“Anti-Money Laundering Act” (AMLA)

(Republic Act No. 9160, as amended by

Republic Act Nos. 9194, 10167, 10365 and
11521)

PURPOSE /POLICY

1. To protect and preserve the integrity and confidentiality of

bank accounts;

2. To ensure that the Philippines shall not be used as a money

laundering site for the proceeds of any unlawful activity;

3. To extend cooperation in transnational investigations and

prosecutions of persons involved in money laundering activities
wherever committed; and

4. To protect life, liberty and property from acts of terrorism and

to condemn terrorism and those who support and finance it; and to
recognize it as inimical and dangerous to national security and the
welfare of the people; and to make the financing of terrorism a
crime against the Filipino people, against humanity and against the
law of nations.

5. To reinforce the fight against terrorism by preventing and

suppressing the commission of said offenses through freezing and
forfeiture of property or funds while protecting human rights.

6. To implement targeted financial sanctions related to the

financing of the proliferation of weapons of mass destruction,
terrorism, and financing of terrorism, pursuant to the resolutions of
the United Nations Security Council.

IMPORTANCE OF ANTI- MONEY LAUNDERING

Anti-money-laundering (AML) policies and procedures exist to help

financial institutions combat money laundering by stopping
criminals from engaging in transactions to disguise the origins of
funds connected to illegal activity.
DEFINITION OF TERMS:

“Anti-Money Laundering Act” (AMLA) refers to Republic Act No.

9160, as amended by Republic Act Nos. 9194, 10167 and 10365.

B.    “Anti-Money Laundering Council” (AMLC) refers to the

financial intelligence unit of the Republic of the Philippines which is
the government agency tasked to implement the AMLA. It
functions as the AML/CTF regulator and supervisor, financial
intelligence unit, and primary law enforcement agency of the
Philippines against money laundering and terrorist financing. The
AMLC may refer to (1) the government agency or (2) the Council,
which heads the said government agency.
C.    “Supervising Authority” refers to the Bangko Sentral ng
Pilipinas (BSP), the Securities and Exchange Commission (SEC),
the Insurance Commission (IC), or the relevant regulatory bodies
of the Designated Non-Financial Businesses and Professions
enumerated under Rule 3.E.4, or other government agencies
designated by Law.

D.    “Person” refers to any natural or juridical person.

FUNCTIONS OF THE ANTI MONEY LAUNDERING COUNCIL

(AMLC)

1. Require and receive covered or suspicious transaction

reports from covered institutions (banks and all other
institutions and their subsidiaries and affiliates supervised or
regulated by the BSP; insurance companies and all other
institutions supervised or regulated by the IC; and securities
dealers and other entities supervised or regulated by the
SEC);
2. Issue orders addressed to the appropriate Supervising
Authority (the BSP, IC or SEC) or the covered institution to
determine the true identity of the owner of any monetary
instrument/property subject of a covered or suspicious
transaction report, or request for assistance from a foreign
State, or believed by the AMLC, on the basis of substantial
evidence, to be representing, involving, or related to the
proceeds of an unlawful activity; 
3. Institute civil forfeiture proceedings and all other remedial
proceedings through the Office of the Solicitor General;
4. Cause the filing of complaints with the Department of Justice
or the Ombudsman for the prosecution of money laundering
offenses;
5. Investigate suspicious transactions and covered transactions
deemed suspicious after an investigation by AMLC, money
laundering activities, and other violations of the AMLA, as
amended;
6. Apply before the Court of Appeals, ex parte, for the freezing
of any monetary instrument/property alleged to be proceeds
of any unlawful activity as defined in the AMLA;
7. Implement such measures as may be necessary and justified
to counteract money laundering;
8. Receive and take action in respect of any request for
assistance from foreign states in their own anti ‐money
laundering operations;   
9. Develop educational programs on the pernicious effects of
money laundering, the methods and techniques used in
money laundering, the viable means of preventing money
laundering and the effective ways of prosecuting and
punishing offenders;
10. Enlist the assistance of any branch, department, bureau,
office, agency or instrumentality of the government, including
government‐owned and –controlled corporations in
undertaking any and all anti‐money laundering operations,
which may include the use of its personnel, facilities and
resources for the more resolute prevention, detection and
investigation of money laundering offenses and prosecution
of offenders;   
11. Impose administrative sanctions for the violation of laws,
rules, regulations and orders and resolutions issued pursuant
thereto; and   
12. Inquire or examine any particular deposit or investment,
including related accounts, 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 or a money laundering offense under the
AMLA as amended. 
13. Issue an ex parte freeze order related to financing of
terrorism or acts of terrorism or owned by any persons or
persons in relation to whom there is probable cause to
believe that such person/persons are committing or
attempting or conspiring to commit or participating in or
facilitating terrorism financing or acts of terrorism; 
14. Investigate property or funds related to financing of terrorism
or acts of terrorism or owned by any persons or persons in
relation to whom there is probable cause to believe that such
person/persons are committing or attempting or conspiring to
commit or participating in or facilitating terrorism financing or
acts of terrorism; 
15. Issue a freeze order with respect to property or funds to
comply with terrorism related Resolutions; 
16. Enlist the assistance of any branch, department , bureau,
office, agency or instrumentality of the government including
government owned and controlled corporations in
undertaking measures to counter terrorism financing  
17. In the conduct of investigations, it has the power to apply for
the issuance of search and seizure orders with any
competent court,
18. In the conduct of investigations, it may also apply for the
issuance of subpoena duces tecum and/or subpoena ad
testificandum with any competent court
19. It has the power to issue and implement Targeted Financial
Sanctions (TFS) which refer to asset freezing and prohibition
to prevent funds or other assets from being made available
to entities designated pursuant to United Nations Security
Council resolutions in case of proliferation of weapons of
mass destruction and proliferation financing
20. Through an Asset Management Unit, it is tasked with
preserving, managing, or disposing assets pursuant to a
freeze order, asset preservation order, or judgment of
forfeiture. 

