BRIEFING ON THE

ANTI-MONEY
LAUNDERING LAW
 What is money laundering?
 RA 9160 (Anti-Money Laundering Act of
2001 [AMLA])
 Sec. 4: Money laundering is a CRIME

whereby the proceeds of an unlawful

activity as herein defined are
TRANSACTED, thereby making them
appear to have originated from legitimate
sources
Elements of the Crime of Money
Laundering
 Unlawful activity
 Monetary instrument or property (MI/P)
 Transaction/Attempted transaction
 Knowledge that the MI/P represents,
involves, or relates to the proceeds of the
unlawful activity
Elements of the Crime of Money
Laundering
UNLAWFUL ACTIVITY [Sec. 3(i) of AMLA]

 Kidnapping for ransom

 Comprehensive Dangerous Drugs Act of 2002
 Anti-Graft and Corrupt Practices Act
 Plunder
 Robbery and Extortion
 Jueteng and Masiao
Elements of the Crime of Money
Laundering
UNLAWFUL ACTIVITY [Sec. 3(i) of AMLA]

 Piracy on high seas and Phil. waters

 Qualified theft
 Swindling under Art. 315 of RPC
 Smuggling
 Electronic Commerce Act of 2000
Elements of the Crime of Money
Laundering
UNLAWFUL ACTIVITY [Sec. 3(i) of AMLA]

 Hijacking; Destructive Arson and murder,

including those perpetrated by terrorists
against non-combatant persons and other
targets
- International Islamic Relief Organization (IIRO)
- IIRO (Philippines)
Elements of the Crime of Money
Laundering
UNLAWFUL ACTIVITY [Sec. 3(i) of AMLA]

 Securities Regulation Code of 2000

 Felonies or offenses of a similar nature that
are punishable under the penal laws of other
countries
 Elements of the Crime of
Money Laundering
a. Monetary Instruments [Sec.3(c) AMLA;
Rule 3.c. RIRR]
1. coins or currency of legal tender of the
Phils. or any other country
2. drafts, checks and notes
3. securities and negotiable
instruments, bonds, commercial papers
4. deposit certificates, trust certificates
Elements of the Crime of Money
Laundering
5. custodial receipts or deposit substitute
inst.
6. trading orders, transaction tickets
7. confirmation of sale or investments
8. money market instruments,
9. other similar instruments where title
thereto passes to another by
endorsement, assignment or delivery
- E-Money defined in BSP Circular No.
649
Elements of the Crime of Money
Laundering
a. Globe G-Cash
b. Smart Cash
c. Bank issued cash and stored value
prepaid cards (e.g. Visa prepaid
card issued by Unionbank)
10. Insurance contracts, and contract of
suretyship
Elements of the Crime of Money
Laundering
b. Property – as defined under the
Civil Code
Art. 414. All things which are or may be
the object of appropriation are
considered either:
(1) immovable or real property; or
(2) movable or personal property.
Elements of the Crime of Money
Laundering

Transaction [Sec. 3 (h) of AMLA]

 refers to any act establishing any right or
obligation or giving rise to any contractual
or legal relationship between the parties
thereto. It also includes any movement of
funds by any means with a covered
institution.
Elements of the Crime of Money
Laundering
Transaction includes:
• Cash and check deposits
• Over-the-counter withdrawals or check
encashment
• opening of deposit accounts
• Loan applications/loan payments
• Sale of foreclosed properties or acquired assets
• Issuance of credit cards, etc.
 Elements of the Crime of Money
Laundering
Transaction includes: (Cont’n)

• Trust related transactions

• Remittance and receipt of remittance
• Foreign currency exchange
• Pawning and redemption of pawned property
 Elements of the Crime of Money
Laundering

Knowledge (Rule 6.5 of the RIRR)

Knowledge may be established by direct
evidence or inferred from the attendant
circumstances
Why is money laundering a problem?

