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    Banking Laws by Atty. Efren Dizon (2008)

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    Chap 11_Dizon Banking

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    Banking Laws by Atty. Efren Dizon (2008)

    Copyright:

    © All Rights Reserved
    Download as PDF or read online from Scribd
    Flag for inappropriate content
    54 views18 pages

    Chap 11 - Dizon Banking

    Uploaded by

    Jasmin Denisse Dela Cruz
    Banking Laws by Atty. Efren Dizon (2008)

    Copyright:

    © All Rights Reserved
    Download as PDF or read online from Scribd
    Flag for inappropriate content
    of 18
    Chapter 11 Anti-Money Laundering: I. Concepts Brief Overview Of the AMLA’ laundering has been generally defined by the | Criminal Police Organization (Interpol) as “any actor al he identity of illegally obtained na ve originated from legitimate ven before the passage of the AMLA, the problem was © Philippine government through the issuance of lars by the Bangko Sentral ng Pilipinas. Yet ultimately, roscription was necessary, especially with the inclusion ‘pines in the Financial Action Task Forces list of non- ‘untries and territories in the fight against money The original AMLA, Republic Act (R.A.) No. 9160, was 001. It was amended by R.A. 9194 in 2003. the AMLA states that “Imloney laundering is y the proceeds of an unlawful activity as (defined nn the law) are transacted, thereby making them sppear to have wna ‘Other Purpenes AML) Sco Repu ve Engen, GR, No, 174628 February 1, 2008 °Sin Funds dered from erninalacioies (POPAC), hi \eu/PablcPinmocal CrimalManey Laundering) Sex slo JMB MONEY LAUNDERING LAW OF THE PHILIPPINES Annotated “Tino, supra ote 64, t 48, The Financia Actin Tak ihe in 1989 bythe socalled Gop oT counteies tft and ‘option of international andarde nd moaeures t ght teed acti I 228 B. cegration — At the intagration stage, the m ora the "ea final bank transfer into the account of a ness in which the launderer is “investing” iq ange for acut of the profits, the sale ofa yacht bought i the layering stage or the purchase of $10 million er from a company owned by the launderer. At . criminal can use the money without geting y difficult to catch a launderer during the tage if there is no documentation during the nti-Money Laundering Act has the following policies and preserve the integrity and confidentiality of ‘ensure that the Philippines shall not be ssed as a laundering site for the proceeds of any unlawfl activity, and ii) consistent with its foreign policy, extend cooperation transnational inv P involved in money laundering activities wherever: Covered Institutions ‘The following institutions are covered by ABLA: (2) banks, non-banks, quasi-banks, trust entities, other institutions and their subsidiaries and. pervised or regulated by the Bango Sentral (BSP, ® or regulated by the Insurance (9) securities dealers, brokers, and other similar entities: cctiviey or offense that is about to be, is being OF has 1°" E” Unlawful Activities below); onetary Instrument se AMLA, the following are considered as Monetary coins or currency of legal tender of the Philippines; oF of necks and notes; ities or negotiable instruments, bonds, commersal whore, deposit certificates, trust certificates, custodial Pause of deposit substitute instruments trading F ions cransaetion tickets and confirmations of sale oF n= Siments and money market instruments and her similar instruments where title thereto pastes ta) by endorsement, assignment er delivery. Unlawful Activities ‘overs the fllowing unlawful activities: jing for ransom indor Article 267 of the Penal Code, as amended; Sections 4, 5, 6, 8, 9, 10, 12 13, 1, 15; and 16 6 Comprehensive Dangerous Drugs Act of 2002 3) Section 3 paragraphs B, C,,G, Hand tof the: and Corrupt Practices Act, as amended (4). Plunder under Republic Act No, 7080, a8 (6) Robbery and extortion under 299, 300, 301 and 802 of the amended; any ee BARA 910 facilitates th offs 1 paragraph (a) above wing that any monetary instrument or required to be disclosed and filed with the ney Laundering Couneit (MLC), fails to do 80 IL, Jurisdiction And Prosecution jurisdiction of Money Laundering Cases | Trial Courts shall have jurisdiction to try all adering. Those committed by publie officers and. ‘are in conspiracy with such public officers shall andiganbayan. B, Prosecution of Money Laundering. 