ANTI-MONEY LAUNDERING ACT

 Money Laundering – a crime committed by any person who knowing that any monetary instrument
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 offenses referred to in (1), (2) or (3);
5. aids, abets, assists in or counsels the commission of the money laundering offenses referred to in
(1), (2) or (3);
6. performs or fails to perform any act as a result of which he facilitates the offense of money
laundering referred to in (1), (2), or (3);
Money Laundering is also committed by failure to report to the Anti-Money Laundering
Council (AMLC) by any covered person knowing that a covered or suspicious transaction is
required under the Anti-Money Laundering Law to be reported thereto (R.A. No. 9160, as
amended by R.A. No. 10365 approved on February 15, 2013).

 Covered Transaction – it is a transaction in cash or other equivalent monetary instrument involving a total
amount in excess of P500,000.00 within one banking day; for casinos that are now covered under Section
3(a)(8), a single casino transaction involving an amount in excess of P5 Million or its equivalent in any
other currency (R.A. No. 9160, as amended by R.A. 10927).
 Covered Entities. The following are the Covered Entities as enumerated in the 2016 IRR of the AMLA (2006
Bar):
1. Persons supervised or regulated by BSP, such as
1. Banks;
2. Non-banks;
3. Quasi-banks;
4. Trust entities;
5. Pawnshops;
6. Non-stock savings and loan associations;
7. Electronic money issuers; and
8. All other persons and their subsidiaries and affiliates supervised or regulated by the BSP
For purposes of the IRR, foreign exchange dealers, money changers, and remittance and
transfer companies are covered persons under the supervision of the BSP.

2. Persons supervised or regulated by IC, such as

1. Insurance companies;
2. Pre-need companies;
3. Insurance agents;
4. Insurance brokers;
5. Professional reinsurers;
6. Reinsurance brokers:
7. Holding companies;
8. Holding company systems;
9. Mutual benefit associations; and
10. All other persons and their subsidiaries and affiliates supervised or regulated by the IC.
3. Persons supervised or regulated by SEC, such as:

1. Securities dealers, brokers, salesmen, in- vestment houses, and other similar persons managing
securities or rendering services, such as investment agents, advisors, or consultants.

2. mutual funds or open-end investment companies, close-end investment companies or issuers,

and other similar entities;

3. 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. The following Designated Non-Financial Businesses and Professions (DNFBPs)

1. Jewelry dealers, dealers in precious metals, and dealers in precious stones.

2. Company service providers which, as at business, provide any of the following services to third
parties:

1. acting as a formation agent of juridical persons;

2. acting as (or arranging for another per- son 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;

3. 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

4. acting as (or arranging for another person to act as) a nominee shareholder for another
person.
3. Persons, including lawyers and accountants who provide any of the following services:

1. Managing of client money, securities, or other assets;

2. Management of bank, savings, securities, or other assets;

3. Organization of contributions for the creation, operation, or management of

companies; and

4. Creation, operation, or management of juridical persons or arrangements, and

buying and selling business entities.

Notes:

1. Notwithstanding the foregoing, 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, are
not covered persons.

"Independent legal or accounting professionals" are lawyers and

accountants working in a private firm or as sole practitioners who by way of
bus ness provide purely legal, notarial, or accounting services to their clients.

2. Casinos are also now covered entities (R.A. No. 9160 as amended by R.A. No.
10927). Casino refers to a business authorized by the appropriate government
agency to engage in gaming operations:
 1. "Internet-based casinos" shall refer a casino in which persons participate by
the use of remote communication facilities such as, but not limited to,
internet, telephone, television, radio or any other kind of electronic or other
technology for facilitating communication; and

2. "Ship-based casino" shall refer to casinos, the operation of which is

undertaken on board a vessel, ship, boat, or any other water-based craft
wholly or partly intended for gambling (Ibid.).

 Suspicious transaction

Transactions 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 AMLA:

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 any way related to an unlawful activity or events under the AMLA that is about
to be, is being or has been committed; or
7. any transaction that is similar or analogous to any of the foregoing