 Money laundering allows criminals to

preserve and enjoy the proceeds of
their crimes, thus providing them with
the incentives and the means to
continue their illegal activities.
 How is money laundering
carried out?/Stages of ML
 Placement
• Proceeds placed in financial
institutions
 Layering
• Further distancing proceeds from
their origin
 Integration
• Funds re-enter legitimate circulation
 Stages
1. Placement – involves the initial
placement or introduction of the
illegal funds into the financial
system.
Ex. a. Smurfing or structuring
b. Purchase of insurance contract
 Stages
2. Layering – involves a series of financial
transactions during which the dirty money is
passed through a series of procedures,
putting layer upon layer of persons and
financial activities into the laundering
process.
Ex. a. electronic transfer of funds
b. disguised transfer of funds as
payment for goods or services
 Stages
3. Integration – the money is once again
made available to the criminal with the
occupational and geographic origin
obscured or concealed. The laundered
funds are now integrated back into the
legitimate economy through the purchase
of properties, businesses and other
investments.
Stages
REPUBLIC ACT NO. 9160
otherwise known as
THE “ANTI-MONEY
LAUNDERING ACT OF
2001”
as amended by
REPUBLIC ACT NO. 9194
 FINANCIAL ACTION TASK
FORCE (FATF)
R.A. 9160, otherwise known as the “ANTI-
MONEY LAUNDERING ACT OF 2001”
(AMLA), as amended, came into being as
a result of the creation of the FATF.
 FATF

 Formed in 1989
 Based in Paris, France
 An international body formed by G-7 with a
mission of paving the way for the effective
prevention and detection of money
laundering by ensuring that appropriate
measures against money laundering are
implemented in all nations
 FATF
 In 1990, FATF prepared a set of
recommendations which provides a
comprehensive plan of action needed to fight
money laundering. It provides a complete set of
counter-measures against money laundering
covering:
1. Criminal justice system and law
enforcement,
2. Financial system and its regulation, and
3. International cooperation.
 FATF
1990 - FATF issued 40 Recommendations

2001 - FATF issued 8 Special Recommendations

which requires countries to have measures in
place to fight financing of terrorism
(Recommendation VIII – Calls for the review of
adequacy of laws and regulations on NPOs)

2004 - FATF Added Recommendation No. 9

(Cash Couriers)
 FATF
8 Special Recommendations
Recommendation VII-Countries should review the adequacy
of laws and regulations that relate to entities that can be
abused for the financing of terrorism. Non profit
organizations are particularly vulnerable, and countries
should ensure that they cannot be misused:
(i) by terrorist organizations posing as legitimate
entities;
(ii) to exploit legitimate entities as conduits for
terrorist financing; and
(iii) to conceal the clandestine diversion of funds
intended for legitimate purpose to terrorist organizations.
 FATF
 To enforce compliance with the
recommendations, it created and
maintained a list of Non Cooperative
Countries and Territories (NCCT List)

 Countries under the list are subject to

sanctions.
 FATF
 In June 2000, the FATF placed the Philippines in
its list of Non-Cooperative Countries and
Territories (NCCT) for the following reasons:
1. It has no existing anti-money laundering
law.
2. It has no financial intelligence unit.
3. The Philippines has a very strict bank
deposit secrecy law.
4. Its banks and other covered institutions do
not report suspicious transactions.
 AMLA
Effectivity Dates

• R.A. No. 9160 - October 17, 2001

• R.A. No. 9194 - March 23, 2003

• Revised IRRs - September 7, 2003

 FATF
 Withthe enactment of the AMLA and its
amendments by R.A. 9194, the Philippines
was removed from the NCCT List, and no
longer subject to FATF monitoring since,
February 11, 2005.
 Covered Institutions
[Sec. 3 (a) AMLA]
1. Banks, non-banks, quasi-banks, trust
entities, and all other institutions and
their subsidiaries and affiliates
supervised or regulated by the Bangko
Sentral ng Pilipinas;

