You are on page 1of 69

Your Logo

Here

ANTI-MONEY
ANTI-MONEY LAUNDERING
LAUNDERING
101
101

Your Logo
Here

Your Logo
Here

Definitions of
Money Laundering
processing of criminal
processing of criminal
proceeds
proceeds inin order
order to
to
disguise
disguise their
their illegal
illegal
origin
origin
legitimization
of
legitimization
of
proceeds
proceeds of
of specified
specified
unlawful
unlawfulactivity
activity
crime
crime whereby
whereby the
the
proceeds
of
an
proceeds
of
an
unlawful
unlawful activity
activity are
are
transacted
thereby
transacted
thereby
making
them
appear
making them appearto
to
have
originated
from
have originated from
legitimate
sources
legitimate
sources

Elements of the Crime of


Money Laundering
Monetary
Monetary

instrument
instrumentor
or
property
property(MI/P)
(MI/P)
from
froman
anunlawful
unlawful
activity
activity
Transaction/
Transaction/
Attempted
Attempted
transaction
transactionof
of
MI/P
MI/P
Knowledge that
Knowledge that
the
theMI/P
MI/P
represents,
represents,
involves,
involves,or
or

THE ANTI-MONEY
LAUNDERING ACT OF
2001

REPUBLIC ACT NO. 9160


as amended by
REPUBLIC ACT NO. 9194

Covered Institutions
1.

Banks,
non-banks,
quasibanks, trust entities, other
institutions
and
their
subsidiaries
and
affiliates
supervised or regulated by the
Bangko Sentral ng Pilipinas
(BSP);
7

Covered Institutions
2.

Insurance companies and all other


institutions supervised or regulated by
the Insurance Commission (IC); and

3. All those supervised or regulated by the


Securities and Exchange Commission
(SEC), including
securities dealers,
brokers, investment houses, trading
advisors,
and
other
entities
administering or otherwise dealing in
currency,
commodities
or
financial
derivatives based thereon.
8

Definition of Terms

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
9

Covered Transaction
Covered
transaction
a
transaction in cash or other
equivalent monetary instrument
involving a total amount in excess
of Five Hundred Thousand
Pesos (Php500,000.00) within
one (1) banking day.
10

Suspicious Transaction
Suspicious
transaction
a
transaction with a covered
institution, regardless of
the
amount
involved,
where any of the following
circumstances exist(s):
1.No underlying legal
or
trade
obligation,
purpose or economic
justification;

11

Suspicious
Transaction
2. Client is not properly identified;
3. Not commensurate with the business
or financial capacity of the client;

12

Suspicious Transaction
4. Structuring;
5. Deviation
from
profile;
6. Media reports;

the

7. Similar, analogous or
identical to any of the
foregoing.

13

Money Laundering Red


Flags General
1. Refusal or reluctance to proceed
with a transaction, or abruptly
withdrawing
a
transaction,
or
provide
information
or
identification.
2. Structured
or
recurring,
nonreportable transactions.
3. Multiple third parties conducting
separate,
but
related,
nonreportable transactions.
14

Money Laundering Red


Flags General
4. Transactions structured to lose the
paper trail.
5. Significant increases in the number
or amount of transactions.
6. Transactions
which
are
not
consistent with the customers
business or income level.
15

Money Laundering Red Flags


Other Activities Involving Customers
and/or Employees
1. Questions or discussion on how to avoid
reporting/recordkeeping
2. Customer attempt to influence an
employee not to file a report
3. Lavish
lifestyles
of
customers
or
employees
4. Short-term or no vacations
5. Circumvention
of
internal
control
procedures
6. Incorrect or incomplete CTRs
16

Unlawful activity (a.k.a.


predicate offense)
Unlawful activity refers
to any act or omission or
series
or
combination
thereof involving or having
direct
relation to the
following:
1.Kidnapping

for ransom
2.Drug Trafficking and
other violations of the
Comprehensive
Dangerous Drugs Act of

17

Unlawful activity (a.k.a.


predicate offense)
3.

4.

5.
6.

7.

Graft and Corruption


under R.A. No. 3019, as
amended
Plunder (R.A. No. 7080,
as amended)
Robbery and extortion
Jueteng and Masiao (PD
1602)
Piracy (RPC & PD 532)
18

Unlawful activity
(a.k.a. predicate
offense

8.

Qualified Theft under Art.


310, RPC

9.

Swindling under Art. 315,


RPC

10.Smuggling

under RA Nos.
455 & 1937

11.Violations

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

19

Unlawful activity (a.k.a.


predicate offense)
12.

