Hello everyone, welcome to our 2nd to the
last discussion in banking law. This time
we will be focusing our attention on the
Anti-Money Laundering Act.
ANTI-MONEY LAUNDERING ACT
RA 9160 as amended (2001)
This law was enacted in 2001, but even up
to this year, amendments were made.
RA 9160: Has been amended
9194 (2003)
10167 (2012)
10365 (2013)
10927 (2016)
11521 (2021)
Since 2001, there has been 5 amendments
made to the law. I will show you later on
through a word cloud how this has been
amended. This is just to show you that
during these points in time, the
amendments in 2012 and 2013 were
primordially because of the decisions of
the Supreme Court. In 2021, it has
something to do with what is now
considered to be terrorism and the acts
related to it.
The law that we will be discussing on,
therefore, is RA 9160, as amended. Taking
into consideration all the amendments
that have been made from 2003 to 2021.
Purpose of the Law
Preserve the integrity and confidentiality
of bank accounts and to ensure that the
Philippines shall not be used as money
laundering site for the proceedings of any
unlawful activity.
What is the purpose of the law?
I always include, as much as possible, a
discussion on the purpose of the law
because I believe that you retain memory
of what it is and then apply it accordingly
if you know the reason for it.
The reason of AMLA is to preserve the
integrity and confidentiality of bank
accounts and still ensuring that the
Philippines will not be used as money
laundering site for the proceedings of any
unlawful activity.
We are already a third world country. We
are one of the countries which has a high
corruption rate, but the goal is not to
make the Philippines the means of
laundering money.
Money Laundering
Act of transferring the monetary
proceeds derived from illicit activities into
funds with an apparently legal source.
What is money laundering? I think most of
you have an idea about this, but the
money laundering contemplated under
the law is the act of transferring the
monetary proceeds derived from illicit
activities into funds with an apparently
legal source.
Why is it considered laundering? You can
always think of it as cleaning the money
the same with the way you clean your
clothing. It’s removing the hint of
illegitimacy or illicitness or any money, and
then converting it to something that
appears to be clean.
Three Phases of Money Laundering
 1. Placement: stashing of funds into a
financial institution
This can be, under the covered persons
under the Anti-Money Laundering Act, by
banks (That’s why it’s included in Banking
Law), by casinos, offshore gambling sites,
pogos, real estate transactions, or jewelry
dealers.
All of these are a legitimate financial
From 2001 – 2003, there is one
institution. You inject money into it, but
amendment which is RA 9194. Here are
the funds that are being injected are
the following changes.
coming from illicit source, certain unlawful
activities like piracy, violation of the First, there was an increase in the covered
Intellectual Property Code, drugs, transaction. From 400,000 to 500,000.
kidnapping, or terrorism You don’t have to take not of it. Just pay
attention.
2. Layering: money is moved from
one institution to another Then, there was an inclusion of a provision
for a suspicious transaction, which you’ll
Parang laundry talaga sya. It moves from
see later on is not part of covered
one place to another so that the detection
transaction, but it is still nonetheless
of the illicitness will be avoided. From
considered as suspicious.
banks, it’s invested in real estate. From
real estate, it’s invested in other financial There was also an amendment for the
institutions. freezing of the assets. As well as it should
be by order of the Court of Appeals. It
3. And the last is the Integration: the
used to be by order of AMLAC. It’s by an
taking of funds from various banks
ex-parte application, probable cause, for
or covered institution and then
20 days, & for an unlawful activity.
investing in a legitimate business.
There was also an amendment into the
inquiry into the deposits where it specified
AMENDMENT certain inquiry that need not have the
approval of the court.
Let us now discuss the amendments to the
law.
From 9194 to 10167, those in green are
now considered the amendments to the
AMLA.
For the purpose of determining to freeze a
certain account for unlawful activity, it’s
now that there is a mandate for the
immediate issuance and that the Court of
Appeals should act within 24 hours.
That it cannot be a subject of a TRO
except coming from the SC. There was an
inclusion of the freezing of certain
deposits pertaining to related accounts.
So it is not always the case that the
account of the wrongdoer will be the one
that has the laundered money.
Sometimes, it’s going to be passed on to
someone else, like the accounts of their
children. And the reality of our world, this
is where we became more aware of
terrorism and how it also involves money
laundering.
The next amendment, so that was 2012.
The next one is 2013. This is by virtue of RA
10368 and this time it included the
jewellery, persons (?) for covered persons.
Yung mga jewellery dealers, company
service providers, persons who provide
service but this time it is including lawyers.
The freezing of accounts was extended to
six months and there was an addition to
what is considered as money laundering
offense. This is still considered the same to
our present law.
There was also inclusion of a lot of
unlawful activities such as terrorism,
financing of certain (okay) .. bribery, fraud,
illegal exactions, malversation, forgeries,
trafficking, forestry, fishing mining
violations, wildlife violation, car napping,
firearm fencing, Migrant Workers Act,
Intellectual Property Law, voyeurism, child
pornography, Anti-child and Women
Abuse Act (7610). Parang everything na is
included under RA 10368.
Again, same, 6 months. There was more
coverage on civil forfeiture.
The next one is RA 10927. This is around
2016, there was now an inclusion of
covered transactions to include casinos.
For casinos, the transaction was now
included 5 Million, because it used to be,
for covered transaction it’s only 500
thousand. But for casinos, for a single
night, we’ll have 5 million (we will be
