ANTI MONEY LAUNDERING LAW RA 9160 • Recommendation No.

8 - (Calls for the

(Anti-Money Laundering Act of 2001 [AMLA]) review of adequacy of laws and
RA 9160 (ANTI- MONEY LAUNDERING ACT OF regulations on NPOs)
2001 (AMLA) • Recommendation No. 9 - (Cash
Couriers)
Sec. 4: Money laundering is a CRIME whereby
• February 11, 2005 – FATF removed
the proceeds of an Unlawful activities are
the Philippines in the list of
deposited or channeled to a bank and make
NonCooperative Countries and
them appear to have originated from
Territories (NCCTs)
legitimate sources
THREE STAGES OF MONEY LAUNDERING –
HISTORY
- Placement
• originated from Mafia ownership of
- Layering
Laundromats in the US
- Integration
• extortion, prostitution, gambling and
bootleg liquor. Taken together form the entire cycle of
• mixed with illicit business. money laundering Two goals: Hiding
• 1931 Al Capone was convicted for tax where the money came from and where it
evasion is going
• Meyer Lansky (Mob’s Accountant)
Stage 1 – Placement
Uses Swiss facilities (Loan-back
concept) Involves the initial placement or
• 1980’s - International level Money introduction of the illegal funds into the
laundering was to combat the “war on financial system. Ex. a. Smurfing or
drugs” structuring b. Purchase of insurance
• 1990’s –includes all serious crimes contract
involve including the abuse of power
so it has become a tool in the return Stage 2 - Layering
of assets
involves a series of financial transactions
• The Basel Institute on Governance
during which the dirty money is passed
Singapore, Switzerland, USA, UK
through a series of procedures, putting
(important financial centers in cross
layer upon layer of persons and financial
border banking)
activities into the laundering process. Ex.
• 1990 - FATF issued 40
a. electronic transfer of funds B. disguised
Recommendations June 2000 – transfer of funds as payment for goods or
Includes Philippines in its list of Non-
services
Cooperative Countries and Territories
(NCCT) October 2001 – RA No. 9160 Stage 3 – Integration
“AMLA of 2001” enacted March 2003
– RA No. 9194 Act amending RA No. the money is once again made available
9160 to the criminal with the occupational and
geographic origin obscured or concealed. -
• 2001 - 2008 Incorporated subsequent
The laundered funds are now integrated
amendments which requires countries
back into the legitimate economy through
to have measures in place to fight
financing of terrorism
 the purchase of properties, businesses
and other investments.
HOW DOES MONEY LAUNDERING LINK TO
OTHER CRIMES
- Directly connected to a criminal
act or illegal activity
- Predicate crimes would have
already taken place
14 PREDICTED CRIMINALS
- Kidnapping for ransom
- Drug Offenses
- Graft and corruption practices
- plunder
- Robbery and extortion
- Jueteng and masiao
- Piracy on the high seas
- Qualified Theft - Swindling 
Smuggling
- Electronic Commerce Crimes
- Hijacking, destructive arson and
murder, including those perpetrated
against noncombatant persons
(terrorist acts)
- Securities Fraud
- Felonies or offenses of a similar
nature punishable under penal laws of
other countries
- Swindling
- Smuggling
WHAT IS ANTI MONEY LAUNDERING
ACT?
- Money Laundering was made a
criminal offense in the Philippines
when the Philippine Congress
approved Republic Act No. 9160,
otherwise known as the Anti-Money
Laundering Act (AMLA) of 2001. It was
later amended in 2003 by Republic
Act No 9194
- AMLA is the legal basis for making
money laundering a criminal offense
in the Philippines, and the money
launderer a criminal upon which
criminal penalties can be imposed
under the AMLA
- Philippines governments response to
the concerns of FATF, to hunting
down and stopping money laundering
whenever it may transpire
WHY IS MONEY LAUNDERING OUTLAWED
- The Money enters the financial
system without being taxed
- The money is the fruit of illegal
activity, therefore an extension of the
same crime
- Forces legitimate business to deal
with inflated, undercut transactions
- Criminal elements become more
comfortable conducting their
activities
- Financial system is manipulated – just
management of national economies is
put in danger
WHAT ARE THE COVERED INSTITUTION
BSP
- Banks, off shore banking unit, quasi-
bank, trust entities, non-stock -savings
and loan associations, including their
subsidiaries and affiliates, as well as
pawnshops, foreign exchangers and
remittance agents
 SEC
- Securities dealers, brokers, pre-need
companies, foreign exchange
corporations, investment houses,
trading advisors and all other entities
dealing in currency, commodities or
other monetary properties
IC
- Insurance companies, insurance
agents, insurance brokers,
professional reinsurers, reinsurance
brokers and holding companies
WHAT ARE THE COVERED TRANSACTION
- A single transaction involving a total
amount in excess of PHP500,000.00
within 1 banking day with a covered
institution (cash)
- This must be reported to the AMLC in
a covered transaction report (CTR)
- For the AMLC To check these are
legitimate transactions
