4 Amla

The Anti-Money Laundering Act (AMLA)
and amendments
A classic case of money laundering
 Jose is the head of an international narcotics trafficking and money laundering

syndicate.
Criminal activities
 Criminal organization distributes over 7,500
kilograms of shabu in China and the Philippines.
 In the process launders of over $5,000,000
(narcotics proceeds) in Macau and Makati by
buying high-end real estate, luxury and exotic
automobiles and other high-end items.
 Bribery of govt officials
Proceeds from drugs trafficking are laundered

by
 Smuggling them into Macau and Makati
by couriers
 wire transferring them to Hong Kong or
Singapore
 Depositing them to the account of corporations
that operates exotic car dealerships, stores that
sells luxury items and chains of high-end
restaurants, all of which are owned by him or
his organizations.
Classic case of money laundering
Classic Definition of Money
Laundering
 a term used to describe a scheme in which criminals try to disguise the identity,
original ownership, and destination of money that they have obtained through
criminal conduct.
 Legitimization of illegally obtained money to hide its true nature or source.
 effected by passing it surreptitiously through legitimate business channels by
means of bank deposits, investments, or transfers from one place (or person) to
another.
 done with the intention of making it seem that the proceeds have come from a
legitimate source.
Philippines Legal and Regulatory Framework
for dealing with Jose’s case
Pre AMLA or R.A. No. 9160 (before 2001)
 Before the enactment of R.A. No. 9160

 Jose can be charged with violation of Dangerous Drugs Act but not for money
laundering.
 Bank officials who helped him transfer the proceeds of illegal drugs transaction may be held
administratively but not criminally liable.
 Investigation on Jose’s financial transactions is left with ordinary law enforcement agencies which
has no specialized investigative powers and remedies (eg freeze
order)
 constrained by our strict bank secrecy laws (no bank inquiry order)
 No clear mechanism for enlisting the assistance of law enforcement agencies of Hong Kong,
Macau or Singapore.
 The only way to recover the proceeds of his illegal act is through criminal forfeiture;
no civil forfeiture proceedings.
Pre AMLA or R.A. No. 9160 (before 2001)
Article 25. Penalties which may be imposed. -
The penalties which may be imposed
according to this Code, and
Before the enthaein
cirm dief netreonfRt .cAla.Nssoe.s,9a1r6e0those

tthe following: x x x
included
 Jose can b e cha rged with violation of Dangerous Drugs Act but not for money laundering.
•x x x

Bank offici•alsfowrfheoituhreelpoer dcohnimfisctraatniosfnerotfhinesptruromceenetdasnodfillegal drugs transaction may
be held administrativperlyocbeuet dnos tocf rtihmeinoafflelynslieable.
 The only way to recover the proceeds of his illegal act is through criminal forfeiture; no civil forfeiture
proceedings.
 Investigation on Jose’s financial transactions is left with ordinary law enforcement agencies
which has no specialized investigative powers and remedies (eg freeze order)
 No clear mechanism for enlisting the assistance of law enforcement agencies of Hong Kong, Macau or
Singapore.
Pclere45.CRo.nAsfic.atNoinoan.d9fo1rfe6uti 0re o(fphtereproc2e 0d0s
Arti
o r1 ) instruments of the crime. - Every penalty imposed for the

was committed.
 Before thecommission
enactment of a of
felony
R.A.shall
No.carry
9160 with it the forfeiture of the proceeds of
the crime
Such and the
proceeds andinstruments or tools
instruments withshall
or tools which
be it
confiscated and
 Jose c a n b e ch a rg e d w it h vi o la t i o n o f D a g e ro u s Dr u gs A c t b u t no t for money
of rf e eti d ni af v o r of ht e G o v e r n m e n t , un el s ht e y b e p or p e tr y o f a
laundering.
 Bantkhodri fficpiearlsownhnoohteaillpbeel dfhom
i r ht teraonfsffenr stehe,bpurtotcheoesedsaotrfci ilel gsawlhdci ruhgstransaction may be
held admairnesinrtoatitsvuebyl jebcuttonfolatcwrfiumlicnoamyl milearbcel e.shall be destroyed
proceedings.
Singapore.
A. PDraengeRro.uAs D.rugNs Aoct.(R9A. 1. N6o.0916(5p) re
2001) Section 20: Application of Penalties,Confiscation
Imposition of penalty x x x should include the confiscation
and Forfeiture of the Proceeds or Instruments of the Crime

teanedand
Before h nafocproperties
rtfemiteunrederived
t,oinfRfaA vo.rNothe
. from of.thunlawful
9e16g0overnment,
act, of all the but
including, proceeds
 Jose ca n b e c h a rg e d w it h v io l a tio n o f D a n g e r u s D ru g s A c t b u t n o t formoney
n ot l m
i ti e d ot , m o n e y a n d o ht e r a s es t s ob t a ni e d t he r e b y , a n d
laundering.
 Bank oftfhiceiailnsswurt hmo ehentlpseodrhot imoltsraunssefedr,tuhenel psrsocht eeydsboefol il negatlodraug3srtdransaction may be held
adminipstarayrt ivneolytbcuirtmniontacyl rimail inbael l .y liable.
proceedings.
 constrained by our strict bank secrecy laws.
Singapore.
Historical context of AMLA: Enactment of the
law
 Congress enacted R.A. 9160, or the “Anti-Money Laundering Act

of
2001”
1. criminalized money laundering;
2. created a financial intelligence unit (AMLC);
3. required banks and other covered institutions to comply with customer identification,
record-keeping and reporting of covered and suspicious transactions;
4. Relaxed strict bank deposit secrecy laws and allows issuance of freeze order of bank deposits.
and allows issuance of freeze order of bank deposits. ;
5. provided for freezing and forfeiture of dirty money or property; and,
6. provided for international cooperation in the transnational investigation and
prosecution of money laundering offenses wherever committed.
 Took effect on October 17, 2001.
Historical context of AMLA
 Since its enactment in 2001, AMLA has been amended 4 times

 Law was amended in 2003, 2012, 2013 and the latest amendment was in 2017.
 New IRR was approved in 2018
 IRR for Designated Non-Financial Businesses and Professions
(DNFBPs)
R.A. 9160 R.A. 10365

R.A. 9194 R.A. 10167 R.A. 10927
28 September 15 February
5 March 2003 8 June 2012 19 July 2017
2001 2013
Major Highlights of AMLA, as amended
1. Criminalized money laundering;

2. Required banks and other covered institutions to comply with customer
identification, record-keeping and reporting of covered and suspicious transactions;
3. Created a financial intelligence unit (AMLC);
4. Relaxed strict bank deposit secrecy laws and allows issuance of freeze
order of bank deposits;
5. Provided for freezing and forfeiture of dirty money or property; and,
6. Provided for international cooperation in the transnational investigation and
prosecution of money laundering offenses wherever committed.