discussing that later).
There was also an amendment that the
freeze order will be lifted ipso facto if no
case was filed against the account holder.
So if no case was filed within 6 months, it
will be lifted ipso facto.
20 days to conduct summary hearing to
determine if the order to freeze should be
extended. And then there was now
inclusion of recognition of the functions of
the RTC with respect to asset
preservation.
So yung amendment under RA 10927 is a
bit short but earlier at the beginning of
this year, those that are in light blue are
the amendments, it already identified
gaming operators for gaming operators as
included in covered transactions and
covered persons. There was a widening of
what was considered unlawful activities.
So, it’s now including proliferation of
weapons of mass destruction and
violation of the National internal Revenue
Code. Any violation in excess of deficiency
or a deficiency in excess of 25 million is
now considered as part of unlawful
activities.
There was now inclusion of real estate
transactions and implementation of
financial sanctions which are not included
in the prohibition for freezing of deposits
to be by order of competent court.
This is just a short summary of the changes
that have been made because of change of
culture, change of things that they are
trying to eradicate of AMLA. I don’t know.
It’s just my distrust of the government.
MONEY LAUNDERING OFFENSE
(SEC. 4)
If you needed to repeat the video over and
over again to go over that quick view of the
amendments to the law, it’s not necessary.
I just want you to see the different changes
that have been made. But the law that we
will be discussing now is in its entirety. No
more piecemeal amendments. I hope that
this is the last amendment that they will
make of the Anti-Money Laundering Act.
Let’s begin.
The first must be a discussion under Sec. 4
of what is considered as a money
laundering offense. There are a handful of
money laundering offense.
Money Laundering Offense (Sec. 4)
a. Transacts monetary instrument or
property in an unlawful activity;
- There is a transaction of monetary
instrument or property in an
unlawful activity
- Examples of unlawful activity
which is found under the definition
of law are kidnapping, plunder,
jueteng, smuggling, and financing
of terrorism
b. Converts, transfers, disposes of,
moves, acquires, possesses or uses
said monetary instrument or
property;
- Another money laundering offense
(it can be just one of these) is to
convert, transfer, dispose of,
move, acquire, possess or use said
monetary instrument or property
that has been used in an unlawful
activity
Take note: Anyone that is benefitting
from the money arising from an
unlawful activity, that can be
considered also as money laundering
offense.
Example: I kidnap someone in order
to gain money. The ransom from it, I
deposit in a bank. Someone that
benefits from the money, let’s say
that it’s my sister who makes use of
the money and then purchases a
house – that is also considered as a
money laundering offense.
Why? Why does it not end with me?
- Because there is a movement of
the money that legitimizes its use
from an unlawful act of
kidnapping for ransom and then
purchasing a property to legitimize
it.
c. Conceals or disguises the true nature,
source, location, disposition,
movement or ownership of right
rights with respect to said monetary
instrument or property;
- The next one is concealing,
disguising the true nature, source,
location, disposition, movement or
ownership of right rights with
respect to said monetary
instrument or property
- Making it appear, for example, ako
na naman. This time, I’m going to
pretend that this money that I
received from someone else did
not come from an unlawful
activity, rather that it was given to
me, bequeath to me, donated to
me when in fact, that is not how
the money was obtained, or that it
is a result of an unlawful activity.
 - So making it appear, for example,
that I received it as a salary for my
employment when in fact, it’s not
like that, that’s not how I received
it, but only to color it, to conceal
that there was a wrongdoing on
how it was obtained.
d. Attempts of conspires to commit
money laundering offenses referred
to in paragraphs (a), (b) or (c);
- So even by the mere act of just
attempting even though it was
unsuccessful, this will already be
considered as a money laundering
offense.
e. Aids, abets, assists in or counsels the
commission of the money laundering
offenses referred to in paragraphs
(a), (b) or (c) above; and
- Sinabi ng isang broker, this is how
you do it, you get the money from
that one, and then let’s invest it in
a stock exchange.
- Someone just tells another person,
a lawyer, a financier, a broker of
any kind – that is also considered
as a money laundering offense.
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
- How is this being done? Well,
there are covered persons under
the law that are required to make
a report to the AMLC (it is
pronounced as “amlac”) of any
suspicious activity that is part of a
covered transaction.
- If there is failure to report that,
that can be considered as a money
laundering offense.
Example: Banks are required to
report any transaction that is in
excess of Php. 500,000.00 within
one day or any suspicious activity.
Kunwari, wala naman siyang
narereceive talaga na pera of that
amount on any given day. Ang
nareceive niya lang Php. 200.00 or
sometimes there is even none. But
suddenly to receive Php.
400,000.00 in one day without any
reason for it – that is a suspicious
activity that should be reported by
the bank to the AMLC, but refuses
or fails to do so, tingnan niyo, it is
an act or even a negligence or
omission shall be the basis for
what is considered as a money
laundering offense.
Money Laundering
- Commited by any covered person
who, knowing that a covered or
suspicious transaction is required
under AMLA to be reported to the
AMLC fails to do so
Prevention of Money Laundering
1. Customer Identification
- Recording of the true identity of
the clients based on official
documents (e.g. asking source of
income, KYC)
2. Record Keeping
 - Records of transactions of covered
persons shall be maintained for 5
years from the date of transaction
3. Reporting
- Covered persons shall report to the
