Lesson 9-10: E-commerce Act & AMLA

E-commerce Act

Provides legal recognition to electronic transactions and documents

Purpose: To promote electronic commerce, protect online transactions, and penalize cybercrimes

Key Law: Republic Act No. 8792 (E-commerce act of 2000)

Key Provisions of the E-Commerce Act

• Legal Recognition of Electronic Data Messages and Documents

• Electronic Signatures and Authentication

• Obligation of Service Providers

• Cybercrime and Penalties

• Government Use of Electronic Transactions

Legal Recognition of Electronic Documents

Electronic documents are legally equivalent to paper-based documents

Electronic contracts are enforceable as long as they meet the standard requirements of a valid contract

Digital records can be used as evidence in court

Electronic Signatures

A digital mark or process used to sign electronic documents

Legal Status: Electronic signatures are legally binding

Types:

1. Simple electronic signatures

2. Digital signatures (secured through cryptographic technology)

Obligations of E-commerce Service Providers

• Businesses operating online must comply with consumer protection laws

• Online platforms must ensure secure payment systems and protect user data

• Transparency and accountability are required in online transactions

Cybercrimes and Penalties under the E-commerce Act

• Hacking and illegal access to networks

• identity theft and fraud

• Electronic piracy and intellectual property violations

• Penalties: fines and imprisonment for violators

Government Transactions Under the E-commerce Act

• Mandates government agencies to use electronic systems for public services

• Online transactions with the government, such as tax payments and permit applications, are legally recognized

Impact of the E-commerce Act

• Encourages digital business growth

• Enhances consumer protection in online transactions

• Supports innovations in fintech and online services

• Strengthens cybersecurity measures

Emerging Issues and Future Developments

• Data privacy and cybersecurity challenges

• Regulations of digital payment systems

• Cross-border e-commerce and taxation issues

• AI and automation in e-commerce

Anti-Money Laundering Act (AMLA)

Seeks to prevent and combat money laundering and its related crimes

Purpose: to protect the integrity of the financial system and prevent the use of financial institutions for illicit activities

Key Law: Republic Act No. 9160 as amended

What is Money Laundering?

The process of disguising illegally obtained money as legitimate income

Stages of Money Laundering:

• Placement - introducing illicit funds into the financial system

• Layering - concealing the source of funds through complex transactions

• Integration - reintroducing funds into the economy as legitimate assets

Key provisions of the AMLA

• covered institutions and transactions

• Obligations of covered persons

• Suspicious and covered transactions reporting

• penalties and sanctions

• Role of the Anti-Money Laundering Council (AMLC)

Covered Institutions

• Banks and other financial institutions

• Insurance companies

• Securities dealers and investment houses

• Money service businesses (e.g remittance centers, foreign exchange dealers)

• Designated non-financial businesses (real estate brokers, casinos, jewelry dealers, law firms handling financial transactions)

Covered and suspicious transactions

Covered transactions - transactions exceeding PHP 500,000 within one day; Casino transactions exceeding PHP 5 million

Suspicious transactions

• Transactions with no clear economic or legal purpose

• Transactions that deviate from a customer’s usual profile

• Transactions involving false identities or structured deposits

Reporting Obligations

• Covered persons and institutions must report:

  • Covered transactions within (5) working days

  • Suspicious transactions regardless of the amount

• Confidentiality: institutions must not disclose reporting to customers

• Failure to report may lead to criminal liability

Role of the Anti-Money Laundering Council

Mandated to:

• Investigate suspicious transactions

• Freeze and seize assets linked to money laundering

• Coordinate with local and international agencies

• Enforce compliance among covered institutions

Penalties and Sanctions in AMLA

Criminal penalties:

• Imprisonment of 7-14 years

• Fines ranging from PHP 3 million to PHP 15 million

Administrative penalties

• Fines and sanctions for non-compliant institutions

• Revocations of licenses for repeated violations

International Cooperation

• The Philippines is a member of:

  • Financial Actions Task Force (FATF)

  • Asia/Pacific Group on Money Laundering (APG)

  • Egmont Group of Financial Intelligence Units

• Compliance with global standards to prevent blacklisting and sanctions

Challenges and Emerging Issues

• Rise of Digital and cryptocurrency transactions

• cross-border money laundering schemes

• Strengthening enforcement and prosecution

• Balancing AML measures with data privacy and banking secrecy laws.