AMLA

ANTI-MONEY LAUNDERING ACT (RA 9160, AS AMENDED BY RA 9194)

MONEY LAUNDERING
A crime committed by any person knowing that any monetary instrument or property represents, involves or relates to, the proceeds of any unlawful activity:
1. Transacts or attempts to transact said monetary instrument or property
2. Converts, transfers, disposes of, moves, acquires, possesses or uses said monetary instrument or property
3. Conceals or disguises the true nature, source, location, disposition, movement or ownership of or rights with respect to said monetary instrument or property
4. Attempts or conspires to commit money laundering offenses referred to above;
5. Aids, abets, assists in or counsels the commission of the money laundering offenses referred to above (1 to 3)
6. Performs or fails to perform any act as a result of which he facilitates the offense of money laundering referred to above (1 to 3);
7. Those committed by failure to report to the Anti-Money Laundering Council (AMLC) by any covered person knowing that a covered or suspicious transaction is required under the Anti-Money Laundering Law to be reported thereto.

STAGES OF MONEY LAUNDERING:
1. Placement - The launderer inserts dirty money into a legitimate financial institution

2. Layering - Involves sending money through various financial transactions to change its form and make it more difficult to follow.
3. Integration - At this stage the money re-enters mainstream economy in legitimate-looking form, appearing to have come from legitimate transaction.

UNLAWFUL ACTIVITIES
Any act or omission or series or combination thereof involving or having relation to the following:
1. Kidnapping for ransom under Article 267 of RPC
2 Sections 4, 5, 7, 8, 9, 10, 12, 13, 14, 15 and 16 of Comprehensive Dangerous Drugs Act (RA 9165)
a. Importation of prohibited drugs
b. Sale of prohibited drugs
c. Administration of prohibited drugs
d. Distribution of prohibited drugs
e. Transportation of prohibited drugs
f. Maintenance of a den, dive, or resort for prohibited users
g. Manufacture of prohibited drugs
h. Possession of prohibited drugs
i. Use of prohibited drugs
j.Cultivation of plants which are sources of prohibited drugs
k. Culture of plants which are sources of prohibited drugs
3. Section 3, paragraphs B, C E, G, H and I of RA 3019, or the Anti-Graft and Corrupt Practices Act
a. Directly or indirectly requesting or receiving any gift, present, share, percentage, or benefit for himself or for any other person in connection with contract or transaction between the Government and any party, wherein the public officer in his official capacity has to intervene under the law
b. Directly or indirectly requesting or receiving any gift, present, or other pecuniary or material benefit, for himself or for another, from any person for whom the public officer, in any manner or capacity, has secured or obtained, or will secure or obtain, any government permit or license, in consideration for the help given or to be given
c. Causing any undue injury to any party, including the government, or giving any private party any unwarranted benefits, advantage, or preference in the discharge of his official, administrative, or judicial functions through manifest partiality, evident bad faith, or gross inexcusable negligence
d. Entering, on behalf of the government, into any contract or
transaction manifestly and grossly disadvantageous to the same,whether or not the public officer profited or will profit thereby
e. Directly or indirectly having financial or pecuniary interest in any business contract or transaction in connection with which he intervenes or takes part in his official capacity, or in which he is prohibited by the Constitution or by any law from having any interest
f. Directly or indirectly becoming interested, for personal gain, or having material interest in any transaction or act requiring the approval of a board, panel, or group of which he is a member, and which exercise of discretion in such approval, even if he votes against the same or he does not participate in the action of the board, committee, panel, group
4. Plunder under RA 7080
5. Robbery and extortion under Articles 294, 295, 296, 299, 300, 301 and 302 of RPC
a. Robbery with violence or intimidation of persons
b. Robbery with physical injuries, committed in an uninhabited place and  by a band, or with use of firearms on a street, road, or alley
C.Robbery in an uninhabited house or public building or edifice devoted to worship

Note: Theft, or the taking of personal property with intent to gain but without violence or intimidation of persons or force upon things, is not an unlawful activity under the AMLA. Unless what was stolen are coconuts in a coconut farm, fish in a fishpond, mail matter, vehicle or cattle, or the crime was committed with abuse of confidence - in which cases, it will be Qualified Theft, which is covered as an unlawful act; or if
the thing stolen was sold, in which case a violation of the Anti-Fencing Law is committed, which is likewise covered as an unlawful activity.