WHO ARE “COVERED PERSONS”?

1. Persons supervised or regulated by Bangko Sentral ng

Pilipinas (BSP), such as:

a. Banks;
b. Non-banks;
c. Quasi-banks;
d. Trust entities;
e. Pawnshops;
f. Non-stock savings and loan associations;
g. Electronic money issuers; and
h. All other persons and their subsidiaries and affiliates
supervised or regulated by the BSP.
 i. foreign exchange dealers, money changers, and
remittance and transfer companies

2.      Persons supervised or regulated by Insurance

Commission (IC), such as:

a.     Insurance companies;

b.     Pre-need companies;
c.     Insurance agents;
d.     Insurance brokers;
e.     Professional reinsurers;
f.     Reinsurance brokers;
g.     Holding companies;
h.     Holding company systems;
i.     Mutual benefit associations; and
j.     All other persons and their subsidiaries and affiliates
supervised or regulated by the IC.

3.      Persons supervised or regulated by Securities and

Exchange Commission (SEC), such as:

a.     Securities dealers, brokers, salesmen, investment

houses, and other similar persons managing securities
or rendering services, such as investment agents,
advisors, or consultants.

b.     mutual funds or open-end investment companies,

close-end investment companies or issuers, and other
similar entities;

c.     other entities, administering or otherwise dealing in

commodities, or financial derivatives based thereon,
valuable objects, cash substitutes, and other similar
monetary instruments or properties, supervised or
regulated by the SEC.

4.     Designated Non-Financial Businesses and

Professions (DNFBPs):

a.     Jewelry dealers, dealers in precious metals, and

dealers in precious stones.
b.     Company service providers which, as a business,
provide any of the following services to third parties:

b.i.    acting as a formation agent of juridical persons;

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

c.     Persons, including lawyers and accountants, who

provide any of the following services:

c.i.     Management of client money, securities or other

assets;
c.ii.    Management of bank, savings, securities or other
assets;
c.iii.   Organization of contributions for the creation,
operation or management of companies; and
c.iv.   Creation, operation or management of juridical
persons or arrangements, and buying and selling
business entities.

