Anti- Money Laundering Law

"Money laundering”
 "Money laundering”

 RA 9160 (Anti-Money Laundering Act of 2001 [AMLA])

Sec. 4: Money laundering is a CRIME whereby the proceeds of an
unlawful activity as herein defined are TRANSACTED, thereby making
them appear to have originated from legitimate sources
 History
 originated from Mafia ownership of Laundromats in the US
 extortion, prostitution, gambling and bootleg liquor.
 Al Capone purchased Laundromats business (legitimate business)earnings are
mixed with illicit business
 1931 Al Capone was convicted for tax evasion
 Meyer Lansky (Mob’s Accountant) Uses Swiss facilities (Loan-back concept)
 History
 1980’s - International level Money laundering was to combat the “war on drugs”
 1990’s –includes all serious crimes involve including the abuse of power so it has
become a tool in the return of assets
 The Basel Institute on Governance - Singapore, Switzerland, USA, UK (important
financial centers in cross border banking)
 Government and regulators develop in tandem with international law focuses on
customer due diligence
 Basel Committee on Banking Supervision and Financial Action Task Force
FATF – FINANCIAL ACTION TASK FORCE
 Inter-governmental body
 Established in 1989
 Based in Paris, France
 Formed by G-7
 with a mission of paving the way for the effective prevention and
detection of money laundering by ensuring that appropriate measures
against money laundering are implemented in all nations
 Created and maintained a list of Non Cooperative Countries and
Territories (NCCT List)
 FATF – FINANCIAL ACTION TASK FORCE
 1990 - FATF issued 40 Recommendations
 June 2000 – Includes Philippines in its list of Non-Cooperative Countries and
Territories (NCCT)
 October 2001 – RA No. 9160 “AMLA of 2001” enacted
 March 2003 – RA No. 9194 Act amending RA No. 9160

 2001 - 2008 Incorporated subsequent amendments which requires countries

to have measures in place to fight financing of terrorism
 Recommendation No. 8 - (Calls for the review of adequacy of laws and
regulations on NPOs)
 Recommendation No. 9 - (Cash Couriers)

February 11, 2005 – FATF removed the Philippines in the list of Non-
Cooperative Countries and Territories (NCCTs)
Three Stages of Money Laundering

 Placement
 Layering
 Integration

Taken together form the entire cycle of money laundering

Two goals : Hiding where the money came from and where it is going
 Stage 1 - Placement

- Involves the initial placement or introduction of the illegal

funds into the financial system.
Ex.
a. Smurfing or structuring
b. Purchase of insurance contract
 Stage 2 - Layering

- involves a series of financial transactions during which the dirty

money is passed through a series of procedures, putting
layer upon layer of persons and financial activities into the
laundering process.
Ex.
a. electronic transfer of funds
b. disguised transfer of funds as payment for goods or
services
 Stage 3 - Integration

- the money is once again made available to the criminal with

the occupational and geographic origin obscured or
concealed.
- The laundered funds are now integrated back into the
legitimate economy through the purchase of properties,
businesses and other investments.
How does Money Laundering link to other crimes?

 Directly connected to a criminal act or illegal activity

 Predicate crimes would have already taken place
 14 Predicate crimes
 Kidnapping for ransom
 Drug Offenses
 Graft and corruption practices
 Plunder
 Robbery and extortion
 Jueteng and masiao
 Piracy on the high seas
 Qualified Theft
 Swindling
 Smuggling
 Electronic Commerce Crimes
 Hijacking, destructive arson and murder, including those
perpetrated against non-combatant persons (terrorist
acts)
 Securities Fraud
 Felonies or offenses of a similar nature punishable under
penal laws of other countries
 What is Anti-Money Laundering Act?

 Money Laundering was made a criminal offense in the Philippines when

the Philippine Congress approved Republic Act No. 9160, otherwise
known as the Anti-Money Laundering Act (AMLA) of 2001. It was later
amended in 2003 by Republic Act No 9194
 AMLA is the legal basis for making money laundering a criminal offense
in the Philippines, and the money launderer a criminal upon which
criminal penalties can be imposed under the AMLA
 Philippines governments response to the concerns of FATF, to hunting
down and stopping money laundering whenever it may transpire
 Why is Money Laundering Outlawed?
 The Money enters the financial system without being taxed
 The money is the fruit of illegal activity, therefore an extension of that
same crime
 Forces legitimate business to deal with inflated, undercut transactions
 Criminal elements become more comfortable conducting their activities
 Financial system is manipulated – just management of national
economies is put in danger
 What are the covered institutions?

 BSP
 Banks, off shore banking unit, quasi-bank, trust entities, non-stock savings and loan
associations, including their subsidiaries and affiliates, as well as pawnshops, foreign
exchangers and remittance agents
 SEC
 Securities dealers, brokers, pre-need companies, foreign exchange corporations, investment
houses, trading advisors and all other entities dealing in currency, commodities or other
monetary properties
 IC
 Insurance companies, insurance agents, insurance brokers, professional reinsurers,
reinsurance brokers and holding companies
 What is a covered transaction?

 A single transaction involving a total amount in excess of

PHP500,000.00 within 1 banking day with a covered institution
(cash)
 This must be reported to the AMLC in a covered transaction report
(CTR)
For the AMLC To check these are legitimate transactions
 What is a suspicious transaction?