6. Jueteng and masiao under PD 1602
7. Piracy on the high seas under RPC and PD 532
a. Piracy on the high seas
b. Piracy in inland Philippine waters
c. Aiding and abetting pirates and brigands

8. Qualified theft under Article 310 of RPC
9. Swindling (or Estafa) under Article 315 of RPC
10. Smuggling under RA 455 and RA 1937
11. Violations of Electronic Commerce Act (RA 8792)
12. Hijacking and other violations under RA 6235
13. Destructive arson and murder as defined under RPC
14. Terrorism and conspiracy to commit terrorism as defined and penalized under Sections 3 and 4 of Republic Act No. 9372
15. Financing of terrorism under Section 4 and offenses punishable under Sections 5, 6, 7 and 8 of Republic Act No. 10168, otherwise known as the Terrorism Financing Prevention and Suppression Act of 2012
16. Bribery under Articles 210, 211 and 211-A of the Revised Penal Code, as amended, and Corruption of Public Officers under Article 212 of the Revised Penal Code, as amended
17. Frauds and Illegal Exactions and Transactions under Articles 213, 214, 215 and 216 of the Revised Penal Code, as amended
18. Malversation of Public Funds and Property under Articles 217 and 222 of the Revised Penal Code, as amended
19. Forgeries and Counterfeiting under Articles 163, 166, 167, 168, 169 and 176 of the Revised Penal Code, as amended
20. Violations of Sections 4 to 6 of Republic Act No. 9208, otherwise known as the Anti-Trafficking in Persons Act of 2003
21. 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
22. Violations of Sections 86 to 106 of Chapter VI, of Republic Act No. 8550, otherwise known as the Philippine Fisheries Code of 1998
23. Violations of Sections 101 to 107, and 110 of Republic Act No. 7942, otherwise known as the Philippine Mining Act of 1995
24. Violations of Section 27(c), (e), (f), (g) and (i), of Republic Act No. 9147, otherwise known as the Wildlife Resources Conservation and Protection Act
25. Violation of Section 7(b) of Republic Act No. 9072, otherwise known as the National Caves and Cave Resources Management Protection Act
26. Violation of Republic Act No. 6539, otherwise known as the Anti-Carnapping Act of 2002, as amended
27. Violations of Sections 1, 3 and 5 of Presidential Decree No. 1866, as amended, otherwise known as the decree Codifying the Laws on Illegal/Unlawful Possession, Manufacture, Dealing In, Acquisition or Disposition of Firearms, Ammunition or Explosives
28. Violation of Presidential Decree No. 1612, otherwise known as the Anti-Fencing Law
29. Violation of Section 6 of Republic Act No. 8042, otherwise known as the Migrant Workers and Overseas Filipinos Act of 1995, as amended by Republic Act No. 10022
30. Violation of Republic Act No. 8293, otherwise known as the Intellectual Property Code of the Philippines
31. Violation of Section 4 of Republic Act No. 9995, otherwise known as the Anti-Photo and Video Voyeurism Act of 2009
32. Violation of Section 4 of Republic Act No. 9775, otherwise known as the Anti-Child Pornography Act of 2009
33. Violations of Sections 5, 7, 8, 9, 10(c), (d) and (e), 11, 12 and 14 of Republic Act No. 7610, otherwise known as the Special Protection of Children Against Abuse, Exploitation and Discrimination
34. Fraudulent practices and other violations under Republic Act No. 8799, otherwise known as the Securities Regulation Code of 2000;
35. Violation of Sec. 19(a)(3) of RA No. 10697 (Strategic Trade Management Act) [To engage in any activity prohibited by, or in contravention of any orders or regulations issued by the NSC-STMCom to implement the provisions of this Act] (as amended by RA No. 11521, effective January 31, 2021)
36. Violations of Section 254 of Chapter II of Title X of the NIRC (Tax Evasion), where the basic tax in the final assessment is in excess of P25M per taxable year for each tax type with finding of probable cause; willful misrepresentation or malicious intent; AMLC cannot institute
forfeiture proceedings if the same has been recovered by the BIR (as amended by RA No. 11521, effective January 31, 2021)
37. Felonies or offenses of a similar nature that are punishable under the penal laws of other countries. (as amended by RA No. 10365)