EXCEPT: Lawyers and accountants who are:

(1) authorized to practice their profession in the
Philippines; and
(2) engaged as independent legal or accounting
professionals, in relation to information
concerning their clients, or where disclosure of
information would compromise client confidences
or the attorney-client relationship

* “Independent legal or accounting professional”

are lawyers and accountants working in a private
firm or as a sole practitioner who by way of
business provides purely legal, notarial or
accounting services to their clients.
7. Casinos, including internet-based casinos and ship-based
casinos, with respect to their casino cash transactions
related to their gaming operations.
8. Real estate developers and brokers
9. Offshore gaming operators, as well as their service
providers, supervised, accredited or regulated by the
Philippine Amusement and Gaming Corporation
(PAGCOR) or any government agency

PRIMARY DUTIES OF COVERED PERSONS

1. To cooperate with the AMLC in the, discharge of the latter’s
mandate, and execution of its lawful orders and issuances, to
protect their businesses or professions from being used in ML/TF
activities.
2. To secure a license or registration with the appropriate
Supervising Authorities, if any, or the appropriate government
agency before they shall operate, as required by the laws covering
their operations.
3. To register with AMLC
4. Prohibit shell bank to operate or be established in the
Philippines

CONCEPT OF BENEFICIAL OWNERSHIP

Beneficial ownership refers to such ultimate ownership or control
of the customer by an individual or natural person or the conduct of
a transaction for another person.
Beneficial Owner – refers to any natural person who:
1. Ultimately owns or controls the customer and/or on whose
behalf a transaction or activity is being conducted; or
2. Has ultimate effective control over a legal person or
arrangement.

Money launderers and terrorists routinely use the cloak of

anonymity to prevent the AMLC and law enforcement agencies
(LEAs) to track them down. In the case of the AMLC, they also
seek to avoid freezing and forfeiture of their assets obtained
through criminal activities.
The AMLA issued guidelines which provide that covered persons
must identify beneficial owners. Covered persons must conduct
the risks posed by the customer and the beneficial owners. If they
pose a high risk for money laundering or terrorism financing,
validation of information must be performed by the covered
person.
“Beneficial Ownership Verification” (BOV) is the process of taking
reasonable measures to identify and verify the beneficial owner,
including the determination of the true nature of the beneficial
owner’s capacities and duties vis-à-vis his agent, nominee or
trustee.

COVERED TRANSACTIONS

(1) a transaction in cash or other equivalent monetary instrument

involving a total amount in excess of Five Hundred Thousand
Pesos (Php 500,000.00) within one (1) banking day, including the
offshore gaming operators/service providers .

(2) a single transaction exceeding One Million pesos

(Php1,000,000.00) in cases of jewelry dealers, dealers in precious
metals and dealers in precious stones.

(3) a single casino cash transaction involving an amount in excess

of Five million pesos (P5,000,000.00) or its equivalent in any other
currency in case of casinos

(4) a single cash transaction involving an amount in excess of

Php7,500,000.00 in case of real estate developers and brokers,

SUSPICIOUS TRANSACTIONS

Suspicious transaction is a transaction with covered institutions,

regardless of the amounts involved where any of the following
circumstances exist:

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
law;
5. any circumstances relating to the transaction which is
observed to deviate from the profile of the client and/or the
client’s past transactions with the covered institution;
6. the transaction is in a way related to an unlawful activity or
offense under the Anti-Money Laundering Act that is about to
be, is being or has been committed; or
7. any transactions that is similar or analogous to any of the
foregoing.

UNLAWFUL ACTIVITIES

Unlawful Activity” refers to any act or omission, or series or

combination thereof, involving or having direct relation, to the
following:

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 No. 455, and Republic
Act No. 1937, as amended, otherwise known as the
“Tariff and Customs Code of the Philippines”;
11.     Violations under Republic Act No. 8792, otherwise
known as the “Electronic Commerce Act of 2000”;
12.     “Hijacking” and other violations under Republic Act No.
 6235, otherwise known as the “Anti-Hijacking Law”;
“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;
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, as amended”;
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 IV 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.     Violations 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 “Anti-Carnapping Act of 2002, as amended”;
26.     Violation 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 “Anti-Fencing 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”;
29.     Violation of Republic Act No. 8293, otherwise known as
the “Intellectual Property Code of the Philippines, as
amended”;    
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”;
34.  Felonies or offenses of a nature similar to the
aforementioned unlawful activities that are punishable
under the penal laws of other countries.
35. Violation of the Strategic Trade Management
Act relating to the proliferation of weapons of
mass destruction and proliferation financing
36. Tax evasion, where the deficiency tax in the final
assessment in excess of Php25,000,000.00 per
taxable year for each tax type covered and
there being previous finding of probable cause by
a competent authority

HOW IS MONEY LAUNDERING COMMITTED?