2. Insurance Companies and all other

institutions supervised or regulated by
the Insurance Commission; and
 Covered Institutions
[Sec. 3 (a) AMLA]
3. All those supervised or regulated by the
Securities and Exchange Commission
as grantees of secondary license, such
as:
i. securities dealers, brokers, salesmen,
investment houses; and
ii. Mutual funds, closed end investment
companies, common trust funds, pre-
need companies, investment houses.
AMLA’s 3 Major Requirements for
Compliance by Banks and other
Covered Institutions
1. Reporting of covered and suspicious
transactions
2. Customer identification and due
diligence or Know Your Customer
(KYC)
3. Record-keeping
 Reporting of Covered and
Suspicious Transactions
[Sec. 8(c)AMLA]

All covered institutions shall report to

the AMLC all covered transactions
and suspicious transactions
 Covered Transaction
[Sec. 3(b) AMLA]

‘Covered transaction’ is a transaction

in cash or other equivalent
monetary instrument involving a
total amount in excess of Five
Hundred Thousand Pesos
(Php500,000.00) within one (1)
banking day.
 Covered Transaction
[Sec. 3(b) AMLA]
- It is a single transaction in excess of
P500,000.00 within one banking day.
- Therefore, multiple transactions or series
of transactions with an amount not more
than P500,000.00 each, but whose total
amount exceeds the threshold amount,
are not reportable as “Covered
Transaction.”
 Suspicious transactions
[Sec. 3(b-1) AMLA]
are transactions with covered institutions,
regardless of the amounts involved, where any
of the following circumstances exist:
1. Client is not properly identified;
2. There is no underlying legal or trade
obligation, purpose or economic justification
for the transaction;
3. The amount involved is not commensurate
with the business or financial capacity of the
client;
Suspicious transactions (con’t.):
[Sec. 3(b-1) AMLA]

4. The transaction is structured in a manner that

invites suspicion that it is trying to avoid the
reporting requirements under the AMLA;
5. Any circumstance relating to the transaction
which is observed to deviate from the client’s past
transactions;
6. The transaction is in any way related to an
unlawful activity under the AMLA; and
7. Any transaction that is similar or analogous to any
of the foregoing.
 AMLC Resolution No. 59

 Suspicious transaction indicators:

1. Transactions of individuals or entities that are affiliated to

people suspected of being connected to a terrorist group
or a group that advocates violent overthrow of a
government

2. The NGO does not appear to have expenses normally

related to relief or humanitarian efforts
 AMLC Resolution No. 59
(cont’d)

3. The absence of contributions from donors located within

the country of origin of the NGO

4. A mismatch between the pattern and size of financial

transactions on the one hand and the stated purpose and
activity of the NGO on the other

5. Incongruities between apparent sources and amount of

funds raised or moved by the NGO
 Period of Reporting of Covered and
Suspicious Transactions
[Sec. 8(c)AMLA]

Should a transaction be determined to be both

a covered transaction and a suspicious
transaction, the covered institution shall be
required to report the same as a suspicious
transaction
 Customer Identification and Due
Diligence/Know your Customer
(CDD/KYC)
1. Establishing and recording the true identity of
clients based on official documents,

2. Maintaining a system of verifying the true

identity of clients.
- In case of corporate clients, the system must include
a process of verifying their legal existence,
organizational structure and authority of the person
purporting to act in their behalf.
 CDD/KYC
Establishing and recording the true
identity
-Involves:

1. Requiring a client to produce at least one (1) valid

original photo bearing official document of identity (ID)
issued by an official authority.

2. Recording the ID of the client.

 CDD/KYC
Establishing and recording the true
identity

What does “Official Document of Identity“ mean?

-Document of identity that is issued by an official

authority

What does “Official Authority” mean?