COVERED ENTITIES
1. Banks, offshore banking units, quasi-banks, trust entities, non-stock savings and loan associations, pawnshops, and all other institutions and their subsidiaries and affiliates supervised and/or regulated by the BSP
2. Other entities administering or otherwise dealing in currency, commodities, or financial derivatives based thereon, valuable objects, cash substitutes, and other similar monetary instruments or property supervised and/or regulated by the SEC
3. Insurance companies, insurance agents, insurance brokers, professional reinsurers, reinsurance brokers, holding companies, holding company systems, and all other persons and entities supervised and/or regulation by the Insurance Commission
4. Securities dealers, brokers, salesmen, associated persons of brokers or dealers, investment houses, investment agents and consultants, trading advisors, and other entities managing securities or rendering similarservices
5. Mutual funds or open-end investment companies or issuers and other similar entities
6. Jewelry dealers in precious metals/stones, who as, a business, trade in precious metals/stones, for transactions in excess of P1M
7. Land Registration Authority and all of its Register of Deeds on all real estate transaction with price exceeding P500,000
8. Foreign exchange corporations, money changers, money payment, remittance, and transfer companies and other similar entities
9. Casinos, including internet and ship-based casinos with respect to their casino cash transactions related to their gaming operations. (as amended by RA No. 10927)
10. Company service providers to 3rd parties including CPAs and Lawyers
a. acting as a formation agent of juridical persons;
b. 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;
c. 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
d. acting as (or arranging for another person to act as) a nominee shareholder for another person.
11. Person providing the following services including CPAs and lawyers
a. managing of client money, securities or other assets;
b. management of bank, savings or securities accounts;
c. organization of contributions for the creation, operation or
management of companies; and
d. creation, operation or management of juridical persons or
arrangements, and buying and selling business entities.
12. Real Estate Developers and Brokers
13. Offshore Gaming Operators and their Service Providers (as amended by RA No. 11521, effective January 31, 2021)

Lawyers and accountants: are NOT covered:
1. Lawyers if acting as independent legal professionals in relation to information concerning their clients or where disclosure of information would compromise client confidences or the attorney-client relationship
2. Certified public accountants if acting as independent legal professionals in relation to information concerning their clients or where disclosure of information would compromise client confidences or the CPA-client relationship.

Shell Company: A shell company is an incorporated company that possesses no significant assets and does not perform any significant operations. To  launder money, the shell company purports to perform some service that would reasonably require its customers to often pay with cash. Cash
transactions increase the anonymity of customers and therefore decrease the government's ability to trace the initial recipient of the dirty money. Money launderers commonly select beauty salons and plumbing services as shell companies. The launderer then deposits the money with the shell company, which deposits it into its accounts. The shell company then creates fake invoices and receipts to account for the cash. Such transactions create the appearance of propriety and clean money. The shell company can then make
withdrawals and either return the money to the initial criminal or pass the money on to further shell companies before returning it to further cloud who first deposited the money

OBLIGATIONS OF COVERED INSTITUTIONS
1. Customer identification: Covered institutions shall establish and record the true identity of its clients based on official documents.
a. Face-to-Face Contact. - Covered persons shall conduct face-to-face contact at the commencement of the relationship, or as reasonably practicable so as not to interrupt the normal conduct of business
b. Minimum Customer Information and Identification Documents
i. Name of customer;
ii. Date and place of birth;
iii. Name of beneficial owner, if applicable;
iv. Name of beneficiary (in case of insurance contracts or remittance transactions);
v. Present address;
vi. Permanent addresses;
vii. Contact number or information;
viii. Nationality;
ix. Specimen signatures or biometrics of the customer;
x. Nature of work and name of employer or nature of self-
employment! business, if applicable;
xi. Sources of funds or property; and
xii. Tax Identification Number (TIN), Social Security System (SSS) number or Government Service Insurance System (GSIS) number, if applicable.