AMLC all covered transactions
within 5 days from occurrence
- If covered transaction and
suspicious, report as suspicious
transaction
*This reporting is an exception to the
Bank Secrecy Law, Foreign Currency
Deposit Act, and General Banking Law.
Covered persons are however, prohibited
from disclosing to the media that there
are certain reports of violations of the
money laundering act
There is a provision by virtue of R.A. 10368
that:
- Lawyers and accountants are not
required to report if these
information obtained are subject to
professional secrecy or legal
professional privilege
Sec.5: Jurisdiction for Money Laundering
- Regional Trial Court or
Sandiganbayan depending on the
existence of a public office
Under RA 10368 included na those in
(maroon background)
Company Service Providers are formation
agent of juridical person acting as
Director, providing registered office,
business addresses, or accommodation or
sometimes they act as nominee
shareholder for another
Persons who provide services means the
management of client’s money, securities,
or other assets, such as the management
of bank
Precious Stones: e.g. diamond, ruby
Precious Metals: e.g. gold, silver, or
platinum
The last amendment under 10927 includes
Casinos inluding internet and ship-based
(green background)
The latest one, RA 11521, it included (pink
background)
Apparently, because of this law, Money
laundaurers are now moving into real
estate because that’s the means of
legitimizing their illicit money, by
purchasing properties
COVERED TRANSACTIONS:
 - Transaction in cash or equivalent
monetary instrument. So those
covered institutions that we have
discussed must report it to the
AMLC
When to report:
Developer is someone (natural or juridical
person) that is engaged in the business of
developing real estate projects, such as:
putting up a condominium or a subdivision
either for sale or lease
Broker is a duly registered natural person,
who would now for a fee, would act as an
agent of a party in a real estate
transaction, such as: offering it for sale,
advertising about the property, or
negotiating for the purchase of the
property.
*They are not prohibited from
selling/buying properties, the requirement
is that it must be reported
SUSPICIOUS TRANSACTION
- Transactions with covered persons
regardless of the amount involved,
if any of these exists:
a. There is no underlying legal or
trade oblidation, 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 clients
Suspicious Transactions:
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 clients;
If this is a sari-sari store, there's no
reason for a sari-sari store to be
receiving P500,000. Sari-sari store nga
siya eh. It's not a grocery. It seems that
the person who's receiving this money
is merely acting like a dummy - someone
that is being used for the purpose of
laundering money. That's why it's
considered as suspicious.
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;
How is this done? Well, for today, the
deposit is 250k. Tomorrow is 250k. The
day after that it's another 250,000. The
Last Day is 250,000. So yes, there seems
to be a deposit within or less than the
amount that is covered or considered as
cover transaction, but the way that it's
being split up in order to purposely
avoid detection, avoid the cover
transaction requirement, then it is
considered as a suspicious transaction.
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;
If a person is engaged in the withdrawal
or deposit of amounts siguro parang
30,000 every month, because that's the
salary. Then suddenly, without any legal
justification at that, would now be
depositing 500,000. So that becomes a
suspicious activity because if there's a
trend, anything outside of it would be
considered as suspicious.
6. The transaction is in any way related to
an unlawful activity or offense that is
about to be, is being or has been
committed; or
This is another grammar language and
it's something an unlawful activity that
has not yet been committed, that will
be committed, or that might be or is
being committed at the very moment.
7. Any transaction that is similar or
analogous to any of the foregoing.
Unlawful activity [3(i)(1) to (33)
What are these unlawful activities?
Well, it's too long for me to discuss, but
because there's already 33 unlawful
activities that are identified in the last
amendment of the law, so you just take a
look at them. You're really not required to
memorize but take a look, familiarize
yourself with these activities that is
considered unlawful activity under the
AMLA.
What's the purpose of knowing this
unlawful activity?
Well, anything that is related to it will be
the basis for a suspicious transaction, even
though it's not rising to the level of the
cover transaction. It's not 5 million for
casinos, 500,000 as a general rule, or 7.5
for a real estate transaction, but if it
appears that it's from an unlawful activity,
then it is going to be a suspicious
transaction and must be reported. The
identification of the unlawful activities
under the law is also the basis for
determining whether certain deposits
must be subject to a freeze order of court
of appeals. If it can be subject of a freeze
order by the Court of Appeals.
Two (2) reasons why you need to be
familiar with unlawful activity:
1. It might be a suspicious transaction.
2. For the purpose of freezing the
deposits
Remedies of AMLC
- To eradicate money laundering in
the country
1. Section 10: Freezing
2. Section 11: Authority to Inquire
3. Section 12: Forfeiture
4. Section 12: Targeted Financial
Sanctions
They have in essence four - freezing, the
authority to inquire, forfeiture, and
targeted financial sanctions which are
under the freezing. The last one is quite
new. This is by virtue of 11521 the last
amendment this year. Freezing and
authority to inquire has always been
subject of amendments.
Freezing of money, property and
proceeds under Section 10
Two Kinds of Freeze Order
1) Unlawful Activity under Section 3(i)
2) Freeze Order for purpose of
implementing targeted financial
transactions
- New one
I am categorizing them into two because
the way that you go about it will be
different from one another. This is also
considered as:
Asset Preservation Order
- The freezing pertains not only to
deposits or Monetary instrument,
