Anti-Money Laundering

Act
(RA 9160) July 23, 2001
As amended by RA 9194, 10167, 10168 & 10365
Trivia...

How was the

term“money
laundering”
coined????
Major Timelines in the History of Phil. Anti-
Money Laundering Law
1988 - United Conventions against the Illicit Traffic in Narcotic Drugs and
Psychotropic Substances (Vienna Convention)
1989 - FATF was convened by the G7-Summit
2000 - Philippines was listed among the Non-Cooperating Countries and Territories
issued by the FATF
2001 - Philippines enacted RA 9160 (Anti-Money Laundering Act)
2002 - RA 9194, amendments (i.e. definition of covered transaction (lowering the
amount and period) and introduction of the concept of “suspicious transaction”)
2011 - RA 10167, amendments (i.e. removal of the power of AMLA to issue freeze
order and guidelines in bank inquiries)
2012 - RA 10365, amendments (i.e. broadening of the definition of “covered
persons” ; additional crimes included as “unlawful activity” ; broadening of the
definition of “money laundering offense”)
2016 - RA 10927, amendments (i.e. inclusion of casinos etc. in the list of “covered
persons”, inclusion of casino transactions in the list of “covered transactions”)
Definition
• Money Laundering is the process by which a
person conceals the existence of unlawfully
obtained money and make it appear to have
originated from lawful sources.
• The intention behind such a transaction is to
hide the beneficial owner of said funds and
allows criminal organizations or criminals to
enjoy the proceed of such criminal activities
Nature & Purpose
• To protect and preserve the integrity and confidentiality of
bank accounts
• To ensure that the Philippines shall not be used as a
money laundering site
• To extend cooperation in transnational investigations and
prosecutions of persons involved in money laundering
activities wherever committed.

SEC. 2. Declaration of Policy

Structure of Anti-Money Laundering Council

Governor of the Bangko

Sentral ng Pilipinas
CHAIRMAN

Commissioner of the Chairman of the Securities

Insurance Commission and Exchange Commission
MEMBER MEMBER
Functions of the AMLC
(1) to require and receive covered transaction reports from covered
institutions;
(2) to issue orders …to determine the true identity of the owner of
any monetary instrument or property subject of a covered
transaction report
(3) to institute civil forfeiture proceedings ;
(4) to cause the filing of complaints
(5) to initiate investigations of covered
6. To freeze any monetary instrument or property
7. to implement such measures to counteract money
laundering;
8. to receive and take action in respect of, any request from
foreign states for assistance;
9. to develop educational programs on the pernicious effects of
money laundering,
10. to enlist the assistance of any branch, department, bureau,
office, agency or instrumentality of the government, in
undertaking any and all anti-money laundering operations
Covered Persons (natural or juridical)
1. Banks, non-banks, quasi-banks, trust entities, foreign exchange dealers,
pawnshops, money changers, remittance and transfer companies and
other similar entities and all other persons and their subsidiaries and
affiliates supervised or regulated by the Bangko Sentral ng Pilipinas
(BSP);
2. Insurance companies, pre-need companies and all other persons
supervised or regulated by the Insurance Commission (IC);
3. (i) securities dealers, brokers, salesmen, investment houses and other
similar persons managing securities or rendering services as investment
agent, advisor, or consultant,
(ii) mutual funds, close-end investment companies, common trust
funds, and other similar persons, and
(iii) 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 or regulated by the Securities and Exchange Commission
(SEC);
Covered Persons (natural or juridical)
4. jewelry dealers in precious metals for transactions in excess of One
million pesos (P1,000,000.00);
5. jewelry dealers in precious stones for transactions in excess of One
million pesos (P1,000,000.00);
6. 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;
(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; and
Covered Persons (natural or juridical)
7. Persons who provide any of the following services:
(i) managing of client money, securities or other assets;
(ii) management of bank, savings or securities accounts;
(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
8. casinos, including internet and ship-based casinos, with respect to
their
casino cash transactiotus related to they gaming operations

