has been
recognized by this Court as constituting an additional exception to the rule of absolute
confidentiality, and there have been other similar recognitions as well.

The AMLA also provides exceptions to the Bank Secrecy Act. Under Section 11, the
AMLC may inquire into a bank account upon order of any competent court in cases of
violation of the AMLA, it having been established that there is probable cause that the
deposits or investments are related to unlawful activities as defined in Section 3(i) of the law,
or a money laundering offense under Section 4 thereof. It cannot be successfully argued the
proceedings relating to the bank inquiry order under Section 11 of the AMLA is a litigation
encompassed in one of the exceptions to the Bank Secrecy Act which is when money
deposited or invested is the subject matter of the litigation. Nevertheless, just because the
AMLA establishes additional exceptions to the Bank Secrecy Act it does not mean that the
later law has dispensed with the general principle established in the older law that all deposits
of whatever nature with banks or banking institutions in the Philippines x x x are hereby
considered as of an absolutely confidential nature. Indeed, by force of statute, all bank
deposits are absolutely confidential, and that nature is unaltered even by the legislated
exceptions referred to above.

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15
G.R. No. 170281
REPUBLIC OF THE PHILIPPINES, represented by the ANTI-
MONEYLAUNDERING COUNCIL VS. GLASGOW CREDIT ANDCOLLECTION
SERVICES, INC. and CITYSTATE SAVINGS BANK, INC.

FACTS:
On July 18, 2003, petitioner filed a complaint for civil forfeiture of assets with the RTC of
Manila against the bank deposits in account number CS – 005-10-000121-5 maintained by
GLASGOW in CSBI. The case was filed pursuant to RA 9160 or the Anti-Money Laundering
Act of 2001.On July 21, 2003, the RTC of Manila issued a 72-hour TRO. And on August8,
2003 a writ of preliminary injunction was issued. Meanwhile, summons to GLASGOW was
returned “unserved” as it could no longer be found at its last known address.

On May 31, 2004, the trial court ordered the reinstatement of the case directing the Republic
to serve the alias summons to Glasgow and CSBI within 15days.On July 12, 2004, petitioner
received a copy of the sheriff’s return stating that the alias summons was returned “unserved”
as GLASGOW was no longer holding office at the given address since July 2002.On August
11, 2005, petitioner filed a manifestation and ex parte motion to resolve its motion for leave
of court to serve summons by publication. On August 12, 2005, the OSG received a copy of
GLASGOW’s motion to dismiss by way of special appearance alleging that 1) the court had
no jurisdiction over its person as summons had not yet been served on it 2) the complaint was
premature and stated no cause of action and 3) there was failure to prosecute on the part of
the Republic. On October 17, 2005, the trial court dismissed the case on the grounds of
1)improper venue
2) insufficiency of the complaint in form and substance and
3) failure to prosecute and lifted the writ of preliminary injunction. Petitioner filed a petition
for review.

ISSUE: Whether or not the complaint for civil forfeiture was properly instituted.

RULING:
Sec. 12 (a) of RA 9160 provides two conditions when applying for civilforfeiture:1.when
there is suspicious transaction report or a covered transaction report deemed suspicious after
investigation by the AMLC;2.the court has, in a petition filed for the purpose; ordered the
seizure of any monetary instrument or property, in whole or in part, directly or indirectly,
related to said report.
 
It is the preliminary seizure of the property in question which brings it within the reach of the
judicial process. It is actually within the courts possession when it is submitted to the process
of the court. The injunctive writ issued on August 8, 2003 removed account no. CA-005-10-
000121-5 from the effective control of either Glasgow or CSBI or their representatives or
agents and subjected it to the process of the court.

Whether or not there is truth in the allegation that account no. CA-005-10-000121-5 contains
the proceeds of unlawful activities is an evidentiary matter that may be proven during trial.
The complaint, however, did not even have to show or allege that Glasgow had been
implicated in a conviction for, or the commission of, the unlawful activities of estafa and
violation of the Securities Regulation Code.

A criminal conviction for an unlawful activity is not a prerequisite for the institution of a civil
forfeiture proceeding. Stated otherwise, a finding of guilt for an unlawful activity is not an
essential element of civil forfeiture.

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Civil Forfeiture in relation to AMLA

Since the account of Glasgow in CSBI was (1) covered by several suspicious transaction
reports and (2) placed under the control of the trial court upon the issuance of the writ of
preliminary injunction, the conditions provided in Section 12(a) of RA 9160, as amended,
were satisfied. A criminal conviction for an unlawful activity is not a prerequisite for the
institution of a civil forfeiture proceeding. A finding of guilt for an unlawful activity is not an
essential element of civil forfeiture. (Republic of the Philippines vs. Glasgow Credit and
Collection Services, Inc., G.R. No. 170281, January 18, 2008) Corona, J.

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