Hijacking, destructive arson and


murder, including those perpetrated
by terrorists against non-combatant
persons and similar targets

20

Unlawful activity (a.k.a.


predicate offense)
13.

14.

Fraudulent
practices
and
other
violations
under
the
Securities
Regulation Code
of 2000 (RA 8799)
Felonies
or
offenses
of
a
similar
nature
that
are
punishable under

21

Money Laundering
Offenses / Penalties
Knowingly transacting or
attempting to transact any
monetary
instrument
or
property
(MI/P)
which
represents,
involves
or
relates to the proceeds of
any unlawful activity (UA)
(The money launderer
himself)
Penalty
. 7 to 14 years imprisonment
. Fine: not less than P 3
Million but not more than 2x
the value of the MI/P
1.

22

Money Laundering
Offenses / Penalties
Knowingly
performing
or
failing to perform an act in
relation to any MI/P involving
the proceeds of any UA as a
result of which he facilitated
the
offense
of
money
laundering
(The
person
who assists the money
launderer)
Penalty
. 4 to 7 years imprisonment
. Fine:
not less than P1.5
2.

23

Money Laundering
Offenses / Penalties
3.

For knowingly failing to


disclose and file with the
AMLC
any
monetary
instrument or property
required to be disclosed
and filed
Penalty
6
months
to
4
years
imprisonment
Fine:
not
less
than
P100,000.00 but not more
than P500,000.00,

24

Other Offenses under


R.A. 9160, as amended
1. For failure to keep
records
Records of all transactions
of covered institutions

Maintained
and
safely
stored for five (5) years
from
date
of
transaction/closure.
Penalty
6
months to 1 year
imprisonment
Fine:
not
less
than
P100,000.00 but not more

25

Other Offenses under


R.A. 9160, as amended
2. For malicious reporting

Reporting or filing a completely


unwarranted
or
false
information
relative
to
money
laundering
transaction against any person
Penalty
6 months to 4 years imprisonment
Fine: not less than P100,000.00 but not
more than P500,000.00;
Offender not entitled to the benefits of
the Probation Law.
26

Other Offenses under


R.A. 9160, as amended

Offender
is
a
corporation,
association,
partnership or any
juridical person

Penalty imposed
upon responsible
officers
who
participated in, or
allowed by their
gross negligence

27

Other Offenses under


R.A. 9160, as amended

Offender is a juridical
person - court may
suspend or revoke its
license.

Offender is an alien deported


without
further proceedings
after
serving
the
penalties prescribed.

28

Other Offenses under


R.A. 9160, as amended

Offender is a public official or


employee - perpetual or temporary
absolute disqualification from office
in addition to the penalties
prescribed

Public official or employee called to


testify and refuses purposely fails
to testify - suffer the same
penalties prescribed.
29

3. For breach of
confidentiality
Covered institutions 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 that a covered or suspicious
transaction report was made, the
contents thereof, or any other
information in relation thereto.
Neither may such reporting be published or
aired in any manner or form by the mass
media,
30
electronic mail or other similar devices.

Penalty
3 to 8 years imprisonment
and a fine of not less than
P500,000.00 but not more
than P1.0 Million.
concerned
officer
and
employee of the covered
institution and media (the
responsible
reporter,
writer,
president,
publisher, manager and
editor-in-chief) shall be

31

THE ANTI-MONEY
LAUNDERING COUNCIL
OF THE PHILIPPINES
(AMLC)
The Philippines Financial Intelligence
Unit
32

Composition
1. The BSP Governor
Chairman

as

2. The SEC Chairperson


Member

as

3. The IC Commissioner
Member

as

33

AMLC Secretariat
Executive Director

Technical Staff

Compliance and
Investigation Group

Legal Evaluation
Group

Information
Management and
Analysis Group

Administrative and
Finance Group
34

Functions of the
AMLC
(1) to require
submission of
and receive
covered or
suspicious
transaction
reports from
covered
institutions
(Secs 7[1] &
9[c].

35

Functions of the
AMLC
(2)

to issue orders addressed to the


appropriate Supervising Authority or
the covered institution to determine
the true identity of the owner of any
monetary instrument or property
(Sec. 7[2]

36

Functions of the
AMLC
(3)

(4)

to
institute
civil
forfeiture proceedings
and all other remedial
proceedings
through
the
Office
of
the
Solicitor General.
to cause the filing of
complaints with the
Department of Justice
or the Ombudsman for
the
prosecution
of
money
laundering

37

Functions of the
AMLC
(5) to
investigate
suspicious
transactions
and
covered
transactions
deemed
suspicious
after
an
investigation by AMLC, money
laundering activities, and other
violations of this Act.

