Anti-Money Laundering Act

Brief History
• Republic Act No. 9160 otherwise known as The
Anti-Money Laundering Act of 2001 was signed
into law on September 29, 2001 and took effect
on October 17, 2001. The implementing Rules
and Regulations took effect on April 2, 2002. On
March 7, 2003, R.A. No. 9194 (An Act Amending
R.A. No. 9160) was signed into law and took
effect on March 23, 2003. The revised
Implementing Rules and Regulations took effect
on September 7, 2003.
 Salient Features
• Criminalizes money laundering
• Creates a financial intelligence unit
• Imposes requirements on customer
identification, record keeping and reporting of
covered and suspicious transactions
• Relaxes strict bank deposits secrecy laws
• Provides for bank inquiry and freeze ex parte
petition/seizure/forfeiture/recovery of dirty
money/property
• Provides for international cooperation
 Policy of the Law – Sec. 2
• To protect and preserve the integrity and
confidentiality of bank accounts and
• To ensure that the Philippines shall not
be used as a money laundering site for
proceeds of unlawful activity.
• Cooperate with transnational
investigations and prosecutions of
persons involved.
 Covered Institutions – Sec. 3 (a)
• Institutions supervised and regulated:
• By the BSP (banks, offshore banking units, quasi
banks, trust entities, non-stock savings and loan
associations, pawnshops, etc.)
• By the Insurance Commission (insurance
companies, holding companies, etc.)
• By the SEC (securities dealers, brokers, pre-need
companies, investment houses, foreign exchange
corporations, etc.)
Obligations of Covered Institutions – Sec. 9
• Customer Identification
– True identity of clients based on official
records.
• Record Keeping
– For 5 years from the date of transaction or
date the account was closed.
• Reporting
– All covered transactions within 5 working days
from occurrence, unless the supervising
authority prescribes a longer period of not
exceeding 10 days.
 Covered Transactions - Sec. 3 (b)

• Transaction in cash or other equivalent

monetary instruments involving a total
amount in excess of P500,000.00 within
one business day.
• Transaction exceeding P 1M in cases of
jewelry dealers, dealer in precious
metals and dealers in precious stones
 Suspicious Transactions – Sec. 3 (b-1)
• Regardless of the amounts involved, wherein:
– there is no underlying legal/trade obligation, purpose or
economic justification; the client is not properly identified;
– the amount involved is not commensurate with the
business or financial capacity of the client;
– the transaction is structured to avoid being the subject of
reporting requirements under the AMLA;
– there is a deviation from the client’s profile/past
transactions;
– the transaction is related to an unlawful activity/offense
under the AMLA;
– and transactions similar or analogous to the above.
 When Money Laundering is
Committed – Sec. 4
• Money Laundering is an act or series or
combination of acts whereby proceeds
of an unlawful activity whether in cash,
property or other assets, are converted,
concealed or disguised to make them
appear to have originated from
legitimate sources.
 When Money Laundering is
Committed – Sec. 4
• By any person who knowing that the
monetary instrument or property involves or
relates to proceeds of an unlawful activity:
– Transacts or attempts to transact the same.
– Performs or fails to perform an act as a
result of which he facilitates the offense.
– Fails to disclose or file with AMLC.
 Unlawful Activities or Predicate Crimes
– Sec. 3 (i)
• Swindling
• Smuggling
• Electronic commerce crimes
• Hijacking, destructive arson and murder,
including those perpetrated against non-
combatant persons
• Securities fraud
• Felonies or offenses of similar nature
punishable under penal laws of other
countries
 Unlawful Activities or Predicate Crimes
– Sec. 3 (i)
• Kidnapping for ransom
• Drug offenses
• Graft and corrupt practices
• Plunder
• Robbery and extortion
• Jueteng and masiao
• Piracy on the high seas
• Qualified theft
 AMLC - Sec. 7