 Let us start with the definition of money laundering and how this definition
has been changed and the consequence of such change.
Original Definition of Money Laundering
under R.A. No. 9160
NO NEED TO REMEMBER THIS. I JUST WANT YOU TO TAKE NOTE HOW THE DEFINITION
HAS BEEN CHANGED.
Sec. 4. Money Laundering Offense. 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. It is
committed by the following:
a. Any person knowing that any monetary instrument or property represents, involves, or relates to, the
proceeds of any unlawful activity, transacts or attempts to transact said monetary instrument or property.
b. Any person knowing that any monetary instrument or property involves the proceeds of any unlawful activity
performs or fails to perform any act as a result of which he facilitates the offense of money laundering referred
to in paragraph (a) above.
c. Any person knowing that any monetary instrument or property is required under this Act to
be disclosed and filed with the Anti-Money Laundering Council (AMLC), fails to do so.
under R.A. No. 9160
Sec. 4. Money Laundering Offense. FIRST PART IS A DEFINITION OF MONEY

LAUNDERING. THE SECOND PART IS THE WAYS TO COMMIT THEM:
a. Any person knowing that any monetary instrument or property represents,
involves, or relates to, the proceeds of any unlawful activity, transacts or
attempts to transact said monetary instrument or property.
b. Any person knowing that any monetary instrument or property involves the proceeds of any unlawful activity performs or fails to
perform any act as a result of which he facilitates the offense of money laundering referred to in paragraph (a) above.
c. Any person knowing that any monetary instrument or property is required under this Act to be disclosed and filed with the Anti-
Money Laundering Council (AMLC), fails to do so.
under R.A. No. 9160
Elements of money laundering (par. a)

1. Knowledge of the commission of an unlawful activity
2. The unlawful activity is a predicate offense to money
laundering
3. The unlawful activity yielded proceeds/profits
4. The proceeds have been transacted or attempted to be transacted
5. Purpose of transaction is to obscure the source of the illegitimate
money and make it appear that it comes from legitimate source.
New Definition of Money Laundering
under R.A. No. 10365
Sec. 4. Money Laundering Offense. Money laundering is committed by any person who, knowing that
any monetary instrument or property represents, involves, or relates to the proceeds of any unlawful
activity:
a. transacts said monetary instrument or property;

b. converts, transfers, disposes of, moves, acquires, possesses or uses said monetary
instrument or property;
c. conceals or disguises the true nature, source, location, disposition, movement or ownership of
or rights with respect to said monetary instrument or property;
d. attempts or conspires to commit money laundering offenses referred to in paragraphs
(a) , (b) or (c);
activity:
b. converts, transfers, disposes of, moves, acquires,

possesses or uses said monetary instrument or
property;
c. conceals or disguises the true nature, source, location, disposition, movement or
ownership of or rights with respect to said monetary instrument or property;
d. attempts or conspires to commit money laundering offenses referred to in paragraphs
(a), (b) or (c);
Sec. 4. Money Laundering Offense. Money laundering is committed by any person who,
knowing that any monetary instrument or property represents, involves, or relates to the
proceeds of any unlawful activity:
b. converts, transfers, disposes of, moves, acquires, possesses or uses said monetary instrument or
property;
c. conceals or disguises the true nature, source, location, disposition,
movement or ownership of or rights with respect to said monetary
d. attempts or conspires to commit money laundering offenses referred to in paragraphs (a), (b) or (c);
activity:
b. converts, transfers, disposes of, moves, acquires, possesses or uses said monetary
c. conceals or disguises the true nature, source, location, disposition, movement or ownership of
or rights with respect to said monetary instrument or property;
d. attempts or conspires to commit money laundering offenses

referred to in paragraphs (a), (b) or (c);
activity:
e. aids, abets, assists in, or counsels the commission of the money

laundering offenses referred to in (1), (2), or (3) above; and
activity:
f. performs or fails to perform any act as a result of which he

facilitates the offense of money laundering referred to in (a), (b), or
(c) above.
R. A. No. 9160 / 9194 (OLD) R.A. No. 10365 (CURRENT)
Money laundering is a crime whereby the Money laundering is committed by any person
proceeds of an unlawful activity as herein defined who, knowing that any monetary instrument or
are transacted thereby making them appear to property represents, involves, or relates to the
have originated from legitimate sources. It is proceeds of any unlawful activity
committed by the following:
1. Any person knowing that any monetary
instrument or property represents, involves, or 1. transacts said monetary instrument or
relates to, the proceeds of any unlawful property;
activity, transacts or attempts to transact said 2. converts, transfers, disposes of, moves, acquires,
monetary instrument or property. possesses or uses said monetary instrument or
2. Any person knowing that any monetary property;
instrument or property involves the proceeds 3. conceals or disguises the true nature, source,
of any unlawful activity performs or fails to location, disposition, movement or ownership
perform any act as a result of which he of or rights with respect to said monetary
facilitates the offense of money laundering instrument or property;
referred to in paragraph (a) above.
R. A. No. 9160 R.A. No. 10365
Money laundering is a crime whereby Money laundering is committed by any person
the proceeds of an unlawful activity as herein who, knowing that any monetary instrument or
defined are transacted thereby making them property represents, involves, or relates to the
appear to have originated from legitimate proceeds of any unlawful activity
sources. It is committed by the following:
3. Any person knowing that any monetary 4. attempts or conspires to commit money laundering
instrument or property is required under offenses referred to in paragraphs (a), (b) or (c);
this Act to be disclosed and filed with the 5. aids, abets, assists in or counsels the commission of
Anti- Money Laundering Council the money laundering offenses referred to in
(AMLC), fails to do so. paragraphs (a), (b) or (c) 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 paragraphs (a), (b) or (c) above.
Change in the Definition of Money
Laundering
Elements of money laundering (par. a)

1. Knowledge of the commission of an unlawful activity
- Rule 6 (c) of IRR - The element of knowledge may be established by direct or
circumstantial evidence.
2. The unlawful activity is a predicate offense to money laundering
3. The unlawful activity yielded proceeds/profits
4. said monetary instrument or property is transacted, transferred, disposed of, moved,
acquired, possessed or used, concealed or disguised the true nature of property.
5. Purpose of transaction is to obscure the source of the illegitimate money and make it appear
that it comes from legitimate source.
Case:
Joseph, a jeepney driver, was told by his brother, Elmer, a tricycle

drive that an amount worth P 15M will be deposited to his savings
account. He was instructed to withdraw the money asap and use part of
it to buy a house and lot while the rest (almost P6M) has to be sent to
their other brother in the province. This amount was the part of the
ransom money in a kidnapping case. Elmer, however, was acquitted in
KFR case against him.
When ML case was filed against Joseph, he claimed that he does not
know that the money came from unlawful activity. Is he guilty of
money laundering.
Concept of Willful Blindness
 How to prove knowledge that the proceed is from illegal activity?

 In criminal cases, the element of knowledge may be established by direct or
circumstantial evidence.
 In money laundering prosecutions, liability based on circumstantial evidence is
called willful blindness¸ a situation where the individual seeks to avoid civil or
criminal liability for a wrongful act by intentionally putting himself in a
position where he will be unaware of the facts which would render him liable.,
 In other jurisdictions, particularly the US, the willful blindness doctrine is
followed.
Concept of Willful Blindness
 How to prove knowledge that the proceed is from illegal activity?
 Willful blindness is deliberate ignorance – the [sense] that ‘I do not want

to know about this’, and ignoring or not investigating certain ‘flags of
suspicion’.”: See United States v. Smith, 46 F.3d 1223, 1237 (1st Cir. 1999;
finding that the defendant was willfully blind when he left the room during
a discussion of the scheme saying, “I don’t want to hear this”
 See United States vs. Caraballo-Rodriguez, 786 F.3d 418, 420 fn2 (3rd Cir.2013),
where both actual knowledge and willful blindness may be used to satisfy the
knowledge requirement in the prosecution for money laundering.
Change in the Definition of Money
Laundering
Money Laundering is also committed by any covered person who, knowing

that a covered or suspicious transaction is required under the AMLA, as amended, to
be reported to the Anti-Money Laundering Council (AMLC), fails to do so.
Unlawful Activity (Predicate Offense)
Sec. 4. Money Laundering Offense. Money laundering is committed by any

person who, knowing that any monetary instrument or property represents,
involves, or relates to the proceeds of any unlawful activity:
Predicate Offenses under R.A. No.
9160
Unlawful Activity : Any act or omission or series or combination thereof
involving or having relation to the following:
1. Kidnapping for ransom 8. Swindling
2. Dangerous Drugs Act 9. Plunder
3. Anti-Graft and Corrupt Practices Act 10. Hijacking and other violations of RA 6235
4. Robbery and extortion 11. Qualified theft