Prohibited Accounts:
a. Anonymous Accounts and Accounts under Fictitious Names. - Covered persons shall maintain customers' account only in the true and full name of the account owner or holder. Anonymous accounts, accounts under fictitious names, and all other accounts shall be absolutely prohibited.
b. Numbered Accounts. Numbered accounts, except non-checking numbered accounts, shall not be allowed. Covered and suspicious transaction reports involving non-checking numbered accounts shall contain the true name of the account holder
2. Record keeping: All records of all transactions of covered institutions shall be maintained and safely stored for 5 years from the date of transactions.
3. Safe Harbor: No administrative, criminal, or civil proceedings, shall lie against any person for having made a transaction report in the regular
performance of his duties and in good faith, whether or not such results in any criminal prosecution under Philippine laws.
4. REPORTORIAL REQUIREMENTS:
a. Covered Transactions - covered institutions shall report to the AMLC all covered transactions within 5 working days from occurrence thereof, unless the AMLC prescribes a longer period not exceeding 15 working days. Conviction of the unlawful activity is not necessary before a report is made.

COVERED TRANSACTION
A transaction in cash or other equivalent monetary instrument involving a total amount in excess of P500,000 within one banking day.

For casinos, a single casino cash transaction in excess of P5,000,000 or its equivalent in any other currency. (as amended by RA No. 10927)

For real estate developers/brokers, a single cash transaction
involving an amount in excess of P7,500,000 or its equivalent in any other currency. (as amended by RA No. 11521, effective January 31, 2021)

b. Suspicious Transactions - covered persons to promptly file
suspicious transaction reports within the next working day from occurrence thereof, which for purposes of the Rule, shall be the date of establishment of suspicion or determination of the suspicious nature of the transaction. (as amended by Sec. 9 of 2020 IRR amending Sec. 2.2 of 2018 IRR, which originally provided: 5 working days from occurrence as well, "Occurrence" meaning the time the covered entity has determined that the transaction is suspicious, which should not exceed 10 days from the date of the transaction).

SUSPICIOUS TRANSACTION
A transaction with covered institutions, regardless of the amount involved, where any of the following circumstances exist:
i. There is no underlying legal or trade obligation, purpose or
economic justification
ii. The client is not properly identified
iii. The amount involved is not commensurate with the business or financial capacity of the client
iv. Taking into account all known circumstances, it
perceived that the client's transaction is structured in order to
avoid being the subject of reporting requirements under the Act
v. Any circumstances 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 institution
vi. The transaction is in any way related to an unlawful activity or offense under this Act that is about to be, is being or has been committed
vii. Any transaction that is similar or analogous to any of the
foregoing

*Should a transaction be determined to be both a covered and a suspicious transaction, it shall be reported as a suspicious transaction.
*When reporting, it shall not be considered a violation of bank secrecy laws and similar laws. It shall be prohibited from communicating, directly or indirectly, in any manner or by any means, to any person the fact that a covered or suspicious transaction report was made, the content
thereof, or any other information in relation thereto.

ILLUSTRATION:
1. A balut vendor deposited P300,000 in a single banking day. What report will be prepared by the Bank, if any?

ANSWER: In this case, the transaction is not a "covered transaction" since the amount does not exceed P500,000. It may, however, qualify as suspicious since the transaction is not commensurate to the business of the client, the Bank then will prepare a suspicious transaction report.

2. If the balut vendor instead deposited P600,000 in a single banking day, what report(s) will be prepared by the Bank, if any?

ANSWER: In this case, the transaction is both covered (because the amount exceeds P500,000) and suspicious (since the amount is not commensurate
to the business of the client.