(a) Any person who, knowing that any monetary instrument or
property represents, involves, or relates to the proceeds of any
unlawful activity:

(1) transacts said monetary instrument or property;

(2) converts, transfers, disposes of, moves, acquires,
possesses or uses said monetary instrument or property;

(3) conceals or disguises the true nature, source, location,

disposition, movement or ownership of or rights with respect
to said monetary instrument or property;

(4) attempts or conspires to commit money laundering

referred to in (1), (2), or (3) above;

(5) aids, abets, assists in, or counsels the commission of the

money laundering offenses referred to in (1), (2), or (3)
above; and

(6) performs or fails to perform any act as a result of which

he facilitates the offense of money laundering referred to in
items (1), (2), or (3) above.

(b) Any covered person who, knowing that a covered or suspicious

transaction is required under the AMLA to be reported to the
AMLC, fails to do so.

PREVENTIVE MEASURES

PROHIBITED ACCOUNTS

1. Anonymous Accounts and Accounts under Fictitious Names.

Covered persons shall maintain customers’ account only in the

true and full name of the account owner or holder.

2. Anonymous accounts, accounts under fictitious names, and all

other similar accounts shall be absolutely prohibited.

3. Numbered Accounts.
Numbered accounts, except non-checking numbered accounts,
shall not be allowed. Covered Transaction Reports and Suspicious
Transaction Reports involving non-checking numbered accounts
shall contain the true name of the account holder.

4. Annual Testing to Determine True Identity of Accounts.

The Supervising Authorities may conduct annual testing for the

sole purpose of determining the existence and true identity of the
foregoing accounts, if any.

PREVENTION OF MONEY LAUNDERING

CUSTOMER DUE DILIGENCE (CDD)

Covered persons shall conduct CDD for the following purposes:

(a) To identify the customer, and its agents and beneficial owners;
(b) To determine the risk posed by each customer;
(c) To establish, maintain, close or terminate the account or
business relationship; and
(d) To assess the level of monitoring to be applied

Customer Due Diligence Measures

Covered persons shall conduct the appropriate CDD measures,

which include the following procedures:

(a) Customer Identification Process;

(b) Customer Verification Process;
(c) Identification and Verification of Agents;
(d) Beneficial Ownership Verification;
(e) Determination of the Purpose of Relationship; and
(f) Ongoing Monitoring Process;

Customer Identification Requirements

(a) Customer Identification. -

Covered institutions shall:

 establish and record the true identity of its clients based on
official documents
 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.
 Prohibit/not allow anonymous accounts, accounts under
fictitious names, and all other similar accounts
 Allow peso and foreign currency nonchecking numbered
accounts 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 Keeping

 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, termination of the business or
professional relationship or after the date of the occasional
transaction, 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, business or professional relationship
terminated or after the date of the occasional transaction.
 Retention of Records Where there is a Case. If a case has
been filed in court involving the account, records must be
retained and safely kept beyond the five (5)-year period, until it
is officially confirmed by the AMLC Secretariat that the case
has been resolved, decided or terminated with finality .
 Covered persons shall retain all transaction records either in:
(a) their original forms; or
(b)such other forms sufficient to permit reconstruction
of individual transactions so as to provide admissible
evidence in court.
 Covered persons shall keep the electronic copies of all
Covered Transaction Reports and Suspicious Transaction
Reports for, at least, five (5) years from the dates of submission
to the AMLC.
 For low risk customers, covered persons shall maintain and
store, in whatever form, a record of information data and
transactions, sufficient to permit reconstruction of individual
transactions so as to provide, if necessary, evidence for
prosecution of criminal activity.
(c) Reporting of Covered Transactions. -