5. Piracy on the high seas 12. Jueteng and Masiao
6. Securities Regulation Code 13. Smuggling
7. Electronic Commerce Act of 2000 14. Felonies of a similar nature
punishable in other countries
Expansion of Unlawful Activity from 14 to 34
Crimes under R.A. No. 10365
1. Kidnapping for ransom under the Revised Penal Code (RPC)
2. Drug Trafficking and other violations of the Comprehensive Dangerous
Drugs Act of 2002 (Sections 4, 5, 6, 8, 9, 10, 11, 12,13, 14, 15 and 16)
3. Graft and Corruption (R.A. No. 3019, as amended -Section
3
paragraphs b, c, e, g, h and i)
4. Plunder (R.A. No. 7080, as amended)
5. Robbery and extortion (RPC- Arts. 294, 295, 296, 299, 300, 301 and 302 )
6. Jueteng and Masiao (PD 1602)
7. Piracy (RPC & PD 532)
8. Qualified Theft (RPC)
9. Swindling/Estafa (RPC, Arts. 315 and 316)
11. Violations of Electronic Commerce Act of 2000 (R.A. No. 8792)

12. Hijacking (R.A. No. 6235), Destructive Arson and Murder (RPC)
13. Terrorism & Conspiracy to Commit Terrorism (R.A. No. 9372 – Secs. 3, 4)
14. Financing of Terrorism (R.A. No. 10168 - Sections 4, 5, 6, 7 and 8 )
15. Bribery and Corruption of Public Officers (RPC-Articles 210, 211, 211-A);
16. Frauds and Illegal Exactions and Transactions (RPC - Articles 213,
214, 215 and 216 );
17. Malversation of Public Funds (RPC - Articles 217 and 222 );
18. Forgeries and Counterfeiting (RPC-Articles 163, 166, 167, 168, 169, 176 );
19. Trafficking in Persons (R.A. No. 9208 – Secs. 4-6);
20. Violations of the Revised Forestry Code (PD 705 – Secs. 78-79);
21. Violations of the Philippine Fisheries Code of 1998 (R.A. No. 8550 – Secs. 86-106);
22. Violations of the Philippine Mining Act of 1995 (R.A. No. 7942 – Secs. 101 to 107
and 110);
23. Violations of the Wildlife Resources Conservation and Protection Act (R.A. No.
9147 -Section 27(c), (e), (f), (g) and (i) );
24. Violations of the National Caves and Cave Resources Management Protection
Act (R.A. No. 9072);
25. Carnapping (R.A. No. 6539);
26. Illegal/Unlawful Possession, Manufacture, Dealing In, Acquisition or
Disposition of Firearms, Ammunitions and Explosives (PD 1866);
Case
Enrique owns Goodlogs, Inc. a big logging company. Although Goodlogs, Inc. would
secure all the necessary government permits and licenses before it cuts, collects and
gathers timber, there are areas – especially far flung localities – that it does not bother to
secure government license anymore, in violation of Sec. 68 of the Revised Forestry
Code. These operations proved to be the most profitable. To hide the proceeds of this
illegal logging, Enrique would instruct his staff to mix the profits of the legal with the
illegal operations.
Q: Is there money laundering here?
2. Expansion of Unlawful Activity from
14 to 34 Crimes under R.A. No. 10365
20. Violations of the Revised Forestry Code (PD 705); - Secs. 78 - 79

21. Violations of the Philippine Fisheries Code of 1998 (R.A. No. 8550);
22. Violations of the Philippine Mining Act of 1995 (R.A. No. 7942);
23. Violations of the Wildlife Resources Conservation and Protection Act
(R.A. No. 9147);
24. Violations of the National Caves and Cave Resources Management Protection
Act (R.A. No. 9072);
25. Carnapping (R.A. No. 6539);
26. Illegal/Unlawful Possession, Manufacture, Dealing In, Acquisition or
Disposition of Firearms, Ammunitions and Explosives (PD 1866);
Violations of the Revised Forestry Code (PD 705);
- Secs. 78 - 79
Section 78. Payment, collection and remittance of forest charges. Any person who fails to pay the amount due and
payable under the provisions of this Code, the National Internal Revenue Code, or the rules and regulations promulgated
thereunder, shall be liable to the payment of a surcharge of twenty-five per centum (25%) of the amount due and
payable.
Any person who fails or refuses to remit to the proper authorities said forest charges collectible pursuant to the provisions
of this Code or the National Internal Revenue Code, or who delays, obstructs or prevents the same, or who orders, causes
or effects the transfer or diversion of the funds for purposes other than those specified in this Code, for each such offense
shall, upon conviction, be punished by a fine of not exceeding one hundred thousand pesos (P100,000.00) and/or
imprisonment for a period of not exceeding six (6) years in the discretion of the Court. If the offender is a government
official or employee, he shall, in addition, be dismissed from the service with prejudice to reinstatement and with
disqualification from holding any elective or appointive office.
If the offender is a corporation, partnership or association, the officers and directors thereof shall be
liable.
- Secs. 78 - 79
Section 79. Sale of wood products. No person shall sell or offer for sale any log, lumber, plywood or other manufactured
wood products in the international or domestic market unless he complies with grading rules and established or to be
established by the Government.
Failure to adhere to the established grading rules and standards, or any act of falsification of the volume of logs, lumber, or
other forest products shall be a sufficient cause for the suspension of the export, sawmill, or other license or permit authorizing
the manufacture or sale of such products for a period of not less than two (2) years.
A duly accredited representative of the Bureau shall certify to the compliance by the licensees with
grading rules.
Every dealer in lumber and other building material covered by this Code shall issue an invoice for each sale of such material
and such invoice shall state that the kind, standard and size of material sold to each purchaser in exactly the same as described
in the invoice. Any violation of this Section shall be sufficient ground for the suspension of the dealer's license for a period of
not less than two (2) years and, in addition thereto, the dealer shall be punished for each such offense by a fine of not less than
two hundred pesos (P200.00) or the total value of the invoice, whichever is greater.
- Secs. 78 - 79
Section 68. Cutting, gathering and/or collecting timber or other products without license. Any person who shall cut,
gather, collect, or remove timber or other forest products from any forest land, or timber from alienable and disposable
public lands, or from private lands, without any authority under a license agreement, lease, license or permit, shall be
guilty of qualified theft as defined and punished under Articles 309 and 310 of the Revised Penal Code; Provided, That
in the case of partnership, association or corporation, the officers who ordered the cutting, gathering or collecting shall
be liable, and if such officers are aliens, they shall, in addition to the penalty, be deported without further proceedings on
the part of the Commission on Immigration and Deportation.
The Court shall further order the confiscation in favor of the government of the timber or forest products to cut,
gathered, collected or removed, and the machinery, equipment, implements and tools used therein, and the forfeiture of
his improvements in the area.
The same penalty plus cancellation of his license agreement, lease, license or permit and perpetual disqualification from
acquiring any such privilege shall be imposed upon any licensee, lessee, or permittee who cuts timber from the licensed
or leased area of another, without prejudice to whatever civil action the latter may bring against the offender.
27. Fencing (PD 1612);