WHAT IS THE SUSPICIOUS TRANSACTION
1. No underlying legal or trade
2. reason or purpose for the transaction –
large transaction for no apparent reasons
3. The individual making the transaction has
no proper identification
4. The amount involved does not correspond
with the expected business or financial
capacity of the individual making the
transaction
5. The transaction is done in a way to avoid
being reported as a covered transaction to the
AMLC – big transaction broken into smaller
ones in the same day What is a suspicious
transaction?
6. The transaction is a major shift from the
usual transaction history of the individual
7. The transaction is in any way related to an
unlawfully activity or a money laundering
offense – must be reported immediately
8. Any transaction that is similar or analogous
to the foregoing
A suspicious transaction report (STR) should
be made if any of these conditions are met
IMPORTANCE BEHIND FIGHTING MONEY
LAUNDERING
- Serious problem
- Criminals will multiply if even small
businesses does not comply
- Small businesses may be held
responsible under AMLA
- Global scale and is not limited to local
context
- For the law to prevail here and abroad
must work hand in hand
HOW TO FIGHT
- Know Your Customer (KYC)
- Maintain strict identification
standards
- Keep clear and accurate records
- Report all covered and suspicious
transactions
International agency that fights money
laundering:
- Financial Action Task Force (FATF)
- The Egmont Group
- The Asia Pacific Group on Money
Laundering
LEGAL CONSEQUENCES PENALTIES AND ITS
RELATED OFFENCES
The AMLA penalizes the following acts or
omissions:
 - Money laundering property – 7-14
years of imprisonment and fine not <
3M but not more than twice the value
of money instrument or property
- Facilitating money laundering – 4 to 7
years and fine not < 1.5M but not
>3M
- Facilitating to report CTR and STR – 6
months to 4 years or a fine not 500K
or both
Other violations punishable under the AMLA:
- Failure to keep records – 6months to 1
yr or a fine not 500K or both
- Malicious reporting - 6 months to 4
years and a fine not 500K or both
- Breach of confidentiality – 3 to 8 yrs
and a fine not 1M
- Administrative violations – fine 100K
to 500K
ANTI MONEY LAUNDERING COUNCIL
- 2001 ALMC was formed upon the
enactment of RA 9160
- with a mandate to prevent the entry
of illegally acquired funds into our
financial system
- AMLC Secretariat implementing arm
of AMLC
FUNCTION OF AMLC
1.to require and receive covered or suspicious
transaction reports from covered institutions.
2.issue orders to determine the true identity
of the owner of any monetary instrument or
property that is the subject of a report, and to
request the assistance to the approve a
foreign country if
3.institute civil forfeiture and all other
remedial proceedings through the Office of
the Solicitor General;
4.to cause the filing of complaints with the
Department of Justice or the Ombudsman for
the prosecution of money laundering
offenses;
5.to investigate suspicious tRansactions and
covered transactions deemed suspicious after
an investigation by AMLC, money laundering
activities, and other violations of the Act;
FUNCTIONS OF AMLC
6.Secure the order of the Court of Appeals to
freeze any monetary instrument or property
alleged to be the proceeds of unlawful activity
7.Implement necessary and justified measures
to counteract money laundering;
8.Receive and act on any requests from
foreign countries for assistance in their own
anti-money laundering operations
9.Develop education programs to make the
public aware of the pernicious effects of
money laundering and how they can
participate in bringing offenders to justice
10.Enlist the assistance of any branch of
government, including intelligence agencies,
for the prevention, detection and
investigation of money laundering offenses
and prosecution of offenders
11.to impose administrative sanctions for the
violation of laws, rules, regulations and orders
and resolutions issued pursuant thereto.
LAWS AND RULES COVERING THE AMLC
- Republic Act No. 9160 - Anti-Money
Laundering Act (AMLA) of 2001
- Republic Act No. 9194 - Amending the
AMLA
- Republic Act No. 10167 -
Strengthening the AMLA
- Republic Act No. 10365 - Further
Strengthening the AMLA
 - Republic Act No. 10927 - Designating
Casinos as Covered Persons under the
AMLA -2016 Revised Implementing
Rules and Regulations of Republic Act
No. 9160, As Amended (2016 RIRR)
- Casino Implementing Rules and
Regulations of Republic Act No. 10927
(CIRR) -Rules on the Imposition of
Administrative Sanction under
Republic Act No. 9160, as Amended –
- A.M. No. 05-11-04-SC Rule of
Procedure in Cases of Civil Forfeiture,
Asset Preservation, and Freezing of
Monetary Instrument, Property, or
Proceeds Representing, Involving, or
Relating to an Unlawful Activity or
Money Laundering Offense under
Republic Act No. 9160, as Amended.
- Republic Act No. 10168 - Terrorism
Financing Prevention and Suppression
Act of 2012
- Implementing Rules and Regulations
of Republic Act No. 1016
SEC. 9. Prevention of Money Laundering;