 Covered persons shall file all Covered Transaction Reports and

Suspicious Transaction Reports, in accordance with the
registration and reporting guidelines of the AMLC.
 Covered institutions shall report to the AMLC all covered
transactions within five (5) working days from occurrence
thereof, unless the Supervising Authority concerned prescribes
a longer period not exceeding fifteen (15) working days.
 Suspicious Transaction Reports shall be filed within the period
prescribed under the registration and reporting guidelines of the
AMLC.
 Should a transaction be determined to be both a covered and a
suspicious transaction, the same shall be reported as a
suspicious transaction. In this regard, it shall be reported first
as a Covered Transaction Report, subject to updating if it is
finally confirmed to be reportable as a Suspicious Transaction
Report.
 Covered institutions and their officers, employees,
representatives, agents, advisors, consultants or associates
are prohibited from communicating, directly or indirectly, in any
manner or by any means, to any person, media, or entity the
fact that a covered transaction report was made, the contents
thereof, or any other information in relation thereto. In case of
violation thereof, the concerned officer, employee,
representative, agent, advisor, consultant or associate of the
covered institution, shall be criminally liable.
 A covered transaction report shall not 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, employee, representative, agent, advisor,
consultant or associate of the covered institution, or media shall
be held criminally liable.
 All covered persons shall register with the AMLC’s electronic
reporting system in accordance with the registration and
reporting guidelines.
 Covered persons which are not required to have an electronic
system of flagging and monitoring transactions, as determined
by Supervising Authorities shall ensure that they have the
means of flagging and monitoring the transactions.

WHAT IS SAFE HARBOR PROVISION?

No administrative, criminal or civil proceedings, shall lie against
any person for having made a covered transaction report in the
regular performance of his duties and in good faith, whether or not
such reporting results in any criminal prosecution under this Act or
any other Philippine law.

PREVENTIVE MEASURES FOR SPECIFIC TRANSACTIONS

AND ACTIVITIES

1. “Politically-Exposed Person” (PEP) - refers to an individual

who is or has been entrusted with prominent public position in
(a) the Philippines with substantial authority over policy,
operations or the use or allocation of government-owned
resources;
(b) a foreign State; or
(c) an international organization.

Covered persons shall establish and record the true and full
identity of PEPs, as well as their immediate family members and
close relationships /associates.

2. Life Insurance and Other Investment-related Insurance

Policies.

Covered persons shall conduct the following CDD measures on

the beneficiary of life insurance and other investment related
insurance policies, as soon as the beneficiary is identified or
designated

3. Correspondent Banking - refers to the provision of banking

services by one bank, called the correspondent bank, to another
bank, called the respondent bank.

Covered persons shall adopt policies and procedures to prevent

correspondent banking activities from being utilized for ML/TF
activities, and designate an officer responsible in ensuring
compliance with these policies and procedures

4. Money or Value Transfers Services.

Covered persons which provide money or value transfer services

shall register with the BSP for purposes of supervision and
checking compliance with the AMLA and TFPSA, their respective
IRR, and other AMLC issuances. They shall also register with the
AMLC for purposes of filing Covered Transaction reports and
Suspicious Transaction reports.

5. New Technologies.

The AMLC, in coordination with the relevant Supervising

Authorities, LEAs, OGAs, and covered persons, should identify
and assess the ML/TF risks that may arise in relation to the
development of new products and new business practices,
including new delivery mechanisms, and the use of new or
developing technologies for both new and pre-existing products.

6. Shell Bank, Shell Company and Bearer Share Entity.

Shell Bank - refers to a bank that has no physical presence in the

country in which it is incorporated and licensed, and which is
unaffiliated with a regulated financial group that is subject to
effective consolidated supervision

Bearer Shares - refers to negotiable instruments that accord

ownership in a juridical person to the person who possesses the
bearer share certificate

A covered person shall

1. always apply Enhanced Due Diligence on both the entity and

its beneficial owners when dealing with a shell company.

2. refuse to deal, enter into, or continue, correspondent banking

relationship with shell banks.

3. guard against establishing relations with foreign financial

institutions that permit their accounts to be used by shell banks.

4. If dealing with bearer share entities, shall be required to

conduct EDD diligence on said entities and their existing
stockholders and/or beneficial owners at the time of opening of
the account.

7. High-Risk Jurisdiction or Geographical Location.

Covered persons shall apply Enhanced Due Diligence,
proportionate to the risks, to accounts, transactions, and business
and professional relationships with customers who are nationals or
citizens from foreign jurisdiction or geographical location that
presents greater risk for ML/TF or its associated unlawful activities,
or is recognized as having inadequate internationally accepted
AML/CTF standards, as determined by the relevant domestic or
international bodies.

ASSET FORFEITURE IN MONEY LAUNDERING CASES

Where there is conviction for money laundering, the court shall

issue a judgment of forfeiture in favor of the Government of the
Philippines with respect to the monetary instrument or property
found to be proceeds of or related to an unlawful activity.

-END OF LECTURE-