28. Illegal Recruitment (R.A. No. 8042 – Sec 6);
29. Violations of the Intellectual Property Code;
30. Voyeurism (R.A. No. 9995 – Sec 4);
31. Child Pornography (R.A. No. 9775 – Sec 4);
32. Child Prostitution, Trafficking, and other forms of Abuse (R.A. No. 7610 - Sections
5, 7, 8, 9, 10 (c), (d) and (e), 11, 12 and 14);
33. Fraudulent practices and other violations of the Securities Regulation
Code (R.A. No. 8799); and
34. Felonies or offenses of a similar nature that are punishable under the penal laws
of other countries.
34. Felonies or offenses of a similar nature that are punishable under the penal laws
of other countries.
 In determining whether or not a felony or offense punishable under the penal laws of
other countries is “of a similar nature”, as to constitute an unlawful activity under
the AMLA, the nomenclature of said felony or offense need not be identical to any of
the unlawful activities listed above.
NOTE: Not all prohibited act in the special laws are

predicate crime to money laundering
e.g.
a. 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”
b. Violations of Sections 101 to 107, and 110 of Republic Act No.
7942, otherwise known as the “Philippine Mining Act of 1995”;
Case
Being the only grandchild, Maria inherited several prime real estate properties from
her grandfather in 2011. Realizing that she will have to pay substantial amount of
money for real estate tax, plus penalties, she bribed tax officials so that the title to the
properties can be transferred to her name at a much lower tax.
Maria also sold some of them to be more liquid and again paid bribe to avoid paying
the correct capital gains tax. Proceeds from this sale and whatever she saved from
capital gains tax were invested in a restaurant business, some were used to construct a
building while others were used to buy blue chip stocks.
Is there money laundering in this case?

2. Legal obligations imposed upon covered persons
4. Relaxed strict bank deposit secrecy laws and allows issuance of freeze order
of bank deposits;
6. Provided for international cooperation in the transnational investigation
and prosecution of money laundering offenses wherever committed.
Case
Antonio is a well-known art dealer having sold the most expensive paintings in the country to the
wealthiest members of the society. He buys and sells paintings but limits his collections to well-
known artists, local and international. In the past, he would buy from and sell to his regular
clients, most of whom are residents of Forbes Park.
Recently, a person not very familiar to him came to his shop and offer to buy an Amorsolo
painting or any painting that is worth at least P15 M. Typically, Antonio is paid using a credit card
or manager’s check. This customer, however, insisted on paying in cash. He has with him a duffle
bag that contains the amount.
Although very suspicious of the character of the buyer and the source of the money,
Antonio agreed to sell the painting and did not make any report to proper authorities. Is
there a violation of AMLA?
Importance of Covered Persons
 Covered persons are the first line of defense against money

laundering
 They also help detect the commission of money laundering
once there is an attempt to transact the proceeds of unlawful
activity
Who are Covered Persons
I. Persons supervised or regulated by BSP

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. Persons supervised or regulated by BSP

- Under the IRR, they include:
A. foreign exchange dealers
B. money changers
C. and remittance and transfer companies are covered persons under the supervision
of the BSP.
II. Persons supervised or regulated by IC

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;
J. All other persons and their subsidiaries and affiliates supervised or regulated by the IC.
III. Persons supervised or regulated by SEC

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.
IV. 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 certain services to
third parties;
C. Persons, including lawyers and accountants, who provide specific services.

(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:
i. acting as a formation agent of juridical persons;
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;

(DNFBPs)
B. Company service providers which, as a business, provide any of the

following services to third parties:
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
iv. acting as (or arranging for another person to act as) a nominee shareholder for another person.

(DNFBPs)
B. Company service providers which, as a business, provide any of the following services to third parties:
C. Persons, including lawyers and accountants, who provide any of the

following services:
i. Managing of client money, securities or other assets;
ii. Management of bank, savings, securities or other assets;

(DNFBPs)
C. Persons, including lawyers and accountants, who provide any of
the following services:
iii. Organization of contributions for the creation, operation or
management of companies; and
iv. Creation, operation or management of juridical persons or
arrangements, and buying and selling business entities.
Case
Arnold is a lawyer and accountant based in Marawi. One day, he was contacted by a classmate in
grade school, Dick, who told him that he has a rich client who wants to incorporate an NGO to
help poor students in Marawi. Arnold was asked to file all the necessary incorporation papers and
Dick ensured that the papers are signed by his clients. Dick acted as the Treasurer while Arnold
was asked to be the Corporate secretary and Asst. Treasurer and one of the bank signatories.
Arnold will also be the accountant
Almost every week, Arnold will receive in his office a check for the, or notice of remittance,
of amounts varying from P250T to P490T. There are times that the amount will be higher –
P1M or more.
Is there any obligation on the part of Arnold to report these transactions to AMLC?
Case
What if the client or Dick also engaged the services of Arnold to seek legal advice
regarding a potential investigation into their business operations?
In effect, Arnold is the corporate secretary, asst. treasurer and a retained counsel of the
client.
Is there any obligation on the part of Arnold to report these transactions to AMLC?
EXCEPTION:
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.
V. Casinos
A. Casino
B. Ship-based casino
C. Internet-based casino
Who are Covered Persons (Special)
VI. Land Registration Authority and all Register of Deeds

- torequire the Land Registration Authority and all its Registries of Deeds to submit to
the AMLC, reports on all real estate transactions involving an amount in excess of
Five Hundred Thousand Pesos (Php500,000.00) within fifteen (15) days from the
date of registration of the transaction, in a form to be prescribed by the AMLC
- - IRR
Legal Duties of Covered Persons
1. Customer identification (KYC)

2. Record-keeping
3. Reporting of covered and suspicious transactions;
1. Customer Identification
 To establish and record the true identity of its clients based on official
documents.
 anonymous accounts, accounts under fictitious names, and all other similar
accounts are absolutely prohibited
 Allows BSP to conduct annual testing but limited to the determination of
the existence and true identity of the owners of such accounts.
2. Record keeping
 All records of all transactions of covered institutions to be
maintained and safely stored for 5 years from the date of
transactions.
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. Includes:
a) immediate family members (spouse or partner; children and their spouses;
and parents and parents-in-law)
b) close relationships and associates that are reputedly known to have
i. Joint beneficial ownership of a legal entity or legal arrangement with the PEP
ii. Sole beneficial ownership of a legal entity or legal arrangement that is known to exist for the
benefit of the main/principal PEP
Politically Exposed Person (PEP)
• generally presents a higher risk for potential involvement in bribery and corruption
by virtue of their position and the influence that they may hold.
• IRR requires covered persons to establish and record the true and full identity of
PEPs, as well as their immediate family members and entities related to them
3. Reporting of covered and suspicious transactions
Transaction
any act establishing any right or obligation, or giving rise to any
contractual or legal relationship between the parties thereto
alsoincludes any movement of funds by any means with a covered
person.
Reporting of Covered transactions
Covered transaction refers to:

a) A transaction in cash or other equivalent monetary instrument exceeding
P 500T;
b) A transaction exceeding P 1M in cases of jewelry dealers, dealers in precious
metals and dealers in precious stones;
c) A single casino transaction involving an amount in excess of P5M.
Case
Five days after receiving the ransom money of P 3M, the kidnappers – Jose, Jerry and Jimmy –
went to a casino and played poker. Each of them exchanged P 1M for casino chips.
Q: Is the crime of money laundering committed at this stage? Suppose Jose, a casino regular,
knowing that the amendment to the AMLA has been passed, asked the casino staff not to get
anymore their particulars, which the staff readily agreed.
Is there a requirement for the casino to get their records and/or submit some reports to the AMLC?
Case
After 6 hours, Jose and Jimmy lost all their money but Jerry won P 7M and immediately
enchashed his winnings. Again, no action was taken by the casino staff? Is there a
violation of the AMLA, as amended? What were the violation/s?
Reporting of Covered transactions
Covered transaction refers to:

a) A transaction in cash or other equivalent monetary instrument exceeding P 500T;
b) A transaction exceeding P 1M in cases of jewelry dealers, dealers in precious metals and dealers in precious stones;
c) A single casino cash transaction involving an amount in excess of P5M.