 Unlawful Activity
Any act or omission or series or combination thereof involving of having relation to the following (2007 Bar):
1. Kidnapping for ransom under Article 267 of Act No. 3815, otherwise known as the Revised
Penal Code, as amended;
2. Section 4, 5, 6, 8, 9, 10, 11, 12, 13, 14, 15, and 16 of R.A No. 9165, otherwise known as the
Comprehensive Dangerous Drugs Act of 2002;
3. Section 3 paragraphs B, C, E, G, H, and I of R.A. No. 3019, as amended, otherwise known as the
Anti-Graft and Corrupt Practices Act;
4. Plunder under R.A. 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 P.D. No. 1602;
7. Piracy on the high seas under the Revised Penal Code, as amended and P.D. 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 R.A. Nos. 455 and 1937;
11. Violations of R.A. No. 8792, otherwise known as the Electronic Commerce Act of 2000;
12. Hijacking and other violations under R.A. No. 6235; destructive arson and murder, as defined
under the Revised Penal Code, as amended;
13. Terrorism and conspiracy to commit terrorism as defined and penalized under Sections 3 and 4
of R.A. No. 9372;
14. Financing of terrorism under Section 4 and offenses punishable under Sections 5, 6, 7, and 8 of
R.A. 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 R.A. No. 9208, otherwise known as the Anti-Trafficking in
Persons Act of 2003;
20. Violations of Sections 78 to 79 of Chapter IV, of P.D. No. 705, otherwise known as the Revised
Forestry Code of the Philippines, as amended;
21. Violations of Sections 86 to 106 of Chapter VI, of R.A. No. 8550, otherwise known as the
Philippine Fisheries Code of 1998;
22. Violations of Sections 101 to 107, and 110 of R.A. No. 7942, otherwise known as the Philippine
Mining Act of 1995;
23. Violations of Section 27(c), (e), (f), (g), and (i), of R.A. No. 9147, otherwise known as the Wildlife
Resources Conservation and Protection Act;
24. Violation of Section 7(b) of R.A. No. 90, 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. Violations of Sections 1, 3, and 5 of P.D. 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 P.D. No. 1612, otherwise known as the Anti-Fencing Law;
28. Violation of Section 6 of R.A. No. 8042, otherwise known as the Migrant Workers and Overseas
Filipinos Act of 1995, as amended by R.A. No. 10022;
29. Violation of R.A. No. 8293, otherwise known as the Intellectual Property Code of the
Philippines;
30. Violation of Section 4 of R.A. No. 9995, otherwise known as the Anti-Photo and Video
Voyeurism Act of 2009;
31. Violation of Section 4 of R.A. 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 R.A. No. 7610, otherwise
known as the Special Protection of Children Against Abuse, Exploitation and Discrimination;
33. Fraudulent practices and other violations under R.A. No. 8799, otherwise known as the
Securities Regulation Code of 2000; and
34. Felonies or offenses of a similar nature that are punishable under the penal laws of other
countries (Sec. 3[i] R.A. No. 9160, as amended by R.A. No. 10365).
 Obligations of Covered Institutions (Sec. 9)
a. Customer Identification. – Covered institutions shall establish and record the true identity of its
clients based on official documents. They shall maintain a system of verifying the true identity of
their clients and, in case of corporate clients, require a system of verifying their legal existence and
organizational structure, as well as the authority and identification of all persons purporting to act
on their behalf.
b. Record Keeping – All records of all transactions of covered institutions shall be maintained and
safely stored for five years from the dates of transactions. With respect to closed accounts, the
records on customer identification, account files and business correspondence, shall be preserved
and safely stored for at least five years from the dates when they were closed.
c. Reporting of Covered and Suspicious Transactions – Covered institutions shall report to the Anti-
Money Laundering Council (AMLC) all covered or suspicious transactions within five working days
from occurrence thereof, unless AMLC prescribes a longer period not exceeding 15 working days.
Conviction of the unlawful activity is not necessary before a report is made (2006 Bar).

 Freezing of Monetary Instrument or Property

The Court Appeals may issue a Freeze Order under the following conditions:
1. There must be a verified ex parte petition by the AMLC;
2. CA must determine that probable cause exists that any monetary instrument or property is in any
way related to an unlawful activity as defined in Section 3(i) of R.A. No. 9160 (See enumeration in
1.05 above);
3. The freeze order shall be effective immediately for a period of 20 days;
4. The CA shall then conduct a summary hearing, with notice to the parties, to determine whether or
not to modify or lift the freeze order, or extend its effectivity;
5. The freeze order shall be for a period not exceeding six months (Sec. 10, R.A. No. 9160, as
amended by R.A. Nos. 10167, 10365, and 10927).