 CDD/KYC
Establishing and recording the true
identity
“Official Authority” refers to any of the following:

1. Government of the Republic of the Philippines;

2. Its political subdivisions and instrumentalities;
3. Government-owned and/or controlled corporations
(GOCCs); and
4. Private entities or institutions registered with or
supervised or regulated either by the BSP or SEC or
IC.
 CDD/KYC
Establishing and recording the true
identity
Valid IDs:
 Passport

 Driver’s license

 Professional Regulations Commission (PRC) ID

 National Bureau of Investigation (NBI) clearance

 Police clearance

 Postal ID

 Voter’s ID

 Barangay certification

 Government Service and Insurance System (GSIS) e-

Card
 CDD/KYC
Establishing and recording the true
identity
Valid IDs:
 Certification from the National Council for the Welfare

of Disabled Persons (NCWDP)

 Department of Social Welfare and Development
(DSWD) Certification
 Company issued by private entities or institutions

registered with or supervised or regulated either

by the BSP, SEC or IC
 Integrated Bar of the Philippines ID
 CDD/KYC
Establishing and recording the true
identity
Valid IDs:
 Social Security System (SSS) card

 Senior Citizen Card

 Overseas Workers Welfare Administration (OWWA)

ID
 OFW ID

 Seaman’s Book

 Alien Certification of Registration/Immigrant

Certificate of Registration
 Government Office and GOCC ID e.g. Armed Forces

of the Philippines (AFP), Home Development Mutual

Fund (HDMF)
 CDD/KYC
Establishing and recording the true
identity
Valid IDs:
 Passports issued by foreign governments

 For purpose of remittance to students who are not yet of

voting age, photo-bearing school ID duly signed by
the principal of head of the school
 CDD/KYC
under the Revised Implementing Rules &
Regulations (RIRR)
Minimum information required:
 Name
 Present address
 Permanent address
 Date and place of birth
 Nationality
 Nature of work and name of employer or nature of self-
employment/business
 CDD/KYC
under the RIRR
Minimum Information Required: (cont.)
 Contact numbers
 TIN, SSS No., GSIS No.
 Specimen signature
 Source of fund(s), and
 Names of beneficiaries in case of insurance contracts
and whenever applicable.
 CDD/KYC
under the RIRR
(for juridical persons)

Covered institutions shall endeavor to ensure that a:

1. corporate juridical entity has not been or is not
being dissolved, wound up or voided.
2. its business or operations has not been or is not
being closed, shut down, phased out, or
terminated.
3. Shell companies should be dealt with extreme
caution.
 CDD/KYC
under the RIRR
(for juridical persons)

Minimum information/documents:
• Articles of Incorporation/Partnership
• By-laws
• Official address/principal business address
• List of directors/partners
• List of principal stockholders owning at least 2% of
the capital stock
 CDD/KYC
under the RIRR
(for juridical persons)

Minimum information/documents: (cont.)

• Contact numbers
• Beneficial owners, if any; and
• Verification of the authority and identification of the
person purporting to act on behalf of the client.
 RECORD-KEEPING
REQUIREMENTS
All covered institutions shall:
 maintain and safely store all records of all their
transactions for 5 years from the transaction dates.
 anent closed accounts, preserve and safely store the
records on customer identification, account files
and business correspondence for at least 5 years from
closure dates.
 if a money laundering case based on any record kept by
the covered institution has been filed in court, retain said
file until it is confirmed that the case has been finally
resolved or terminated by the court.
 Money Laundering
Offenses/Penalties
1. Knowingly transacting or attempting to
transact any monetary instrument or
property which represents, involves or
relates to the proceeds of any unlawful
activity (The money launderer himself)

Penalty
7 to 14 years imprisonment and a fine of not less
than P 3 Million but not more than twice the value
of the monetary instrument or property.
 Money Laundering
Offenses / Penalties
2 Knowingly performing or failing to perform an
act in relation to any monetary instrument or
property involving the proceeds of any
unlawful activity as a result of which he
facilitated the offense of money laundering
(The person who assists the money launderer)
(Crim. Case No. 127802, “PP vs. Eric Allagadan” – first money laundering
conviction )

Penalty
4 to 7 years imprisonment and a fine of not less than
P1.5 Million but not more than P3 Million.
 Money Laundering
Offenses/Penalties
3. Knowingly failing to disclose and file with the
AMLC any monetary instrument or property
required to be disclosed and filed –