 Casino cash transaction refers to transactions involving the receipt of cash by a
casino paid by or on behalf of a customer, or transactions involving the payout of cash
by a casino to a customer or to any person in his/her behalf.
Reporting of Suspicious transactions
Suspicious transaction refers to a transaction, regardless of amount,

where any of the following circumstances exists:
a. there is no underlying legal or trade obligation, purpose or economic
justification;
b. the client is not properly identified;
c. the amount involved is not commensurate with the business or
financial capacity of the client;

d. 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;
e. any circumstance 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
person;

f. the transaction is in any way related to an unlawful activity or any money
laundering activity or offense that is about to be committed, is being or has been
committed; or
g. any transaction that is similar, analogous or identical to any of the foregoing.
Sharp Increase in Suspicious
Transaction Reportss
• 2013 - 100,000 STRs, an increase by

about 434% from 2012
• 2016 - 132,306 STRs submitted by 149
CPs
• 2017 - 287,252 STRs.
• more than 100% attributable to STRs
related to:
• Swindling
• violations of the Electronic Commerce Act of
2000
• Anti-Graft and Corrupt Practices Act
• Drug trafficking
• Qualified theft
• Smuggling
• Anti-Child Pornography Act
• Anti-Trafficking in Persons Act.
Prohibitions on CTR/STR Reporting
 When reporting covered or suspicious transactions to the AMLC, covered

persons 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 of such reporting, the contents or
any other information
 Prohibition extends to publication, airing, email
CTR/STR
Reporting
Safe Harbor Provision.
 No administrative, criminal or civil proceedings shall lie against any
person for having made a covered transaction or suspicious transaction
report in the regular performance of his duties and in good faith, whether
or not such reporting results in any criminal prosecution under the AMLA
or any other Philippine law.

identification, record-keeping and reporting of covered and suspicious
transactions;
4. Relaxed strict bank deposit secrecy laws and allows issuance of freeze order
of bank deposits;
Major Highlights of AMLA, as
amended: AMLC
AMLC is the Philippines’ financial intelligence

unit (FIU)
serves as the national center for the receipt and analysis
of:
a. Suspicious transaction reports; and
b. Other information relevant to money laundering and associated
predicate offenses
amended: AMLC Functions
1. Require and receive covered and suspicious transaction reports from covered
institutions;
2. Issue orders to determine the true identity of the owner of any monetary instrument
subject of a CTR/STR or request for assistance from a foreign state x x x
3. Institute civil forfeiture and all other remedial proceedings through the OSG;
4. Cause the filing of complaints with the DOJ or the Ombudsman for the
prosecution of money laundering offenses;
5. Investigate suspicious transactions and covered transactions deemed suspicious,
money laundering activities and other violations of the law;
6. To freeze any monetary instrument or property alleged to be proceed of any unlawful
activity (repealed);
7.to file with the Court of Appeals, ex parte, through the Office of the Solicitor General:
a. a petition for the freezing of any monetary instrument or property that is in any way related to an
unlawful activity; or
b. an application for authority to inquire into or examine any particular deposit or investment,
including related accounts, with any banking institution or non-bank financial institution.
9. Develop educational programs on the pernicious effects of ML, the methods and
techniques used in ML, the viable means of preventing ML 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 GOCCs, in undertaking any and all AML
operations x x x
amended: AMLC
The Council
Governor of the Bangko Sentral Pilipinas,
as Chairman
Insurance Commissioner, Chairman of SEC,

as Member as Member
amended: AMLC
AMLC Secretariat
Executive Director
Technical
Services Staff
Compliance and Legal Services Information Management

Investigation Group Group and Analysis Group
Administrative and
Financial Services Division
Major Highlights of AMLA, as amended:

identification, record-keeping and reporting of covered and suspicious
transactions;
4. Relaxed strict bank deposit secrecy laws and allows
issuance of freeze order of bank deposits;
Major Highlights of AMLA, as amended:
Relaxed Bank Secrecy Law
 Authorized AMLC to inquire into bank deposits – requires court order in

most instances; court order is not required in well-defined cases
 permits the BSP to inquire into or examine any deposit or investment with
any banking institution or non-bank financial institution
amended: Relaxed Bank Secrecy Law
 Subido, et al. vs. CA and Estrada vs. Sandiganbayan, et al.

 Heeding the Court's observance in Eugenio that the remedy of the Republic then lay with
the legislative, Congress enacted RA No. 10167 amending Sec 11 of the AMLA and
specifically inserted the word ex parte appositive of the nature of this provisional remedy
available to the AMLC thereunder.
 the constitutionality of Sec 11 of R.A. No. 9160, as amended, has been dealt with and
upheld in Subido - the AMLC's ex parte application for the bank inquiry order based on
Sec 11 of R.A. No. 9160, as amended, did not violate substantive due process because the
physical seizure of the targeted corporeal property was not contemplated by the law.

 the AMLC, in investigating probable money laundering activities, does not
exercise quasi-judicial powers, but merely acts as an investigatory body with the
sole power of investigation similar to the functions of the NBI.
 the source of the right to privacy respecting bank deposits is statutory, not
constitutional; hence, the Congress may validly carve out exceptions to the rule on
the secrecy of bank deposits, as illustrated in Section 11 of R.A. No. 9160.

 the AMLC, in investigating probable money laundering activities, does not
exercise quasi-judicial powers, but merely acts as an investigatory body with the
sole power of investigation similar to the functions of the NBI.
 the source of the right to privacy respecting bank deposits is statutory, not
constitutional; hence, the Congress may validly carve out exceptions to the rule on
the secrecy of bank deposits, as illustrated in Section 11 of R.A. No. 9160.
Bank Inquiry Order is not a violation of
Substantive Due Process
Succinctly, 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.
Cited Eugenio case - On the other hand, a bank inquiry order under Section 11 does not necessitate any
form of physical seizure of property of the account holder. What the bank inquiry order authorizes is the
examination of the particular deposits or investments in banking institutions or non-bank financial institutions.
The monetary instruments or property deposited with such banks or financial institutions are not seized in a
physical sense but are examined on particular details such as the account holder's record of deposits and
transactions. Unlike the assets subject of the freeze order, the records to be inspected under a bank inquiry
order cannot be physically seized or hidden by the account holder. Said records are in the possession of the
bank and therefore cannot be destroyed at the instance of the account holder alone as that would require the
extraordinary cooperation and devotion of the bank.
- SPCMB vs. CA, et al. G.R. No. 216914 (December 6,
2016)
AMLA Has Sufficient Safeguards Against Abust of
Bank Inquiry Order
1. AMLC is required to establish probable cause as basis for its ex-

parte application for bank inquiry order;
2. CA, independent of the AMLC's demonstration of probable
cause, itself makes a finding of probable cause;
3. Bank inquiry court order ex-parte for related accounts is preceded
by a bank inquiry court order ex-parte for the principal
account both of which requires probable cause separately;
4. Has the comply with the Constitution’s requirements on
reasonable search and seizure (Art. 3, Secs. 2 and 3)
Major Highlights of AMLA, as amended: Civil
Forfeiture
Major features
identification, record-keeping and reporting of covered and suspicious transactions;
4. Relaxed strict bank deposit secrecy laws and allows issuance of freeze order of bank deposits.
5. Civil forfeiture of dirty money or property;,
6. Provided for international cooperation in the transnational investigation and prosecution of
money laundering offenses wherever committed.
Salient amendments: R.A. No.
10365
Clarified that
a. any person may be charged with and convicted of both the offense of
money laundering and the unlawful activity
b. the prosecution of any offense or violation under
this Act shall proceed independently of any
proceeding relating to the unlawful activity
-introduced by
R.A. No. 10365
Expanded definition of Proceeds
and Transaction (R.A. No. 10365)
Proceeds – not limited to those realized/derived from the unlawful activity.