but may even include property, or
proceeds if it has been used for
unlawful activity
Monetary Instrument, under the IRR of
AMLA:
1) Coins or currency of legal tender of the
Philippines or of any other country;
2) Credit instruments, including bank
deposits, financial interest, royalties,
commissions and other intangible
personal property;
3) Drafts, checks and notes;
4) Stocks or shares, or an interest/equity
therein, of any corporation or
company;
5) An interest in any corporation,
partnership, joint venture or any other
similar association or organization for
profit or otherwise;
Any of the above monetary instruments
may be frozen. Example, I am a holder of
shares of stocks in Petron. But because
there is a freeze order, I cannot withdraw
any dividends that might be declared.
Property
1) Cash;
2) Jewelry, precious metals, and other
similar items;
3) Works of art such as paintings,
sculptures, antiques, treasures and
other similar precious objects;
4) Perishable goods; and
5) Vehicles, vessels or aircrafts, or any
other similar conveyance
6) Real estate
- Pertains to any improvements
constructed or even the crops
growing on the property
What can be subject further of any freeze
order?
Proceeds
- Refers to an amount derived or
realized from an unlawful activity
a) Realized
- This may pertain to any amount
that was realized, something
that was gained. For kidnapping
for example, the ransom, if it
was deposited in a certain
account, that can be frozen.
b) Used or having relation
- any monetary, even devises or
documents, that were used in
an unlawful activity. Example,
any threat.
c) For the financing, operations and
maintenance
 - If from a certain bank account,
a money was withdrawn in
order to rent an Airbnb for the
holding of this kidnapped
victim, then that account from
where the bad guys made a
withdrawal to rent to property
is considered as proceeds.
So it is not just the amount that was
gained or obtained from the unlawful
activity. Anything that would also be used
to make the unlawful activity happen is
also considered as proceeds.
How will a freeze order be issued?
Freeze order will be Issued upon
- Via ex parte petition with Court of
Appeals
o It is ex parte and not a full-
blown trial because it will be
absurd. If they knew that
their assets will be frozen,
there is a tendency that it
will be taken out of the
jurisdiction of the court
- Determination of probable cause
that is related to an unlawful
activity
o Probable cause is defined as
a reasonable, discreet,
prudent or cautious man
believed that an unlawful
activity or money-
laundering offense is about
to be, is being, or has been
committed, and the account
or any monetary instrument
or property subject thereof
sought to be frozen is in any
way related to said unlawful
activity
o In order to establish that
there is probable cause,
there must be one existing
identified unlawful activity
that could happen even in
the future, and that the
account to be frozen or the
property is related to it. So
there are two requirements
that must be shown: (a) the
unlawful activity, as well as
(b) the relatedness of the
account, property or
proceeds
- Acted upon within 24 hours from
filing of petition
o Incumbent upon the Court
of Appeals
o It is not really stated that it
must be approved, rather it
must be acted upon. So it
must be heard.
Some Characters of the Order to Freeze
- Pre-emptive in character and
preservatory
So, it is useless for it to happen after
- It is not dependent on a separate
criminal charge nor a conviction
But this is for purpose of filing. At the
time of the filing of the petition ex
parte application for the freezing of
the property, there is no requirement
that there should be a conviction
already or an information has been
filed for that unlawful activity. So,
there’s no necessity that there should
 already be a kidnapping information
filed in court as long as there’s an
identification that there is an unlawful
activity, that there is kidnapping that is
about to happen. So, there’s no
necessity that there is an information
or conviction.
Take note that this pertains only at the
time of the filing of the petition
because it’s another case later on.
- A freeze order may proceed
independently of preservation of
assets in the RTC having jurisdiction
over the case (either of the unlawful
activity or the money laundering case).
It’s possible that a freeze order may be
issued by the Court of Appeals by ex
parte application of the AMLAC or the
RTC would issue it because it’s a
necessity in the preliminary
attachment for the criminal offense of
money laundering as well as the
unlawful activity. It’s possible that they
can co-exist.
When is it necessary to freeze an account?
- Are they in any way related to the
unlawful activities
Only if there is showing that it is
related to the unlawful activity.
- Cannot cover excess
Anything that is outside of the
unlawful activity cannot be subject
of the freeze order.
What does this mean? This is a
requirement under the law. For
example, the proceeds from the
unlawful activity is Php 5 million
but the savings account has an
amount of Php 12 million. So, that
means that the excess of the Php 5
million which is related to the
unlawful activity cannot be frozen.
So pwede ka magwithdraw, but
not more than the Php 5 million.
Php 7 million can be withdrawn.
The Freeze Order issued by the CA will be
- Effective for 20 days.
- Limit of up to 6 months
However, it can be extended up to
6 months. It cannot be more than 6
months, it can be less than 6
months but it may be extended
from 20 days to 6 montsh.
What happens within the first 20 days is
that the
CA conducts summary hearing to
determine whether to lift or modify freeze
order or to extend its effectivity no more
than 6 months.
So, this is the purpose of the 20
days: to make a determination whether to
lift, modify or freeze it.
6 months
That freezing of the assets, property and
proceeds from the unlawful activity shall
be
- ipso facto lifted after the 6 months
- if no case is filed against the person
whose account has been frozen
within the period of 6 months.
It will be lifted without any need of order
from the court ipso facto, automatically, if
no case was filed against the person
whose account was frozen.