• Anti-Money Laundering Council

• Financial Intelligence Unit of the Philippines,
tasked to implement the AMLA.
• Composition:
– Governor of the BSP – Chairman
– Commissioner of the Insurance Commission –
Member
– Chairman of the SEC - Member
 Jurisdiction
• Regional Trial Court
– Committed by private individuals and public
officer not covered by the jurisdiction of the
Sandiganbayan
• Sandiganbayan
– Committed by public officers under its
jurisdiction, and private persons who are in
conspiracy with such public officers.
 Prosecution
• Independent Proceedings: money laundering
and unlawful activity, may be convicted of
both.
• Separate and distinct elements for money
laundering and unlawful activity .
• Element of knowledge may be established by
direct or circumstantial evidence.
• Rules of Court shall govern all proceedings.
 Freezing of Monetary Instrument or Property
– Sec. 10
• Upon verified ex parte petition by the AMLC.
• After determination of probable cause that
any monetary instrument or property is in any
way related to the unlawful activity defined
in the act.
• Court of Appeals issues the freeze order
which is effective immediately.
• For a period of 20 days unless extended.
 Freezing of Monetary Instrument or Property
– Sec. 10
• Court shall act on the petition within 24 hours
from the filing.
• Remedy: Motion to lift the freeze order.
• Court should resolve the same before the
expiration of the 20 day original freeze order.
• Republic v. Eugenio, 545 SCRA 384 (2008)
 Freeze Order: Remedy
• File a motion to lift the freeze order
• Court should resolve the motion before
the expiration of the freeze order
• No TRO or Injunction shall issue except
from the Supreme Court
 Authority to Inquire into Bank Deposits
– Sec. 11
• Court of Appeals, within 24 hours from filing of
the application.
• Upon order of any competent court in cases of
violations of the Act based on an ex parte
application.
• AMLC may inquire into or examine.
• Probable Cause that the deposits or investments
are related to an unlawful activity as defined in
the act.
• Inquiry can extend into related accounts.
 Authority to Inquire into Bank Deposits
– Sec. 11
• However, no court order is required in the
following unlawful activities:
– Kidnapping for ransom (RPC)
– Violations of the Comprehensive Dangerous Drugs Act
of 2002 (RA 9165)
– Hijacking and other violations under RA 6235 : An Act
Prohibiting Certain Acts Inimical to Civil Aviation, and
for Other Purposes
– Destructive arson and murder including those
perpetrated by terrorists against non-combatant
persons and similar targets.
 Penalties – Sec. 14
• (a) Penalties for the Crime of Money
Laundering.
– Transacts or attempts to transact the same.
– The penalty of imprisonment ranging from
seven (7) to fourteen (14) years and a fine
of not less than Three million Philippine
pesos (Php 3,000,000.00) but not more
than twice the value of the monetary
instrument or property involved in the
offense.
 Penalties – Sec. 14
• Performs or fails to perform an act as a result
of which he facilitates the offense.
• The penalty of imprisonment from four (4) to
seven (7) years and a fine of not less than
One million five hundred thousand Philippine
pesos (Php 1,500,000.00) but not more than
Three million Philippine pesos (Php
3,000,000.00).
 Penalties – Sec. 14
• Fails to disclose or file with AMLC
• The penalty of imprisonment from six (6)
months to four (4) years or a fine of not less
than One hundred thousand Philippine pesos
(Php 100,000.00) but not more than Five
hundred thousand Philippine pesos (Php
500,000.00), or both.
• (b) Penalties for Failure to Keep Records. The
penalty of imprisonment from six (6) months
to one (1) year or a fine of not less than One
hundred thousand Philippine pesos (Php
100,000.00) but not more than Five hundred
thousand Philippine pesos (Php 500,000.00),
or both.
• (c) Malicious Reporting. Any person who, with
malice, or in bad faith, report or files a
completely unwarranted or false information
relative to money laundering transaction
against any person shall be subject to a
penalty of six (6) months to four (4) years
imprisonment and a fine of not less than One
hundred thousand Philippine pesos (Php
100,000.00) but not more than Five hundred
thousand Philippine pesos (Php 500,000.00),
at the discretion of the court: Provided, That
the offender is not entitled to avail the
benefits of the Probation Law.
• If the offender is a juridical person:
– the penalty shall be imposed upon the responsible
officers, as the case may be, who participated in the
commission of the crime or who shall have knowingly
permitted or failed to prevent its commission.
– The court may suspend or revoke its license.
• If the offender is an alien, he shall, in addition to the penalties
herein prescribed, be deported without further proceedings
after serving the penalties herein prescribed.
• If the offender is a public official or employee, he shall, in
addition to the penalties prescribed herein, suffer perpetual
or temporary absolute disqualification from office, as the case
may be;
• Any public official or employee who is called upon to
testify and refuses to do the same or purposely fails to
testify shall suffer the same penalties prescribed herein.
• (d) Breach of Confidentiality.
–The punishment of imprisonment
ranging from three (3) to eight (8)
years and a fine of not less than Five
hundred thousand Philippine pesos
(Php 500,000.00) but not more than
One million Philippine pesos (Php
1,000,000.00).
 Forfeiture – Sec. 12, Rules on Civil Forfeiture
(SC Circular A.M. No. 05-11-04-SC)

• (a) Civil Forfeiture

• (b) Claim on Forfeited Assets
• (c) Payment in Lieu of Forfeiture
 Republic v. Glasgow Credit and Collection Services, Inc.,
542 SCRA 95 (2008)

• Civil Forfeiture - filed in any RTC of the judicial region where

the monetary instrument, property or proceeds
representing, involving, or relating to an unlawful activity or
to a monetary laundering offense are located.
- Under two conditions:
1. when there is a suspicious transaction report or a covered
transaction report deemed suspicious after investigation by
the AMLC; and
2. the court has, in a petition filed for the purpose, ordered
the seizure of any monetary instrument or property, in
whole or in part, directly or indirectly, related to said report.