Penalty
6 months to 4 years imprisonment or a fine of
not less than P100,000.00 but not more than
P500,000.00, or both.
 Other Offenses under R.A.
9160, as amended
1.For failure to keep records –
All records of all transactions of covered institutions
shall be maintained and safely stored for five (5)
years from the dates of transactions/when they
were closed.
Penalty
6 months to 1 year imprisonment or a fine of not
less than P100,000.00 but not more than
P500,000.00, or both.
Other Offenses under R.A. 9160,
as amended
2.For malicious reporting –
Any person who reports or files a completely
unwarranted or false information relative to
money laundering transaction against any
person shall be held criminally liable.
Penalty
6 months to 4 years imprisonment and a fine of
not less than P100,000.00 but not more than
P500,000.00; provided that the offender is not
entitled to the benefits of the Probation Law. (Sec. 14
(c), AMLA)
 No administrative, criminal or civil
proceedings, shall lie against any person
for having made a covered or suspicious
transaction report in the regular
performance of his duties in good
faith, whether or not such reporting
results in any criminal prosecution under
this Act or any other law.
 Other Offenses under R.A.
9160, as amended
Safe Harbor Provision
 When reporting covered or suspicious
transactions to the AMLC, covered
institutions and their officers and
employees 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. (Sec. 9,
AMLA)
 Other offenses under R.A.
9160, as amended

3.For breach of confidentiality

When reporting covered or suspicious
transactions to the AMLC, covered institutions
and their officers and employees are
prohibited from communicating directly
or indirectly, in any manner or by any
means, to any person or entity, the media,
the fact that a covered or suspicious
transaction report was made, the contents
thereof, or any other information in relation
thereto.
 Penalty

3 to 8 years imprisonment and a fine of not

less than P500,000.00 but not more than
P1.0 Million.
 Confidentiality Provision of the RIRR

 Rule 8.4. Confidentiality Provision-The

members of the AMLC, xxx and all
members of the Secretariat, shall not
reveal , in any manner, any information
known to them by reason of their office.
This provision shall apply even after their
separation from the AMLC. Violation is
punished in accordance with the provision
of the Central Bank Act.
ADMINISTRATIVE OFFENSES
AND SANCTION

 Rule 14.1.d of Revised Implementing Rules

and Regulations
 Violations of AMLA, rules, issuances, order,
resolutions, regulations
 Not less than P100,000.00 but not exceeding
P500,000.00
 Prosecution of Money
Laundering Cases
 Any person may be charged with and convicted
of both the offense of money laundering (subject
offense) and the unlawful activity (predicate
offense)

 Any proceeding relating to the unlawful activity

shall be given precedence over the prosecution
of any offense or violation under R.A. No. 9160
without prejudice to the freezing and other legal
remedies.
 Prosecution of Money
Laundering Cases
Rule 6.6. further provides that “All the
elements of every money laundering
offense under Section 4 of the AMLA must
be proved by evidence beyond reasonable
doubt, including the element of knowledge
that the monetary instrument or property
represents, involves or relates to the
proceeds of any unlawful activity.”
 Prosecution of Money
Laundering Cases
Rule 6.7 clearly states that “No element of the
unlawful activity, however, including the
identity of the perpetrators and the details of
the actual commission of the unlawful activity
need be established by proof beyond
reasonable doubt. The elements of the
offense of money laundering are separate and
distinct from the elements of the felony or
offense constituting the unlawful activity.”
 THE ANTI-MONEY
LAUNDERING COUNCIL
OF THE PHILIPPINES
(AMLC)