Q: Can it be more than 6 months?

A: I think, and this is my opinion on the
matter, it’s no longer by virtue of the
freeze order under Section 10 of the
AMLA, rather it should be in relation to the
money laundering offense that was filed
or the charge of the unlawful activity. So,
kunyari, a violation of the patent law if it’s
for infringement. Remember, even the
Intellectual Property Code is considered as
a basis for the finding of an unlawful
activity and any infringing act there.

What’s the remedy of the defendant

whose property, account, money,
instrument was frozen?

- Motion to Lift Freeze Order in CA

- TRO from SC
This is against the CA for the
issuance of a freeze order or
against the AMLAC for
implementing the freeze order.

It cannot be from another CA

because it needs to be a higher
court. No TRO will be issued by any
court except the SC.
Welcome back! This is the 2nd recording for the
ANTI-MONEY LAUNDERING ACT
RA 9160 as amended (2001)
In the previous video, we discussed the basics of
the AMLA and ending it with the issuance of a
freeze order into the deposits, property any
asset of a person who is found to have
committed, will be committing, or is going to
commit an unlawful activity defined under
AMLA.
Take Note, in our previous discussion, we said
that there are two kinds of order to freeze.
We’ve only discussed the first one, in this next
video we’ll discuss the others, but first we have
to tackle the inquiry into the deposits.
How about the Authority to Inquire into
Deposits (Sec. 11), which is the remedy of the
AMLAC under Sec. 11?
ACCOUNTS
 Deposit
 Investment
The purpose of the inquiry into the accounts is
to make a determination whether it’s a proceed
of an unlawful activity or if this is an account
that was used in a money laundering events.
When the law says accounts, it not only
contemplates a deposit which you learned from
the General Banking Law, but even investments
that are in covered transactions.
Investment accounts pertain to the ability given
to an entity to buy and sell a variety on
investments, such as stocks, bonds, mutual
funds, and others.
Examination of Related Accounts
 Accounts which are materially linked to
the monetary instrument
 Web accounts
The examination is just limited to the accounts
of individuals that appear as the beneficial
owner of deposits that have been used for
money laundering.
An examination can also be made on related
accounts which is defined as accounts which are
materially linked to the monetary instruments.
They are sometimes referred to as the web
accounts kasi it’s a reality that it’s not just going
to be limited to the beneficial owners account.
Let’s say plunder. It’s not just for the name of a
politician or a public servant that will be
investigation because it’s most likely that any
money that has been obtained in contravention
of the AMLA will not be deposited in his
account where he appears to be the account
holder. It’s most likely going to be deposited in
someone else’s: the wife, the children, the
mistress, the girlfriend, who might not be the
same individuals.
The Authority to inquire into deposits
Is further classified into two. I made this
classification that it can be done with:
 With competent order of the court
 Without need of court order
Authority to Inquire into Bank Deposits (Sec.
11)
1. The first one, the Authority to Inquire
into Bank Deposits (Sec. 11) By an
Order of Competent Court upon Ex
parte Application and after establishing
probable cause that an offense under
AMLA has been committed.
It’s not just related to unlawful activity, but
even any offense. If it’s in violation of the
breach, as long as it is an offense under the
AMLA, then there is authority to inquire into
bank deposits.
The court that will act on this should be the
Court of Appeals:
 Should act on the application to inquire  So, it’s the same here, no TRO may be
within 24 hours from application. issued by any court except by the SC for the
prevention of the implementation of a civil
When the law says court of competent
forfeiture.
jurisdiction or order of court, it’s the Court of
 So here is the stages for the remedy of civil
Appeals and it should be acted on within 24
forfeiture:
hours from application. Same as the freezing
order.