1 be stressed that: may be charged with and convicted ofboth the ey laundering and the unlawfl activity Any proceeding relating to the unlawful activity shall fen precedence over the prosecution of any offense n without prejudice to the freezing and other remedies, + Note: See XII — Prosecution of Money Laundering Rule below, IIL Anti-Money Laundering Council (AMLO) A. Composition ‘The AMLC shall be composed of — () Governor of the Bangko Sentral ng rney or instrumentality ofthe government, Including govermment-owned and -controlled corpora tons, im undertaking any and all anti-money laundering erations, which may include the use ofits personnel, ‘ston and resources for the more resolute prevention, ‘nd investigation of money laundering offenses ton of offenders, ministrative sanctions for the violation of -eyulations and orders and resolutions issued pursuant thereto cstablish secretariat to be headed by an Executive Director who shall be appointed by the Counel fora term {five (5) years. He must be a member ofthe Philippine ‘Bar, at least thicty:fve (35) years of age and of good moral character, unquestionable integrity and known probity members of the Secretariat must have served for st Tea years either in the Insurance Commision, the Securities and Exchange Commission oF the Bangko ‘Sentral ng Pilipinas (BSP) and shall hold full-time per manent positon within the BSP. IV. Prevention Of Money Laundering; Customer Identification Requirements And Record Keeping A. Customer Identification For purposes of eustomer identification, the following rules prescribed as a way of preventing money laundering! (Covered institutions shall establish and record the ‘identity of its clients based on official documents, (ii) ‘They shall maintain a system of verifying the truei of their clients and, in ease of corporate cients, system of verifying their legal existenceand structure, aswell asthe authority and persons purporting to act on their behalf. that « covered oF report was made, the contents thereof ther information in relation thereto, + of violation thereof, the concerned officer and we of the covered institution shall be eriminally However, no administrative, eriminal oF iv nail lie against any person for haying made ed or suspicious transaction report in the regular ance of his duties in good faith, whether oF nob porting results in any eriminal prosecution, ng covered or suspicious transactions to wvered institutions and their officers and prohibited from communicating directly or "any manner or by any means, to any person the media, the fact that a covered or suspicions action report was made, the contents thereof, oF ner information in relation thereto. Neither may reporting be published or aired in any manner or he mass media, electronic mail, or other similar es. In case of violation thereof, the concerned officer and employee ofthe covered institution and media shall held criminally liable." D. Freezing of Monetary Instrument or Property This is also one way to prevent money Iaunderings? 1¢ Court of Appeals, i) upon application ex parte by d AML; and (i) after determination that probable eause exists ny monetary instrument or property is in any. way related: unlawful activity, may issue a freeze order which shall be: immediately. The freeze order shall befor a period of twenty 20) extended by the court." E. Authority to Inquire into Bank Deposits ‘To complete the legal measures to prevent the AMLC may inguire into or examine any TA amend by Se. 6, RA. 9194. sas amended by Sec. 7, RA. 9194. ithe account holder for lotation ofthe AMA, Should ‘hat be the sitation, inal Ukelthood the AMILC would be ‘intually deprived oft character ana discovery tk and ‘hus ould become les elreumapect tn filing complaints agains! suspect account holders. After alls und auch tup the preferred strategy would be to allow or etn. Encourage the indiscriminate Ailing of complaints under ‘he AMLA with the hope or expectation that the euldenee oney laundering would somehow surface during the Since the AMEC could not make use of the bank iry onder to determine whether there i eeidentiany ani fo prosecute the suspected malefuctors nat filing any ‘ive af all would not bean alternative, Such unholesome set-up should not come to pass, Thus Section 11 cannot be Interpreted ina way that would emaseulate the remedy i ho established and encourage the unfounded initiation of complaints for money laundering. Stilt, even ifthe bank ing of without need of a preexisting case under the AMI, 1 doce not follows that such order may be availed of et parte There ere aeveral reasons tchy the AMA doer not {fenerally sanction ex parte applications and enuancer of ‘asa general rule, the issuance ex parte of bank inguir onder. We quote the procision in full: ‘onder of any competent court in eases of ‘his het, chem dt haw been nam provisional reliefs which the AMLC may avail of to Crrectively combat and prosecute money laundering of fos Crucally, Section 10 uses specifi language 0 au ‘an ex parte application for the provisional rel "ya! cireumatance absent in Section 11. If indeed the had intended 0 authorize ex parte proceed. 