1. No underlying legal or trade reason or purpose for the transaction – large

transaction for no apparent reasons
2. The individual making the transaction has no proper identification
3. The amount involved does not correspond with the expected business or
financial capacity of the individual making the transaction
4. The transaction is done in a way to avoid being reported as a covered
transaction to the AMLC – big transaction broken into smaller ones in the
same day
 What is a suspicious transaction?

5. The transaction is a major shift from the usual transaction history

of the individual
6. The transaction is in any way related to an unlawfully activity or a
money laundering offense – must be reported immediately
7. Any transaction that is similar or analogous to the foregoing

A suspicious transaction report (STR) should be made if any of these

conditions are met.
Importance behind fighting money laundering

 Serious problem
 Criminals will multiply if even small businesses does not
comply
 Small businesses may be held responsible under AMLA
 Global scale and is not limited to local context
 For the law to prevail here and abroad must work hand in
hand
How to fight?
 Know Your Customer (KYC)
 Maintain strict identification standards
 Keep clear and accurate records
 Report all covered and suspicious transactions

International agency that fights money laundering:

 Financial Action Task Force (FATF)
 The Egmont Group
 The Asia Pacific Group on Money Laundering
 Legal Consequences –penalties and its related
offenses
The AMLA penalizes the following acts or omissions:
 Money laundering proper – 7 to 14 years imprisonment and fine not <3M but not more than
twice the value of money instrument or property
 Facilitating money laundering – 4 to 7 years and fine not <1.5M but not > 3M
 Failing to report CTR and STR – 6 months to 4 years or a fine not <100K but not
>500K or both

Other violations punishable under the AMLA:

 Failure to keep records – 6months to 1 yr or a fine not <100K but not >500K or both
 Malicious reporting - 6 months to 4 years and a fine not <100K but not >500K or both
 Breach of confidentiality – 3 to 8 yrs and a fine not <500K but not>1M
 Administrative violations – fine 100K to 500K
 ANTI-MONEY LAUNDERING COUNCIL
 2001 ALMC was formed upon the
enactment of RA 9160
 with a mandate to prevent the entry of
illegally acquired funds into our
financial system
 AMLC Secretariat implementing arm of
AMLC
 FUNCTIONS OF AMLC
1. to require and receive covered or suspicious transaction reports from covered
institutions;
2. issue orders to determine the true identity of the owner of any monetary instrument
or property that is the subject of a report, and to request the assistance to the
approve a foreign country if
3. institute civil forfeiture and all other remedial proceedings through the Office of the
Solicitor General;
4. to cause the filing of complaints with the Department of Justice or the Ombudsman
for the prosecution of money laundering offenses;
5. to investigate suspicious transactions and covered transactions deemed suspicious
after an investigation by AMLC, money laundering activities, and other violations of
the Act;
 FUNCTIONS OF AMLC
6. Secure the order of the Court of Appeals to freeze any monetary instrument
or property alleged to be the proceeds of unlawful activity
7. Implement necessary and justified measures to counteract money laundering;
8. Receive and act on any requests from foreign countries for assistance in their
own anti-money laundering operations
9. Develop education programs to make the public aware of the pernicious
effects of money laundering and how they can participate in bringing
offenders to justice
10. Enlist the assistance of any branch of government, including intelligence
agencies, for the prevention, detection and investigation of money laundering
offenses and prosecution of offenders
11. to impose administrative sanctions for the violation of laws, rules, regulations
and orders and resolutions issued pursuant thereto; and
 Laws and Rules Covering the AMLC
 Republic Act No. 9160 - Anti-Money Laundering Act (AMLA) of 2001
 Republic Act No. 9194 - Amending the AMLA
 Republic Act No. 10167 - Strengthening the AMLA
 Republic Act No. 10365 - Further Strengthening the AMLA
 Republic Act No. 10927 - Designating Casinos as Covered Persons under the AMLA
 2016 Revised Implementing Rules and Regulations of Republic Act No. 9160, As Amended
(2016 RIRR)
 Casino Implementing Rules and Regulations of Republic Act No. 10927 (CIRR)
 Rules on the Imposition of Administrative Sanction under Republic Act No. 9160, as Amended
 A.M. No. 05-11-04-SC - Rule of Procedure in Cases of Civil Forfeiture, Asset Preservation, and
Freezing of Monetary Instrument, Property, or Proceeds Representing, Involving, or Relating
to an Unlawful Activity or Money Laundering Offense under Republic Act No. 9160, as
Amended.
 Republic Act No. 10168 - Terrorism Financing Prevention and Suppression Act of 2012
 Implementing Rules and Regulations of Republic Act No. 10168
Contacting the AMLC and supervisory/ regulatory
agencies (BSP,SEC, IC)
 References

 http://www.amlc.gov.ph
 www.fatf-gafi.org
 A Comparative Guide to Anti-Money Laundering by Mark Pieth and
Gemma Aiolfi 2004
 Annual Report 2011 by AMLC
 https://en.wikipedia.org/wiki/Anti-
Money_Laundering_Council_(Philippines)#The_AMLC_Secretariat
 https://www.scribd.com/document/56157975/Money-Laundering