 And this should be acted on from 24 hours

from application, so same as the freezing
order --

(2) No Court order shall be required in 3(i)(1),

(2) and 12, and felonies similar to them +
conspiracy to commit terrorism.

 There is no need for a court order if what is

subjet of the investigation is an unlawful
activitiy which has been defined under
Section 3(i)(1), (2) and 12 and other felonies
similar to them including conspiracy to
commit terrorism.
What are these unlawful activities that have
been identified? So any of these … any unlawful
activity that falls under this enumeration, there
is no need for a competent court to issue an
authority for the AMLC to inquire into the
deposits. they can do this without even any
court order:
kidnapping for ransom, hijacking and violation
of RA 6235, destructive arson and murder,
terrorism and conspiracy to commit terrorism,
importation, sale, administration, delivery,
distribution and transportation of prohibited
drugs, maintaining drug den, manufacture of
drugs, possession of drugs and cultivation of
plants which are sources of prohibited drugs.
The next remedy available to the AMLC is civil
forfeiture under section 12.
CIVIL FORFEITURE (SEC. 12)
First one is that the AMLC determines probable
cause if these properties pertains to an unlawful
activity or any money laundering offense.
(Take note: unlawful activity and any money
laundering offense)
And then, the AMLC will file through the OSG
petition for civil forfeiture with the RTC.
If an order and if there is an order of forfeiture
which is issued by the RTC, the sheriff is
required to enforce the same, and if convicted,
if the person liable for the unlawful activity or
money laundering offense is convicted, then
they will be required to pay an amount equal to
the value of the monetary instrument.
A civil forfeiture suit is proper for those
monetary instruments or property that is
related to an unlawful activity or money
laundering offense. But there is difficulty in
enforcing the decision because the properties
can no longer be found or they might be
substantially altered or destroyed or is located
outside of the Philippines. So, a substitute in
those instances will be used for civil forfeiture
instead of the property that is the proceeds of
an unlawful activity.
This new remedy under the amendment by
virtue of RA 11521 is TARGET FINANCIAL
SANCTIONS.
TARGETED FINANCIAL SANCTIONS
Both: asset freezing and prohibition to prevent
funds or other assets from being made
available, directly or indirect for the benefit of
any individual, natural or legal persons or
entity designated pursuant to relevnt UN SC
Resolution Numbers 1718 of 2006 and 2231 of
2015.
Freeze Order for Targeted Financial Sanctions
 AMLC shall have the power to issue ex
parte an order to freeze without delay
 Remedy of defendant: lift within 20 days
from issuance filed with the CA
The freeze order for targeted financial sanctions
involves the other kind of freezing order that I
mentioned in our previous video.
Here, the AMLC shall have the power to issue
ex parte an order to freeze without delay. There
is no need for the AMLC to go to the CA to
request for a freeze order if it is for the purpose
of targeted financial sanctions.
The remedy, however, available to the
defendant is to lift within 20 days from issuance
filed with the CA.
 So it must be filed within 20 days from
issuance and to the CA
For what (Sec. 3(p))
Proliferation of weapons of mass destruction
and its financing
You might be wondering to yourself if the
second kind of freezing which is targeted
financial sanctions is in violation of any other
discussion of the SC on the freeze order which
requires that it should be by order of the CA.
This targeted financial sanction and the freezing
is only limited to the unlawful activity of
proliferation of weapons of mass destruction
and its financing.
The proliferation financing which is defined
under Sec. 3(p) of RA 11521 pertains to:
1. Making available an asset;
2. Providing a financial service; or
3. Conducting a financial transaction and
the person knows that or is reckless as
to whether the asset, financial service
or financial transaction is intended to, in
whole or in part, facilitate proliferation
of weapons of mass destruction.
If that money, if that property, if that assets is
being used solely for the proliferation of
weapons of mass destruction, then there is no
need to go to the CA to secure a freezing order.
This can be issued by the AMLC outright
without any order necessary.
The only observation I have in this part is that
when you take a look at the definition of
conducts of financial transaction, it says that it
should be either recklessly intended to, in
whole or in part.
So even if there is no knowledge that it might
be for the purpose of proliferation of weapons
of mass destruction, then it can be subject of a
freeze order. Ewan ko. I don’t understand the
use or is reckless.
Penal Provisions
The penal provisions for this law and the reason
why it falls under the jurisdiction of the RTC is
that the imprisonment is 7 years to 14 years for
violations of the crimes identified under 4a to
4d and a fine of Php. 3 million not more than
twice the amount.
For 4e and 4f, it’s 4 to 7 years.
The failure to report covered transactions is 6
months to 4 years with a fine still.
The failure to report for covered transactions is
6 months and 4 years with a fine still.
This new one is by virtue of RA 11521, the
breach of information of Security and
Confidentiality. The imprisonment is longer but
the fine is only Php500,000 to Php1,000,000.
The breach of information is a violation of the