Customer Identification Requirements and
Record Keeping.
(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 (5) years
from the dates of transactions. With respect
to closed accounts, the records on customer
identification, account files and business
correspondence, shall be preserved and safely
stored for at least five (5) years from the dates
when they were closed.
(c) Reporting of Covered Transactions. —
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 ten
(10) working days.
When reporting covered transactions to the
AMLC, covered institutions and their officers,
employees, representatives, agents, advisors,
consultants or associates shall not be deemed
to have violated Republic Act No. 1405, as
amended; Republic Act No. 6426, as
amended; Republic Act No. 8791 and other
similar laws, but are prohibited from
communicating, directly or indirectly, in any
manner or by any means, to any person 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. However,
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.
BANK SECRECY LAW
On 09 September 1955, Republic Act No.
1405, otherwise known as An Act Prohibiting
Disclosure of or Inquiry into, Deposits with
any Banking Institution (“Bank Secrecy Law”),
was approved. This law was enacted to
encourage individuals to deposit their money
in banks instead of hoarding them.
The Bank Secrecy Law protects all deposits of
whatever nature in banks or banking
institutions in the Philippines as well as
investments in government bond. This law
prohibits any person, subject to the
exceptions below, from disclosing to any
person any information, relative to the funds
or properties belonging to the depositors in
the custody of the bank. Simply put, no one
can just go to your bank and ask for your bank
balance.
However, the rule is not absolute. The
following are the exceptions to the bank
secrecy law:
1. Written permission or consent in
writing by the depositor;
2. In cases of impeachment;
3. Upon order of the court in cases of
bribery or dereliction of duty of public
officials;
4. Upon order of the court in cases where
the money deposited or invested is the
subject matter of the litigation;
5. Upon a subpoena issued by the
Ombudsman concerning an investigation
it is conducting, provided that there must
already be a case pending in court, the
account be clearly identified, the
inspection be limited to the subject
matter of the pending case; and the bank
personnel and the depositor must be
notified to be present during the
inspection;
6. The BIR can inquire into bank deposits
in an application for compromise of tax
liability or determination of a decedent’s
gross estate;
7. The Anti-Money Laundering Council
(“AMLC”) can examine bank accounts
pursuant to a court order, where there is
probable cause that the deposits are
related to an unlawful activity or money
laundering offense;
8. The AMLC can examine bank accounts,
WITHOUT a court order, where there is
probable cause that the deposits are
related to certain crimes such as
kidnapping for ransom, violation of the
Dangerous Drugs Act, hijacking,
destructive arson, murder and violations
of RA 6235 (acts inimical to civil aviation);
9. The Bangko Sentral can examine bank
accounts in the course of its periodic or
special examination regarding compliance
with Anti-Money Laundering Law.
REPUBLIC ACT No. 1405
AN ACT PROHIBITING DISCLOSURE OF OR
INQUIRY INTO, DEPOSITS WITH ANY
BANKING INSTITUTION AND PROVIDING
PENALTY THEREFOR.
Section 1. It is hereby declared to be the
policy of the Government to give
encouragement to the people to deposit
their money in banking institutions and to
discourage private hoarding so that the
same may be properly utilized by banks in
authorized loans to assist in the economic
development of the country.
Section 5. Any violation of this law will
subject offender upon conviction, to an
imprisonment of not more than five years
or a fine of not more than twenty
thousand pesos or both, in the discretion
of the court.

Section 6. This Act shall take effect upon

Section 2. 1 All deposits of whatever
nature with banks or banking institutions its approval.
in the Philippines including investments in
bonds issued by the Government of the
Philippines, its political subdivisions and
its instrumentalities, are hereby
considered as of an absolutely
confidential nature and may not be
examined, inquired or looked into by any
person, government official, bureau or
office, except upon written permission of
the depositor, or in cases of
impeachment, or upon order of a
competent court in cases of bribery or
dereliction of duty of public officials, or in
cases where the money deposited or
invested is the subject matter of the
litigation.

Section 3. It shall be unlawful for any

official or employee of a banking
institution to disclose to any person other
than those mentioned in Section two
hereof any information concerning said
deposits.

Section 4. All Acts or parts of Acts, Special

Charters, Executive Orders, Rules and
Regulations which are inconsistent with
the provisions of this Act are hereby
repealed.