38

Functions of the
AMLC
(6) to apply before the Court of
Appeals, ex parte, for the
freezing of any monetary
instrument
or
property
alleged to be the proceeds of
any unlawful activity as
defined
in
Section
3(i)
hereof.

39

What can be
frozen?

Monetary Instruments
Coins, currency of legal tender,
drafts, checks, notes, securities,
negotiable
instruments,
bonds,
commercial
papers,
deposit
certificates,
trust
certificates,
transaction tickets, confirmation of
sale or investments, money market
instruments,
other
similar
instruments where title thereto
passes to another by endorsement,
40

What can be
frozen?

Property as defined under


the Civil Code
Art. 414. All things which are or may
be the object of appropriation are
considered either:
(1) immovable or real property; or
(2) movable or personal property.
41

What can be
frozen?

Related Web of Accounts Rule


10.4
Related web of accounts pertaining to
the monetary instrument of property
subject of the freeze order is defined
as those 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.
42

Functions of the
AMLC
(7) to implement such measures as
may be necessary and justified
under this Act to counteract
money laundering.
(8) to receive and take action in
respect of, any request from
foreign states for assistance in
their own anti-money laundering
operations provided in this Act.
43

Functions of the
AMLC
(9) 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

44

Functions of the
AMLC
(10)to enlist the assistance of any
branch, department, bureau, office,
agency or instrumentality of the
government, including governmentowned and controlled corporations,
in undertaking any and all antimoney 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
45

Functions of the
AMLC
(11) to impose administrative
sanctions for the violation
of laws, rules, regulations
and
orders
and
resolutions
issued
pursuant thereto.

46

AMLC Special Powers

To inquire into bank/NBFI


deposits/investments
- without a court order
- with a court order
To cause a freeze/restraint on
suspected dirty money/property
- freeze order
To cause forfeiture of dirty
money/property
To implement necessary/justified
measures to counteract money
laundering
47

AMLC Authority to Inquire


with or Without Court Order
(Sec. 11)

To inquire into or examine any


particular deposits or investments
upon order of a competent court, except
in cases where the unlawful activity
involves Kidnapping for Ransom (KFR),
drug-related cases and terrorist related
cases.
AMLC Resolution
KFR
Drugs-related
Terrorist-related

Court Order
the rest of the
predicate crimes
under Sec.
3 (i)
48

Bangko Sentral ng
Pilipinas (BSP)
To ensure compliance with this Act,
the Bangko Sentral ng Pilipinas
(BSP) may inquire into or examine
any deposit or investment with
any banking institution or nonbank financial institution when
the examination is made in the
course of a periodic or special
examination, in accordance with
the rules of examination of the
BSP.
49

Freezing of Monetary
Instrument or
Property

AMLC Resolution authorizing the


filing of a petition for freeze order
before the Court of Appeals (CA).
Freeze Order
Effective immediately
Initial duration of twenty (20) days
summary hearing to determine
whether to modify, lift or extend
May be extended by the CA for a
period not exceeding six (6)
months
50

Duty of Covered
Institutions Upon Receipt
of Freeze Order
Immediately
freeze
the
monetary
instrument or property and related web
of accounts;
Within 24 hours, Covered Institutions
(CIs) shall submit to the Court of Appeals
and the AMLC, by personal delivery, a
detailed written return on the freeze
order
Account numbers
Name(s) of account holders
Amount
51

Extension of the
Freeze Order

Immediately furnish a copy of the


notice of the freeze order upon the
owner or holder;

The CI shall not lift the effects of the


freeze
order
without
securing
official confirmation from the AMLC.

52

3 Major Requirements for


Compliance by CIs
1. Customer
identification and
due diligence
2. Record-keeping
3. Reporting of
suspicious and
covered transactions

53

Customer Identification /
Know Your Customer (KYC)
One (1) valid photo-bearing ID
issued by an official authority.
Maintain accounts only in the true
and full name of the account owner
or holder.
Not allow opening and creation of
new accounts without face-to-face
contact and full compliance with the
requirements
on
minimum
information/
documents,
for
individual customers.
54

INDIVIDUAL CUSTOMERS
Covered institutions shall require individual
customers to produce:
1.

original documents of identity issued by


an
official
authority,
bearing
a
photograph of the customer, i.e.,
identity cards and passports.

55

INDIVIDUAL CUSTOMERS
Minimum information/documents
required:

Name
Present address
Permanent address
Date and place of birth
Nationality
Nature of work and name of employer or nature of
self-employment/business
Contact numbers
TIN, SSS No., GSIS No.
Specimen signature
Source of fund(s), and
56
Names of beneficiaries in case of insurance
contracts
and whenever applicable.