Since it is both a covered and suspicious transaction, the Bank need only prepare a suspicious transaction report.


ANTI-MONEY LAUNDERING COUNCIL
It is composed of:
1. Chairman: BSP Governor
2. Members:
a. Commissioner of Insurance Commission
b. Chairman of SEC

Functions of AMLC:
1. To investigate suspicious transactions and covered transactions deemed suspicious after determination by AMLC, money laundering activities and other violations of this Act. (as included by RA No. 11521, effective January 31, 2021)
2. To require and receive covered transaction reports from covered institutions
3. To issue orders addressed to the appropriate Supervising Authority or the covered institution to determine the true identity of any monetary instrument or property subject of a covered transaction report or request
for assistance from a foreign State, or believed by the Council, on the basis of substantial evidence to be in whole or in part, whenever located, representing, involving or related to, directly or indirectly, in any manner
or by any means, the proceeds of an unlawful activity
4. To institute civil forfeiture proceedings and all other remedial proceedings through the OSG
5. To cause the filing of complaints with the DOJ or Ombudsman for the
prosecution of money laundering offenses

6. To initiate investigations of covered transactions, money laundering activities and other violations of RA 9160
7. To freeze any monetary instrument or property alleged to be proceeds of any unlawful activity
8. To implement such measures as may be necessary and justified under RA 9160 to counteract money laundering
9. To receive and take action in respect of, any request from foreign states for assistance in their own anti-money laundering operations provided in RA 9160
10. 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
11. To enlist the assistance of any branch, department, bureau, office, agency or instrumentality of the government, including GOCCS, 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.
12. To impose administrative sanctions for the violation of laws, rules, regulations, orders, and resolutions issued pursuant to law
13. "in the conduct of its investigation, the AMLC shall apply for the issuance of a search and seizure order with any competent court; (as included by RA No. 11521, effective January 31, 2021)
14. "in the conduct of its investigation, the AMLC shall apply for the issuance of subpoena ad testificandum and/or subpoena duces tecum with any competent court; (as included by RA No. 11521, effective January 31, 2021) slab
15. "to implement targeted financial sanctions in relation to proliferation of weapons of mass destruction and its financing, including ex parte freeze, without delay, against all funds and other assets that are owned and controlled, directly or indirectly, including funds and assets derived or generated therefrom, by individuals or entities
designated and listed under United Nations Security Council
Resolution Numbers 1718 of 2006 and 2231 of 2015 and their successor resolutions as well as any binding resolution of the Security Council; and (as included by RA No. 11521, effective January 31, 2021)
16. "to preserve, manage or dispose assets pursuant to a freeze order, asset
preservation order, or judgment of forfeiture: Provided, however, That pending their turnover to the national government, all expenses incurred in relation to the duties herein mentioned shall be deducted from the amount to be turned over to the national government." (as included by RA No. 11521, effective January 31, 2021)

Freezing of Monetary Instrument or Property: The Court of Appeals, upon application ex parte by AMLC and after determination that probable cause exists that any monetary instrument or property is in any way related to an
unlawful activity, may issue a freeze order which shall be effective immediately (for a period of 20 days unless extended by the court application by the AMLC).

Considering the intricate and diverse web of related and interlocking accounts pertaining to the monetary instruments or properties that any person may create in the different covered institutions, their branches and/or
other units, AMLC may apply to freeze monetary instruments or properties in the names of the reported owners/holders, and monetary instruments or properties named in the application of the AMLC, including all other related
web of accounts.

Related Web of Accounts are those accounts, the funds and sources of which originated from and/or are materially linked to the monetary instruments or properties subject of the freeze orders.