Transaction – refers to any act establishing any right or obligation. It also
includes any movement of funds by any means with a covered institution
Duty of CA when Freeze Order is Filed (R.A.
No. 10167)
 CA has to act on the petition to freeze within twenty-four (24) hours from
filing of the petition.
 Computation of 24 hour period does not include non-working days
 Allows the filing a motion to lift the freeze order by the person whose
account has been frozen
 Directs the court to resolve such motion before the expiration of the 20 day original
freeze order.
Amendments to AMLA: Issuance of
Freeze Order: Period
To stress, the evils caused by the law’s silence on the freeze order’s period of
effectivity compelled this Court to issue the Rule in Civil Forfeiture Cases. Specifically,
the Court fixed the maximum allowable extension on
the freeze order’s effectivity at six months. In doing so, the Court sought to balance
the State’s interest in going after suspected money launderers with an individual’s
constitutionally-protected right not to be deprived of his property without due process of
law, as well as to be presumed innocent until proven guilty.
- Ligot, et al. vs. RP (G.R. No. 176944, March 6, 2013)
Validity of Freeze Order (R.A. No.
10365)
 freeze order cannot exceed 6 months depending upon the

circumstances of the case.
 if there is no case filed against the person whose account has been frozen within the
period determined by the court, the freeze order shall be deemed ipso facto lifted.
 amendment shall not apply to pending cases in the courts.
Freeze Order Issued by AMLC under
the Anti-Terrorism Act (ATA)
 AMLC can issue ex parte order to freeze without delay - upon issuance by the court
of a preliminary order of proscription or when designated by ATC as terrorist
individual, group, organization or association
 effective for a period not exceeding 20 days; extendible to not more than 6 months
but by the CA
Inquiry into Bank Deposits: When Court
Order Not Required (R.A. No. 9194)
1. Kidnapping for ransom under Article 267 of RPC

2. Sections 4, 5, 6, 8, 9, 10, 11, 12, 13, 14, 15 and 16 of the Comprehensive
Dangerous Drugs Act
3. Hijacking and other violations under Republic Act No. 6235; destructive arson and
murder under the RPC
4. Felonies or offenses of a nature similar to those mentioned in Section 3(i) (1), (2) and
(12) of the AMLA which are punishable under the penal laws of other countries
Inquiry into Bank Deposits: When Court Order
Not Required (R.A. No. 9194)
5. Financing of terrorism under Sections 4,6,7, 10, 11 or 12 of Anti-Terrorism Act and

under Sections 4, 5, 6, 7 and 8 of Republic Act No. 10168, otherwise known as the
Terrorism Financing Prevention and Suppression Act of 2012.
6. Funds of person/s of whom there is probable cause to believe that such person/s are
committing or attempting to commit or conspiring to commit or participating in or
facilitating terrorist financing (Sec. 35, ATA).
Inquiry into Bank Deposits: Duty of the CA
(R.A. No. 10167)
 Directs the CA to act on the application within twenty-four (24) hours

from filing of the application.
Inquiry into Bank Deposits: Introduced Rule on
Related Accounts (R.A. No. 10167)
Defined related accounts.

 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) or a bank inquiry order.
 Ex parte court order is required before AMLC can inquire into related accounts
 the procedure for the ex parte application of the ex parte court order for the
principal account shall be the same with that of the related accounts.
Definition materially-linked accounts.

1. All accounts or monetary instruments under the name of the person whose accounts,
monetary instruments, or properties are the subject of the freeze order or an order of
inquiry;
2. All accounts or monetary instruments held, owned, or controlled by the owner or
holder of the accounts, monetary instruments, or properties subject of the freeze
order or order of inquiry, whether such accounts are held, owned or controlled singly
or jointly with another person;
Definition materially-linked accounts.

3. All “In Trust For” accounts where either the trustee or the trustor pertains to a person
whose accounts, monetary instruments, or properties are the subject of the freeze order or
order of inquiry;
4. All accounts held for the benefit or in the interest of the person whose accounts, monetary
instruments, or properties are the subject of the freeze order or order of inquiry; and
5. All other accounts, shares, units, or monetary instruments that are similar, analogous,
or identical to any of the foregoing.
Inquiry into Bank Deposits: Compliance with
Sec 2, Art. III, Constitution (R.A. No. 10167)
Section 2. The right of the people to be secure in their persons, houses, papers, and
effects against unreasonable searches and seizures of whatever nature and for any
purpose shall be inviolable, and no search warrant or warrant of arrest shall issue except
upon probable cause to be determined personally by the judge after examination under
oath or affirmation of the complainant and the witnesses he may produce, and
particularly describing the place to be searched and the persons or things to be seized.
Section 3. (1) The privacy of communication and correspondence shall be inviolable
except upon lawful order of the court, or when public safety or order requires otherwise
as prescribed by law.
(2) Any evidence obtained in violation of this or the preceding section shall be
inadmissible for any purpose in any proceeding.
Made Inquiry into Bank Deposits Ex Parte
Petitions (R.A. No. 10167)
Introduced by R.A. No. 10167

 By expressed provision, allows the ex parte filing of
application for bank deposits inquiry
Made Inquiry into Bank Deposits Ex
Parte Petitions (R.A. No. 10167)
SEC. 11. Authority to Inquire into Bank SEC. 11. Authority to Inquire into Bank
Deposits. Notwithstanding the provisions Deposits. – Notwithstanding the provisions of
of Republic Act No. 1405, as amended, Republic Act No. 1405, as amended; Republic
Republic Act No. 6426, as amended, Act No. 6426, as amended; Republic Act No.
Republic Act No. 8791, and other laws, the 8791; and other laws, the AMLC may inquire
AMLC may inquire into or examine any into or examine any particular deposit or
particular deposit or investment with any investment, including related accounts, with
banking institution or non bank financial any banking institution or non-bank financial
institution upon order of any competent institution upon order of any competent court
court in cases of violation of this Act, x x based on an ex parte application in cases of
x violations of this
Act, x x
Civil Forfeiture: Concept of Equivalent
Value (R.A. No. 10365)
 Introduced the concept of equivalent value

“ forfeiture shall include those other monetary instrument or property having an equivalent value to
that of the monetary instrument found to be related in any way to an unlawful activity or a money
laundering offense, when with due diligence, the former cannot be located, or it has been substantially
altered, destroyed, diminished in value or otherwise rendered worthless by any act or omission, or it
has been concealed, removed, converted, or otherwise transferred, or it is located outside the
Philippines or has been placed or brought…”
 Filing of petition for civil forfeiture is now upon determination of AMLC (i.e.
probable cause exists that any monetary instrument or property is in any way related
to an unlawful activity)
Non-intervention in BIR operations (R.A. No.
10365)
 Clarifiedthat law does not allow AMLC to participate in any

manner in the operations of the BIR.
SEC. 20. Non-intervention in the Bureau of Internal Revenue (BIR) Operations. –