a. The Court of Appeals should act on the petition to freeze within 24 hours from filing
of the petition. If the application is filed a day before a nonwork- ing day, the
computation of the 24-hour period shall exclude the nonworking days (Sec. 10, R.A
No. 9160, as amended by R.A. No. 10167)
b. If no case is filed against a person whose account has been frozen within the period
determined by the Court of Appeals, not exceeding six months, the freeze order shall
be deemed ipso facto lifted (Sec. 10, R.A. No. 9160, as amended by R.A. No. 10927).
c. A person whose account has been frozen may file a motion to lift the freeze order
and the court must resolve this motion before the expiration of the freeze order (Sec.
10, R.A. No. 9160, as amended by R.A. No. 10167 and 10365).
d. No court shall issue a temporary restraining order or a writ of injunction against any
freeze order, except the Supreme Court (Sec. 10, R.A. No. 9160, as amended by R.A.
No. 10167).
e. The freeze order is without prejudice to an asset preservation order that the Regional
Trial Court having jurisdiction over the appropriate anti- money laundering case or
civil forfeiture case may issue on the same account depending upon the
circumstances of the case, where the Court of Appeals will remand the case and its
records (Sec. 10, R.A. No. 9160, as amended by R.A. No. 10927).
 f. The freeze order or asset preservation order issued under this Act shall be limited
only to the amount of cash or monetary instrument or value of property that the
court finds there is probable cause to be considered as proceeds of a predicate
offense, and the freeze order or asset preservation order shall not apply to amounts
in the same account in excess of the amount or value of the proceeds of the
predicate offense (Sec. 10, R.A. No. 9160, as amended by R.A. No. 10927).

 Authority of AMLC to Inquire into and Examine Bank Deposits ( Sec. 11, R.A. No. 9160, as amended by
R.A. No. 10167)
The AMLC may inquire into or examine any particular deposit or investment, including related
accounts, with any banking institution or non-bank financial institution. This can be either upon order of
the court or even without court order in certain exceptional cases.
a. Court Order Required: Examination by AMLC based on a Court Order upon Ex Parte Application
– in cases of violations of R.A. No. 9160 as amended, 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 (see enumeration in 1.05 above) or
 a money laundering offense.
1. Related Accounts. A court order ex parte must first be obtained before the AMLC can inquire into
Related Accounts.
Note: Related accounts shall refer to accounts, the funds and sources of which originated
from and/or are materially linked to the monetary instrument(s) or property(ies) subject of the
freeze order(s).
2. The Court of Appeals must act on the application within 24 hours from the filing.
b. No Court Order – shall be required for the examination of bank deposits by AMLC in cases
involving:
1. Kidnapping for ransom under Article 267 of Act No. 3815, otherwise known as the Revised
Penal Code, as amended;
2. Sections 4, 5, 7, 8, 9, 10, 12, 13, 14, 15, and 16 of Republic Act No. 9165 otherwise known
as the Comprehensive Dangerous Drugs Act of 2002;
3. Hijacking and other violations under R.A. No. 6235; destructive arson and murder, as
defined under the Revised Penal Code, as amended, including those perpetrated by
terrorists against non-combatant persons and similar targets;
4. Felonies or offenses of a nature similar to those mentioned in Section 3(i)(1), (2), and (12)
which are punishable under the penal laws of other countries; and
5. Terrorism and conspiracy to commit terrorism as defined and penalized under R.A. No.
9372.
c. The authority of AMLC to inquire into or examine the main account and the related accounts shall
comply with the requirements of Article III, Sections 2 and 3 of the 1987 Constitution.
d. Inquiry into deposits under Section 11 does not require a pre-existing criminal case (Republic
Eugenio, G.R. No. 174629, February 14, 2008) (2006 Bar).
e. Section 11 of the AMLA providing for ex-parte application and inquiry by the AMLC into certain
bank deposits and investments does not violate substantive due process, there being no physical
seizure of property involved at that stage. It is the preliminary and actual seizure of the bank
deposits or investments in question which brings these within reach of the judicial process,
specifically a determination that the seizure violated due process (Subido Pagente Certeza
Mendoza and Binay Law Offices v. The Court of Appeals, et al., G.R. No. 216914, December 6,
2016).
f. There is also no violation of the right to privacy (Ibid.). The Supreme Court explained that the law
provides safeguards before a bank inquiry order is issued, ensuring adherence to the general state
policy of preserving the absolutely confidential nature of Philippine bank accounts (Ibid.):
1. The AMLC is required to establish probable cause as basis for its ex parte application for
bank inquiry order;
2. The CA, independent of the AMLC's demonstration of probable cause, itself makes a
finding of probable cause that the deposits or investments are related to an unlawful
activity under Section 3(i) or a money laundering offense under Section 4 of the AMLA;
3. A bank inquiry court order ex parte for related accounts is preceded by a bank inquiry
court order ex parte for the principal account which court order ex parte for related
accounts is separately based on probable cause that such related account is materially
linked to the principal account inquired into; and
4. The authority to inquire into or examine the main or principal account and the related
accounts shall comply with the requirements of Article III, Sections 2 and 3 of the
Constitution.