1¢ exuance of the bank inquiry order, them tt se easily expreaued such intent in the las, as it 1h the freeze order under Section 10. ven more tellingly the current language of Sections and 11 of the AMLA was crafted at the same time, sh the passage of R.A. 9194. Prior to the amendatory twas the AMLC, not the Court of Appeals, which ud authority to issue @ freeze order, whereas @ Bank rier alicays then required, without exceptot/ai ma competent court.” It teas through the same that ex parte proceedings were introduced for “i time into the AMLA, in the case ofthe freeze order hich now can only be issued by the Court of Appeals Ie Certainly would have been gonenient, through the same Gmendatory law, t0 allow @ similar ex parte procedure inthe case of bank inquiry order had Congress been 90 ininded. Yet nothing in the provision itself. or even the Ghailable legislative record, explicitly points to an ex: porte judicial procedure in the application for a. Inquiry order, unlike in the case of the freeze order. That the AMLA does not contemplate e= part ceedings in upplications for bank inawiry orders firmed by the present implementing rules and regula bf the AMLA, promulgated upon the passate: With respect to freeze ordera under Section 1 menting rates do expresaly provide thatthe for frees orders Be fled ex parte; bat mo “Talks the present aw which, ‘cal order wen there x problcase ha aa sted to untaual etsen an defined i Sceion 310 of the AMLA. The otner of such manetayy Instruments or property tould thus be inhibited fre Utilizing the wame for the duration ofthe reese order To ‘order anteceded by audicial ‘Sith noice fo the account holder would allow for or lag the dissipation of such funds even before the ortee fanued. (On the other hand, @ Bank inquiry order under See. tion 11 does not ne any form of physleal seleure property of the account holder. What the bank inguy ler authorizes i the examination of the partleulee de posts or incestmenta in banking Insitutions or nonsbanh Inctitutlons. The monetary instramente | ited with such banks or financial inetiations sed in a physical rense, but are examined on detail auch as the account holder record of ‘and transactions. Unlike the anes subject ofthe rer, the recorde tobe inapected under @ bank in- ‘uiry order cannot be physically vized or hidden by the forabank inquiry order be dane with notice f0 the holder will alert the latter that there lea plan f0 i Involved in an wntawful activity or money. offense Still, the account holder so alerted be unable to do anything to conceal or cleanse ‘eccount records of nuspieious or anomalous ft least not without the whole hearted brant ehich inherently has no vested ‘sccount holder in auch manner. ‘Phe Constitution and the Rules of Court preveribe portion vaquiremente attaching to search carranis cease imposed by the AMEA sith respect fo ban oe eta coneditutional warrant requires that ae personelly examine under oath or afirmation we dinant and the telinenes he may Produce ich agin the form of searching questions and. ‘Those are impostions which the legitative “Sy specfcatly prescribe a to the Bank inquiry order (SOTA, ond ee cannot find wuffilent legal asia 2 oan to Section Hof the AMLA, Simply Pa series order le nota search warrant or warrant SP .e Contemplates a direct object but not the persons oF propert Toon ax the Constitution and the Rules of Court impous high procedural standard forthe determination ree ssahie cause for the truance of vearch warrants Pp Comgreaschowe not fo prescribe forthe bank inary “Tsallowed sr under the AMEA, Congress nonetheea ce ieee ations forthe inquiry order. Weean dlacerm ee eehange for then procedural standards Penalty of imprisonment ranging fom to fourteen (14) years and a fine of ‘Three million Philippine pesos ‘but not more than twice the wale instrument or property involved 6) Any peraon knowing that any property involves the p ‘performs or fils to a ny public official or employee who is called upon testify and refuses to do the same or purposely fails teatily shal suffer the same penalties prescribed. D. Breach of Confidentiality nh of confidentiality under the AMLA the penalty is mthroo(3)tocight(8) yearsand.afineofnot ‘red thousand Philippine pesos (Php00,000,00) re than One million Philippine pesos (Php1,000,000.00). In the ease ofa breach of confidentiality that is published cr reported by media, the responsible reporter, writer, president, publisher, manager end editor-in-chief shall be IX. Prohibitions Against Political Harassment The following prohibitions against politcal harassment sr= ided in the AMLA: Tis Anti-Money Laundering Act shall not be used political persecution or harassment or as an instrument ‘hamper competition in trade and commerce i) No case for money laundering may be filed against to assets shall be frozen, attached oF forfeited | prejudice ofa candidate for an electoral office election period. X Implementing Rules and Regulations — ‘The AMLA shall have implementing rules and follows: ) ‘The Bangko Sentral ng Pilipinas, the sion and the Securities and Exchange promulgate the rules and. Lively the provisions of this Act Non-Bank Finanlal Inatieutions ‘ble menvures to establish and record "their cents, Said elientidentifiation tificial or other reliable documents and f conporate and other

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