Nothing contained in this Act nor in related antecedent laws or existing agreements
shall be construed to allow the AMLC to participate in any manner in the operations
of the BIR.
Safeguards against harassment
 The AMLA and this RIRR shall not be used for political persecution
or harassment, or as an instrument to hamper competition in trade
and commerce.
 No case for money laundering may be filed against, and no assets shall
be frozen, attached or forfeited to the prejudice of a candidate for an
electoral office during an election period.
Review of AMLA
TRUE OR
FALSE
Case No. 1
Jose is a drug lord. His narcotics operations in the

country yielded P50M profits for the past 5 years. If
Jose tries to conceal this money through investments
in high end real estate, luxury items and sports cars,
he can be held liable for money laundering.
However, there can be no money laundering if he

merely gives the proceeds of his illegal activities to
his brother for safekeeping.
Case No. 2
Because of her husband’s infidelities and marital abuses, Josefa

consulted a lawyer for the purpose of filing an annulment case against
Mario. When Mario learned of his wife’s plan, he immediately sold all
their conjugal properties and hid the proceeds in the bank account of
his brother.
The money was then transferred to the bank account of his brother’s
corporation, which in paper is controlled by Mario. The corporation
invested the money in a restaurant and other businesses, but the profits
are deposited to the bank account of a corporation that still belongs to
Mario. Mario’s acts constitute money laundering.
Case No. 3
Five days after receiving the ransom money of P 3M, the kidnappers –
Jose, Jerry and Jimmy – went to a casino and played poker. Each of them
exchanged P 1M for casino chips.
Q: Is the crime of money laundering committed at this stage?
Suppose Jose, a casino regular, knowing that the amendment to the

AMLA has been passed, asked the casino staff not to get anymore their
particulars, which the staff readily agreed. Is there a requirement on the
part of the casino to get their records and/or submit some reports to the
AMLC given the above circumstances?
Case No. 3
After 6 hours, Jose and Jimmy lost all their money

but Jerry won P 7M and immediately enchashed
his winnings. Again, no action was taken by the
casino staff? Is there a violation of the AMLA, as
amended? What were the violation/s?
Case No. 4
Joseph, a jeepney driver, was told by his brother, Elmer, a tricycle

drive that an amount worth P 15M will be deposited to his savings
account. He was instructed to withdraw the money asap and use part of
it to buy a house and lot while the rest (almost P6M) has to be sent to
their other brother in the province. This amount was the part of the
ransom money in a kidnapping case. Elmer, however, was acquitted in
KFR case against him.
When ML case was filed against Joseph, he claimed that he does not
know that the money came from unlawful activity. Is he guilty of
money laundering.
Case No. 5
Being the only grandchild, Maria inherited several prime real estate
properties from her grandfather in 2011. Realizing that she will have to
pay substantial amount of money for real estate tax, plus penalties, she
bribed tax officials so that the title to the properties can be transferred to
her name at a much lower tax.
Maria also sold some of them to be more liquid and again paid bribe
to avoid paying the correct capital gains tax.
Proceeds from this sale and whatever she saved from capital gains and
estate tax were invested in a restaurant business, some were used to
construct a building while others were used to buy blue chip stocks but all
of which were mixed with her legitimate money.
Is there money laundering in this case?
Case No. 6
Antonio is a well-known art dealer having sold the most expensive paintings in
the country to the wealthiest members of the society. He buys and sells paintings
but limits his collections to well-known artists, local and international. In the past,
he would buy from and sell to his regular clients, most of whom are residents of
Forbes Park.
Recently, a person not very familiar to him came to his shop and offer to buy
an Amorsolo painting or any painting that is worth at least P15 M. Typically,
Antonio is paid using a credit card or
manager’s check. This customer, however, insisted on paying in
cash. He has with him a duffle bag that contains the amount.
Although very suspicious of the character of the buyer and the source of the
money, Antonio agreed to sell the painting and did not make any report to proper
authorities. Is there a violation of AMLA?
Case No. 7
Enrique owns Goodlogs, Inc. a big logging company. Although

Goodlogs, Inc. would secure all the necessary government permits
and licenses before it cuts, collects and gathers timber, it has logging
operations in some areas – especially far flung localities – where it
does not bother to secure government license anymore, in violation
of Sec. 68 of the Revised Forestry Code. These illegal operations
proved to be the most profitable. To hide the proceeds of this illegal
logging, Enrique would instruct his staff to mix the profits of the
legal with the illegal operations.
Q: Is there money laundering here?
Case No. 8
Arnold is a lawyer and accountant based in Marawi. One day, he was

contacted by a classmate in grade school, Dick, who told him that he has a rich
client who wants to incorporate an NGO to help poor students in Marawi.
Arnold was asked to file all the necessary incorporation papers and Dick
ensured that the papers are signed by his clients. Dick acted as the Treasurer
while Arnold was asked to be the Corporate secretary and Asst. Treasurer and
one of the bank signatories. Arnold will also be the accountant
Almost every week, Arnold will receive in his office a check for the, or notice
of remittance, of amounts varying from P250T to P490T. There are times that
the amount will be higher – P1M or more.
Is there any obligation on the part of Arnold to report these