confidentiality expected of this act not of the
Bank Secrecy Law. If it was reported by the
media, the writer, the president, the publisher,
manager and even the editor-in chief, may be
held liable for breach of information of security
and confidentiality. If they publish it, then it is
considered a breach of information punishable
by imprisonment.
You might be wondering what is this
information of security and confidentiality. This
is, again, a new provision of RA 11521 which
requires that the AMLC and its secretariat
would securely protect information that they
receive or process and shall not reveal in any
manner any information known to them by
reason of their office. It is their duty even if they
are separated from the AMLC. So, if they
disclosed it to another person, they can be held
liable for 3-8 years. If it is published, the one
that publishes it will also be liable for 3-8 years.
Prosecution of Money Laundering
- It is Independent of charge for the
unlawful activity
So, the unlawful activity will proceed
independently of money laundering,
after all, the cause of action is not the
same. The elements of the crime is not
the same.
- Can be convicted for both
The penalty for the unlawful activity is
not increased by the existence of a
money laundering offense but it is a
separate penalty that will be imposed
by the court, which may or may not be
the same court.
Some Other Powers of the AMLC
Section 12
By virtue of the second to the last amendment
of the Anti-Money Laundering Act, it was
identified that the AMLC has the authority to
require the LRA and all its RD to submit to the
AMLC reports on all real estate transactions
involving an amount in excess of Php500,000
within 15 days from the date of registration of
the transaction.
That’s why the LRA is a covered institution
because they are required to submit certain
documents if they see that say in a Deed of Sale
says that the property was sold for Php2 million,
that should be reported to the AMLC.
Other powers of the AMLC here by virtue of the
latest amendment is that they now have the
duty, the right to apply for search and seizure as
well as to issue subpoena duces tecum and also
to implement targeted financial sanctions. So,
the one that we discussed where they have the
right now to freeze certain property or certain
assets.
SAFE HARBOR PRINCIPLE
-NO administrative, criminal or civil proceedings
shall lie against any person for having made a
(Covered Transaction Reporting) CTR or an
(Suspicious Transaction Reporting) STR in the
regular performance of his duties in god faith,
whether or not such reporting in any criminal
prosecution under the AMLA or any other
Philippine Law.
Let’s say there is a lawyer who reported that a
transaction that was shown to him for
notarization but he did no notarize appears to
be suspicious in its nature and reported it to
AMLA. Well that lawyer shall not be held liable
for any administrative offense if he reported
that suspicion or transaction in good faith. Even
if it reporting turns out that reporting did not
result in any criminal prosecution even if it was
determined that there was nothing to it later
on. That cannot be a liability, that cannot be
used against the lawyer who reported the
suspicious transaction.
POLITICALLY EXPOSED PERSONS (PEP)
-are individuals who have been entrusted with
prominent public position in a) the Philippines
with substantial authority over policy,
operations or the use of allocation of
government-owned resources b) a foreign state
or c) an international organization
Covered Institutions are required to establish
the identity of:
 Politically Exposed Persons
 Immediate family members up to the
2nd degree
 Close Family relationships
It’s the duty of covered persons to take
reasonable measures to establish the source of
wealth and the source of customers and
beneficial owners identified as Politically
Exposed Persons.
So this is a measure to avoid graft and
corruption and an easy way of detecting if graft
and corruption was committed.
 Conduct enhanced ongoing monitoring
on that relationship.
-This is another duty of covered persons or
institutions.
If you’re not a politically exposed person
you don’t have any authority or resources
you don’t exercise any policy making rights
or obligations, then you are not subject to
this but once you become a politically
 exposed person or someone in your family
that they will be conducting enhanced
ongoing monitoring of your relationship
with the PEP.
 Court enhanced ongoing monitoring on that
relationship
Notice how they are treated differently from
normal individuals. Do you think that this is
necessary? Do you think that this is fair? I leave
you with that question after I discuss this one.
Ongoing Monitoring Process
Covered persons should have a system that
would understand the normal and reasonable
account or business conducted, are consistent
with the covered person’s knowledge of its
customer, their business and risk profile,
including where necessary, the source of funds.
The ongoing monitoring process will make a
system that would understand the normal and
reasonable account or business conducted to
determine if it is consistent with a covered
persons' knowledge of its customers their
business that is profiled including, when
necessary, the source of funds. This was
brought out in the implementing rules and
regulations in 2016. If I'm not mistaken, I don't
know if there was an earlier version of the
implementing rules and regulations that had
this identification of the PEP (politically exposed
persons).
So just try to think about why the necessity for
this, and what does it have to do with the
money laundering act?
CASES