The Philippines’ Financial Intelligence Unit

 INSURANCE BSP SEC
COMMISSIONER GOVERNOR CHAIRMAN

SECRETARIAT

Executive
Director

Information Administrative
Compliance
Legal Management And
And
Evaluation And Financial
Investigation
Analysis Services
 AMLC
 Actsunanimously in the discharge of their
functions
 Secretariat
 Members of the Secretariat hold full time
permanent position within the BSP (Sec.
8, AMLA)
 Members of the Secretariat are regular
employees of the BSP (Rule 8.2., RIRR)
Functions of the AMLC
(1) to require submission of and
receive covered or suspicious
transaction reports from covered
institutions (Sections 7[1] & 9[c].
 Functions of the AMLC
(2) to issue orders to the appropriate
Supervising Authority or the covered
institution to determine the true
identity of the owner of any monetary
instrument or property subject of a
CTR or STR or request for assistance
from a foreign state, or believed by the
Council on substantial evidence to be
related to an unlawful activity. [Sec.
7(2) AMLA]
 Functions of the AMLC
(3) institute civil forfeiture proceedings
and all other remedial proceedings
through the Office of the Solicitor
General.
-G.R. No. 170281, “R.P. vs. Glasgow
Credit and Collection Services, Inc., et
al.
 Functions of the AMLC
(4) cause the filing of complaints with the
Department of Justice or the Ombudsman
for the prosecution of money laundering
offenses.
Functions of the AMLC
(5) investigate suspicious transactions
and covered transactions deemed
suspicious after an investigation by
AMLC, money laundering activities,
and other violations of this Act.
 AMLC Authority to Inquire
(Sec. 11)
 To inquire into or examine any particular deposits or
investments upon order of a competent court, except in
cases where the unlawful activity involves kidnapping
for ransom, drug-related cases and terrorist related
cases.
AMLC Resolution Court Order

KFR the rest of the

Drugs-related predicate crimes
Terrorist-related under Sec. 3 (i)

-G.R. No. 174629, “RP vs. Hon. Antonio Eugenio, et al.”

 Functions of the AMLC
(6) To apply before the Court of
Appeals, ex parte, for the freezing of
any monetary instrument or property
alleged to be the proceeds of any
unlawful activity as defined in Section
3(i) hereof.
- The freeze order issued is effective
for a period of 20 days and extendible
for a period not exceeding 6 months.
Freezing of Monetary
Instrument or Property
 The Court of Appeals, upon application ex parte
by the AMLC and after determination 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)
hereof, may issue a freeze order which shall be
effective immediately. The freeze order shall be
for a period of twenty (20) days unless
extended by the court.
 G.R. No. 165800, “Maj. Gen. Garcia vs. RP,
represented by the AMLC”
 Extension of the Freeze
Order
 Before the 20 day effectivity period of the freeze
order issued by the CA expires, the AMLC may
apply in the same court for an extension not
exceeding a period of six (6) months.

 During the effectivity of the freeze order, the

AMLC may avail itself of other legal remedies,
such as inquiry, civil forfeiture and/or the filing of
money laundering case/s.
 What can be frozen?
• Monetary instrument
• Property
• Related Web of Accounts – Rule 10.4
“Related web of accounts - those 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.
 Duty of Respondent, Covered
Institution or Government Agency
Upon Receipt of Freeze Order
 Immediately desist from and not allow
any transaction, withdrawal, deposit,
transfer, removal, conversion, other
movement or concealment of the account
representing, involving or relating to the
subject monetary instrument, property,
proceeds or its related web of accounts.
 Functions of the AMLC
(11) to impose administrative sanctions
for the violation of laws, rules,
regulations and orders and resolutions
issued pursuant thereto.
 Functions of the AMLC
(7) to implement such measures as may
be necessary and justified under this Act
to counteract money laundering.

(8) to receive and take action in

respect of, any request from foreign
states for assistance in their own anti-
money laundering operations provided in
this Act.
 Functions of the AMLC
(9) to 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.
 Functions of the AMLC
(10) to 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.
 HOW TO REQUEST
ASSISTANCE/REFER CASE TO
AMLC?
 HOW TO REQUEST
ASSISTANCE/REFER CASE TO AMLC?

 AML Desks
 email to vaquino@bsp.gov.ph
 Call (02) 523-44-21/Fax (02) 524-60-85
 Referral Letter (please state case
circumstances/details)
 Prevent fishing expedition

 Drop by 5
th Flr, EDPC Bldg., BSP Complex, Roxas
Blvd., Malate, Manila
 Thank you!

Rommel D. Trijo
Legal Officer III
Legal and Services Group
Anti-Money Laundering Council Secretariat