CORPORATE AND JURIDICAL


CUSTOMERS

1.

2.

3.

Covered institutions shall endeavor to


ensure that a:
corporate juridical entity has not been
or is not being dissolved, wound up or
voided.
its business or operations has not
been or is not being closed, shut
down, phased out, or terminated.
Shell companies should be dealt with
extreme caution.
57

CORPORATE AND JURIDICAL


CUSTOMERS
Minimum information/documents
required:
1.
2.
3.
4.
5.
6.
7.
8.

Articles of Incorporation/Partnership
By-laws
Official address/principal business address
List of directors/partners
List of principal stockholders owning at least 2% of
the capital stock
Contact numbers
Beneficial owners, if any; and
Verification of the authority and identification of the
person purporting to act on behalf of the client.
58

AMLC Resolution No. 8 dated


20 February 2008
Clients who engage in a financial
transaction with covered institution for
the first time shall be required to
present the original and submit a CLEAR
copy of at least ONE (1) valid photobearing identification document issued by
an official authority.

59

AMLC Resolution No. 8 dated


20 February 2008
The term OFFICIAL AUTHORITY shall
refer to any of the following:
i.

Government
Philippines;

of

the

Republic

ii.

Its
political
instrumentalities;

iii.

Government-owned
and/or
corporations (GOCCs); and

subdivisions

of

the
and

controlled
60

AMLC Resolution No. 8 dated


20 February 2008
Valid IDs:

Passport including those issued by foreign governments


Drivers license
Professional Regulations Commission (PRC) ID
National Bureau of Investigation (NBI) clearance
Police clearance
Postal ID
Voters ID
Barangay certification
Government Service and Insurance System (GSIS) e-Card
Social Security System (SSS) card
Senior Citizen Card
Overseas Workers Welfare Administration (OWWA) ID
61
OFW ID

AMLC Resolution No. 8 dated


20 February 2008
Valid IDs:

Seamans Book
Alien Certification of Registration/Immigrant Certificate
of Registration
Government Office and GOCC ID e.g. Armed Forces of the
Philippines (AFP), Home Development Mutual Fund (HDMF)
Certification from the National Council for the Welfare of
Disabled Persons (NCWDP)
Department of Social Welfare and Development (DSWD)
Certification
Integrated Bar of the Philippines ID
Company issued by private entities or institutions
registered with or supervised or regulated either by the
BSP, SEC or IC
62

Failure to Observe KYC


Not a crime under the AMLA or
the UARR, only an administrative
offense.
However,
knowingly
failing
to
observe KYC
which leads
to
knowingly failing to file an STR is a
criminal offense under Sec. 4(c) of
the AMLA, as amended.
63

RECORD-KEEPING
REQUIREMENTS

Maintain and safely store all


records of all transactions
for
5 years from
transaction date.

Records/files contain full


and true identity of the
owners/holders
of
the
accounts

Ensure confidentiality

64

RECORD-KEEPING
REQUIREMENTS

Closed accounts - preserve and safely


store records for at least 5 years
from closure dates.

Money laundering case filed in court retain until case has been finally
resolved or terminated by the
court.

Retain records as originals in such


forms as are admissible in court.
65

Reporting of Covered and


Suspicious Transactions
Covered transactions and suspicious
transactions = within five (5) working
days from occurrence unless the
supervising authority authorizes a
longer period not exceeding ten (10)
working days

Transaction determined to be
both a covered transaction and a
suspicious transaction = report
the
same
as
a
suspicious
transaction

66

Circular No. 706, dated 5 January


2011
Updated Anti-Money Laundering Rules and
Regulations (UARR)
Extended

the deadline for the


submission of CTR and STR to the AMLC
by all banks and non-bank financial
institutions under the supervision and
regulation of the BSP from five (5)
working days to ten (10) working
days from occurrence thereof.

67

Safe Harbor Provision

When
reporting
covered
or
suspicious transactions to the
AMLC, covered institutions and
their officers and employees
shall not be deemed to have
violated Republic Act No. 1405, as
amended, Republic Act No. 6426, as
amended, Republic Act No. 8791 and
other similar laws. [Sec. 4(c) of the
AMLA, as amended and X807.5, BSP
68

OTHER AMLA COMPLIANCE


REQUIREMENTS
Covered institutions shall formulate their
respective money laundering prevention
programs in accordance with the AMLA,
including, but not limited to:
information dissemination on money
laundering activities and its prevention,
detection, and reporting; and
training of responsible officers and
personnel of covered institutions.
69