We have a section on the discussion of two
cases. The first one is a case of PDIC vs.
Gidwani. If you're going to take a look at this
case, it appears to be as from the title that it's a
case of PDIC and how the pdic works. But there
was an allegation here that they should be held
at least charged or charged with money
laundering act for violation of Section 4a of RA
9160, as amended. This is how it was
determined.
PDIC v. Gidwani GR No. 234616, June 29, 2018
Manu and Champa Gidwan represented
themselves to be the owner of 471 deposits in
the amount of Php 98 M which were issued to
86 individuals.
This deposit came from banks which are owned
by the legacy group, which then was subject of
liquidation and because of their deposits in the
name of 86 individuals. They were all issued
checks by the PDIC in representation of the
insured deposits. So because there was a
liquidation, the PDIC would be the beneficial
owners. The beneficial owners were 86
individuals who were according to the findings
of the Supreme Court, were helpers and rank
and file employees of the Gidwani spouses.
Where does the money laundering aspect come
in? Well, this is not only a violation of the PDIC
law, but it's also a violation of the Money
Laundering Act because they made it appear
that certain individuals have the financial
capacity to deposit the amounts recorded in the
banks for them to be entitled to insure deposits
or payouts from the PDIC in the liquidation of
the legacy banks located nationwide. By making
it appear that they have financial capacity, this
is considered as money laundering offense. It's
one of those money laundering offense and
therefore punished by the amla for four to
seven years. There was a discussion or different
opinions from the DOJ that they should be held
liable or charged at the very least for money
laundering offense
They should be held liable or charged at the
very least for money laundering offense. The
DOJ dismissed any criminal complaint. The
Secretary of Justice (SOJ) denied it. Another
Justice reversed the decision. Another SOJ
reversed and imposed the previous Secretary’s
Resolution. The Court of Appeals reversed the
Paras Resolution because the 86 individuals are
presumed to be the owners and depositors and
that the Gidwani’s were only asked to manage
the funds. So before the Supreme Court (SC),
the SC again reversed the decision of the Court
of Appeals. It is potentially criminal on the part
of the Gidwanis in making it appear that there
were accounts maintained by their house
helpers and their rank-and-file employees. And
that they were merely being used as dummies.
And that the ownership was merely a
subterfuge in order to increase the deposits. So
this is considered as a money laundering
offense. The SC said that there was probable
cause to find that they were liable for money
laundering. And therefore an Information
should be filed against them.
Republic v. Bloombery Resorts and Hotels, Inc.
& BDO, G.R. No. 224112, September 2, 2020
[effectivity of freeze order]
- (2016) Hacking of Bangladesh Bank with
the Federal Reserve Bank of NY for
US$81M which found its way to the
Philippine Banking System
- There was Inquiry into RCBC by the
members of the Bangladesh Bank
involving the US$81M
- It was discovered that the Beneficiaries
were: Cruz, Lagrosas, Vergara and
Vasquez
- All of these were cleared. The amounts
were transferred or withdrawn on
February 5, 2016 or on the next working
day Feb. 9, 2016
- They also Determined that the huge
amount was transferred to William So
Go and credited to PhilRem, a
remittance company
- There was information from Go that
these money were used To take
advantage of influx of Chinese casino
players because it was Chinese New
Year and so delivered the amount (as
instructed by Go) to Bloomberry’s BDO
Account. Bloomberry is the BHRI here.
Bloomberry maintains a BDO Account
which is now used for facilitating
transactions with high rollers and
junkets in its most famous resort, i.e.,
Solaire.
AMLC’s action
- Ex parte application for freezing of the
account in BDO [March 15, 2016]
- Filed a petition or application for the
Inquiry into this BDO Account
BRHI argued:
- Not a covered institution at the time
the incident happened
- Account is for junket operators and high
rollers or very important customers like
Wang and Gao who used the money to
play in Solaire
CA:
- Ordered the lifting of the freeze order
- Failure to establish within given period
the subject account was acquired
through unlawful means or illegal
activity
SC:

- Agreed that this was already moot and

academic
- It should be limited only to six month
maximum period

6 months because the SC recognized that the

effectivity of a freeze order cannot extend
indefinitely or especially if it is more than 6
months because it will bar the use of the
account owner of any of the property covered
by the freeze order. Imposing beyond 6 months
will also be against the purpose of the order
which should only be preventive and interim
relief. If it is beyond 6 montshs, it boarders on
punishment

Takeaway in this SC decision:

- The period for the effectivity of this

freeze order cannot extend beyond 6
months and even if there is petition,
that does not stop the period and
cannot be extended through issuance of
TRO etc.. Within that 6 months there
should have been an established
evidence to show that it is related to
unlawful activity espacially the hacking.
Here the 20 days after the issuance of
the freeze order, none was determined
so it was proper that it be lifted because
that is the period for the lifting,
modification or even just the extension
which should not be more than 6
months