AMENDMENTS UNDER RA No. 11521 (effective January 31, 2021)
1. Within the twenty (20) day period, the Court of Appeals shall conduct a summary hearing, with notice to the parties, to determine whether or not to modify or lift the freeze order, or extend its effectivity.
2. The total period of the freeze order issued by the Court of Appeals under this provision shall not exceed six (6) months.
3. This is without prejudice to an asset preservation order that the Regional Trial Court having jurisdiction over the appropriate anti-money laundering case or civil forfeiture case may issue on the same account
depending on the circumstances of the case, where the Court of Appeals will remand the case and its records.
4. If there is no case filed against a person whose account has been frozen within the period determined by the Court of Appeals, not exceeding six (6) months, the freeze order shall be deemed ipso facto lifted.
5. This new rule shall not apply to pending cases in the courts. In any case, the court should act on the petition to freeze within twenty-four (24) hours from filing of the petition. If the application is filed a day before a
nonworking day, the computation of the twenty-four (24) hour period shall exclude the nonworking days.
6. The freeze order or asset preservation order issued under this Act shall be limited only to the amount of cash or monetary instrument or value of property that court finds there is probable cause to be considered as
proceeds of a predicate offense, and the freeze order or asset preservation order shall not apply to amounts in the same account in excess of the amount or value of the proceeds of the predicate offense.
7. A person whose account has been frozen may file a motion to lift the freeze order and the court must resolve this motion before the expiration of the freeze order.
8. No court shall issue a temporary restraining order or a writ of injunction against any freeze order, except the Supreme Court.
9. For purposes of implementing targeted financial sanctions in relation to proliferation of weapons of mass destruction and its financing, the AMLC shall have the power to issue, ex parte, an order to freeze without delay.
10. The freeze order shall be effective until the basis for its issuance shall have been lifted. During the effectivity of the freeze order, the aggrieved party may, within twenty (20) days from issuance, file with the Court of
Appeals a petition to determine the basis of the freeze order according to the principle of effective judicial protection:
11. The person whose property or funds have been frozen may withdraw such sums as the AMLC determines to be reasonably needed for monthly family needs and sustenance including the services of counsel and the family medical needs of such person.
12. The AMLC, if circumstance warrant, may initiate civil forfeiture proceedings to preserve the assets and to protect it from dissipation.
13. No court shall issue a temporary restraining order or a writ of injunction (or even an asset preservation order as per Sec. 12(d), as amended) against the freeze order (referred to in 9 and 12), except the Court of Appeals or the Supreme Court

Authority to inquire into bank deposits: The AMLC may inquire into deposits upon order of the court when there is probable cause that the deposits are related to the crime or unlawful activities.

However, a court order is not necessary when the offense or unlawful activity involved is any of the following:
1. Kidnapping for ransom under Article 267 of Act No. 3815, otherwise known as the Revised Penal Code, as amended;
2. Sections 4, 5, 6, 8, 9, 10, 11, 12, 13, 14, 15 and 16 of Republic Act No. 9165, otherwise known as the Comprehensive Dangerous Drugs Act of 2002;
3. Hijacking and other violations under Republic Act No. 6235;
4. Destructive arson and murder, as defined under the Revised Penal Code, as amended;
5. 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;
6. Terrorism and conspiracy to commit terrorism as defined and penalized under Republic Act No. 9372; and
7. Financing of terrorism under Section 4 and offenses punishable under Sections 5, 6, 7 and 8 of Republic Act No. 10168, otherwise known as the Terrorism Financing Prevention and Suppression Act of 2012.

Inquiry into deposits may be availed of even in the absence of a pre-existing criminal case under the same law. However, the order authorizing bank inquiry cannot be issued ex parte.

Asset Forfeiture:
1. Civil Forfeiture. - Upon determination that probable cause exists that any monetary instrument or property is in any way related to an unlawful activity or a money laundering offense, the AMLC shall file with the regional trial court, through the Office of the Solicitor General, a verified petition for civil forfeiture.n
2. No Prior Criminal Charge, Pendency of or Conviction Necessary. - No prior criminal charge, pendency of or
conviction for an unlawful activity or money laundering offense is necessary for the commencement or the resolution of a petition for civil forfeiture.
3. Asset Forfeiture in Money Laundering Cases. - Where there is conviction for money laundering, the court shall issue a judgment of forfeiture in favor of the Government of the Philippines with respect to the monetary instrument or property found to be proceeds of an unlawful activity.