transactions to AMLC?
Case No. 9
Joseph, a jeepney driver, was told by his brother, Elmer, a tricycle driver, that an
amount worth P 15M will be deposited to his savings account. He was instructed to
withdraw the money asap and use part of it to buy a house and lot while the rest
(almost P6M) has to be sent to their other brother in the province.
The AMLC claimed that this money was the ransom money in a kidnapping case.
Elmer, however, was acquitted in KFR case against him for failure of the prosecution
to prove his guilt. Joseph, therefore, cannot also be charged with money laundering. He
also claimed that he does not know that the money came from unlawful activity.
[REPUBLIC ACT
NO. 10168]
AN ACT DEFINING THE CRIME OF
FINANCING OF TERRORISM, PROVIDING
PENALTIES THEREFOR AND FOR OTHER
PURPOSES
SEC. 4. Financing of
Terrorism.
Any person who, directly or indirectly, willfully and without lawful excuse, possesses,
provides, collects or uses property or funds or makes available property, funds or
financial service or other related services, by any means, with the unlawful and willful
intention that they should be used or with the knowledge that they are to be used, in full
or in part: (a) to carry out or facilitate the commission of any terrorist act; (b) by a
terrorist organization, association or group; or (c) by an individual terrorist, shall be guilty
of the crime of financing of terrorism and shall suffer the penalty of reclusion temporal in
its maximum period to reclusion perpetua and a fine of not less than Five hundred
thousand pesos (Php500,000.00) nor more than One million pesos (Php1,000,000.00).
SEC. 4. Financing of
Terrorism.
Any person who organizes or directs others to commit financing of terrorism under
the immediately preceding paragraph shall likewise be guilty of an offense and shall
suffer the same penalty as herein prescribed.
For purposes of this Act, knowledge or intent may be established by direct evidence or
inferred from the attendant circumstances.
SEC. 5. Attempt or Conspiracy to Commit the Crimes of Financing of
Terrorism and Dealing with Property or Funds of Designated Persons.
Any attempt to commit any crime under Section 4 or Section 8 under this Act shall be
penalized by a penalty two degrees lower than that prescribed for the commission of the
same as provided under this Act.
Any conspiracy to commit any crime under Section 4 or Section 8 of this Act shall be
penalized by the same penalty prescribed for the commission of such crime under the said
sections.
There is conspiracy to commit the offenses punishable under Sections 4 and 8 of this
Act when two (2) or more persons come to an agreement concerning the commission of
such offenses and decided to commit it.
SEC. 8. Prohibition Against Dealing with Property
or Funds of Designated Persons.
Any person who, not being an accomplice under Section 6 or accessory under Section 7 in relation to
any property or fund: (i) deals directly or indirectly, in any way and by any means, with any property or
fund that he knows or has reasonable ground to believe is owned or controlled by a designated person,
organization, association or group of persons, including funds derived or generated from property or funds
owned or controlled, directly or indirectly, by a designated person, organization, association or group of
persons; or (ii) makes available any property or funds, or financial services or other related services to a
designated and/or identified person, organization, association, or group of persons, shall suffer the penalty
of reclusion temporal in its maximum period to reclusion perpetua and a fine of not less than Five hundred
thousand pesos (Php500,000.00) nor more than One million pesos (Php1,000,000.00).
SEC. 10. Authority to Investigate Financing of
Terrorism
. – The AMLC, either upon its own initiative or at the request of the ATC, is hereby
authorized to investigate: (a) any property or funds that are in any way related to
financing of terrorism or acts of terrorism; (b) property or funds of any person or persons
in relation to whom there is probable cause to believe that such person or persons are
committing or attempting or conspiring to commit, or participating in or facilitating the
financing of terrorism or acts of terrorism as defined herein.
For purposes of this section and notwithstanding the provisions of Republic Act No.
1405, otherwise known as the “Law on Secrecy of Bank Deposits”, as amended;
Republic Act No. 6426, otherwise known as the “Foreign Currency Deposit Act of
the Philippines”, as amended; Republic Act No. 8791, otherwise known as “The
General Banking Law of 2000” and other laws, the AMLC is hereby authorized to
inquire into or examine deposits and investments with any banking institution or
non-bank financial institution and their subsidiaries and affiliates without a court
order.
SEC. 11. Authority to Freeze
. – The AMLC, either upon its own initiative or at the request of the ATC, is hereby authorized to issue an
ex parte order to freeze without delay: (a) property or funds that are in any way related to financing of
terrorism or acts of terrorism; or (b) property or funds of any person, group of persons, terrorist
organization, or association, in relation to whom there is probable cause to believe that they are committing
or attempting or conspiring to commit, or participating in or facilitating the commission of financing of
terrorism or acts of terrorism as defined herein.
The freeze order shall be effective for a period not exceeding twenty (20) days. Upon a petition filed by the
AMLC before the expiration of the period, the effectivity of the freeze order may be extended up to a
period not exceeding six (6) months upon order of the Court of Appeals: Provided, That the twenty-day
period shall be tolled upon filing of a petition to extend the effectivity of the freeze order.
SEC. 13. Humanitarian Exemption
– The person whose property or funds have been frozen under the first paragraph of
Section 11 may withdraw such sums as the court determines to be reasonably needed for
monthly family needs and sustenance including the services of counsel and the family
medical needs of such person.
The person whose property or funds have been frozen under the third paragraph of
Section 11 may withdraw such sums as the AMLC determines to be reasonably needed
for monthly family needs including the services of counsel and the family medical needs
of such person.
SEC. 16. Duty of the Covered Institutions and/or
Relevant Government Agencies Upon Receipt of the
Freeze Order.
Upon receipt of the notice of a freeze order, the covered institutions and/or relevant
government agencies shall immediately preserve the subject property or funds in
accordance with the order of the AMLC and shall forthwith serve a copy of the notice of
the freeze order upon the owner or holder of the property or funds. Any responsible
officer or other person who fails to comply with a freeze order shall suffer the penalty of
imprisonment from six (6) months to four (4) years and a fine of not less than One
hundred thousand pesos (Php100,000.00) nor more than Five hundred thousand pesos
(Php500,000.00), at the discretion of the court, without prejudice to the administrative
sanctions that the AMLC may impose on the erring covered institution.

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The Anti-Money Laundering Act (AMLA)

 Jose is the head of an international narcotics trafficking and money laundering

Proceeds from drugs trafficking are laundered

 Before the enactment of R.A. No. 9160

o r1 ) instruments of the crime. - Every penalty imposed for the

 Congress enacted R.A. 9160, or the “Anti-Money Laundering Act

 Since its enactment in 2001, AMLA has been amended 4 times

R.A. 9160 R.A. 10365

1. Criminalized money laundering;

1. Criminalized money laundering;

Sec. 4. Money Laundering Offense. FIRST PART IS A DEFINITION OF MONEY

Elements of money laundering (par. a)

a. transacts said monetary instrument or property;

b. converts, transfers, disposes of, moves, acquires,

d. attempts or conspires to commit money laundering offenses

e. aids, abets, assists in, or counsels the commission of the money

f. performs or fails to perform any act as a result of which he

Elements of money laundering (par. a)

Joseph, a jeepney driver, was told by his brother, Elmer, a tricycle

 How to prove knowledge that the proceed is from illegal activity?

 How to prove knowledge that the proceed is from illegal activity?

 Willful blindness is deliberate ignorance – the [sense] that ‘I do not want

Money Laundering is also committed by any covered person who, knowing

Sec. 4. Money Laundering Offense. Money laundering is committed by any

4. Robbery and extortion 11. Qualified theft

11. Violations of Electronic Commerce Act of 2000 (R.A. No. 8792)

20. Violations of the Revised Forestry Code (PD 705); - Secs. 78 - 79

27. Fencing (PD 1612);

NOTE: Not all prohibited act in the special laws are

1. Criminalized money laundering;

 Covered persons are the first line of defense against money

I. Persons supervised or regulated by BSP

I. Persons supervised or regulated by BSP

II. Persons supervised or regulated by IC

III. Persons supervised or regulated by SEC

IV. Designated Non-Financial Businesses and Professions

IV. Designated Non-Financial Businesses and Professions

IV. Designated Non-Financial Businesses and Professions

B. Company service providers which, as a business, provide any of the

IV. Designated Non-Financial Businesses and Professions

C. Persons, including lawyers and accountants, who provide any of the

IV. Designated Non-Financial Businesses and Professions

VI. Land Registration Authority and all Register of Deeds

1. Customer identification (KYC)

3. Reporting of covered and suspicious transactions

Covered transaction refers to:

Covered transaction refers to:

c) A single casino cash transaction involving an amount in excess of P5M.

Suspicious transaction refers to a transaction, regardless of amount,

Suspicious transaction refers to a transaction, regardless of amount,

Suspicious transaction refers to a transaction, regardless of amount,

• 2013 - 100,000 STRs, an increase by

 When reporting covered or suspicious transactions to the AMLC, covered

1. Criminalized money laundering;

AMLC is the Philippines’ financial intelligence

Insurance Commissioner, Chairman of SEC,

Compliance and Legal Services Information Management

1. Criminalized money laundering;

 Authorized AMLC to inquire into bank deposits – requires court order in

 Subido, et al. vs. CA and Estrada vs. Sandiganbayan, et al.

 Subido, et al. vs. CA and Estrada vs. Sandiganbayan, et al.

 Subido, et al. vs. CA and Estrada vs. Sandiganbayan, et al.

1. AMLC is required to establish probable cause as basis for its ex-