***Covered persons’ shall exclude lawyers and accountants 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
Unlawful Activities
1. Kidnapping for ransom RPC Art. 267
2. Sections 4, 5, 6, 8, 9, 10, 11, 12, 13, 14, 15 and 16 of
Comprehensive Dangerous Drugs Act of 2002;
3. Anti-Graft and Corrupt Practices Act;
4. Plunder under Republic Act No. 7080, as amended;
5. Robbery and extortion under Articles 294, 295, 296, 299,
300, 301 and 302 of the Revised Penal Code, as amended;
6. Jueteng and Masiao punished as illegal gambling under
Presidential Decree No. 1602;
7. Piracy on the high seas under the Revised Penal Code, as
amended and Presidential Decree No. 532;
Unlawful Activities
8. Qualified theft - RPC Article 310
9. Swindling – RPC Article 315
10. Smuggling under R.A. Nos. 455 and 1937;
11. Violations of the Electronic Commerce Act of 2000.
12. Hijacking and other violations under Republic Act No.
6235; destructive arson and murder, as defined under the
Revised Penal Code, as amended;
13. Terrorism and conspiracy to commit terrorism under
Sections 3 and 4 of Republic Act No. 9372;
14. 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:
Unlawful Activities
15. Bribery – RPC Articles 210, 211 and 211-A,
16. Frauds and Illegal Exactions and Transactions – RPC Articles
213, 214, 215 and 216
17. Malversation of Public Funds and Property – RPC Articles
217 and 222;
18. Forgeries and Counterfeiting – RPC Articles 163, 166, 167,
168, 169 and 176;
19. Violations of Anti-Trafficking in Persons Act of 2003;
20. Violations of Revised Forestry Code of the Philippines, as
amended;
21. Violations the Philippine Fisheries Code of 1998;
22. Violations of Philippine Mining Act of 1995;
Unlawful Activities
23. Violations of the Wildlife Resources Conservation and
Protection Act;
24. Violation of he National Caves and Cave Resources
Management Protection Act;
25. Violation of the Anti-Carnapping Act of 2002, as amended;
26. Violations of the Laws on Illegal/Unlawful Possession,
Manufacture, Dealing In, Acquisition or Disposition of
Firearms, Ammunition or Explosives;
27. Violation of the Anti-Fencing Law;
28. Violation of Migrant Workers and Overseas Filipinos Act of
1995, as amended by Republic Act No. 10022;
Unlawful Activities
29. Violation of the Intellectual Property Code of the
Philippines;
30. Violation of Anti-Photo and Video Voyeurism Act of 2009;
31. Violation of the Anti-Child Pornography Act of 2009;
32. Violations of the Special Protection of Children Against
Abuse, Exploitation and Discrimination;
33. Fraudulent practices and other violations under Republic
Act No. 8799, otherwise known as the Securities
Regulation Code of 2000; and
34. Felonies or offenses of a similar nature that are punishable
under the penal laws of other countries.”
Covered Transactions

'Covered transaction' is a transaction in cash or other equivalent

monetary instrument involving a total amount in excess of Five
hundred thousand pesos (P500,000.00) within one (1) banking
day."

Exceptions: a covered institution and a person who, at the time of

the transaction was a properly identified client and the amount is
commensurate with the business or financial capacity of the client;
or those with an underlying legal or trade obligation, purpose,
origin or economic justification.
Suspicious
Transactions
1. There is no underlying legal or trade obligations, purpose or
economic justification;
2. The client is not properly identified;
3. The amount involved is not commensurate with the business or
financial capacity of the client
4. 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 act
5. 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 institution.
6. The transaction is in any way related to an unlawful activity or
offense that is about to be, is being or has committed
7. Any transaction that is similar or analogous to any of the foregoing.
Freeze Order & Exceptions
• Verified ex parte petition by the AMLC
• Probable cause exists
• Court of Appeals may issue a freeze order
• Effective immediately, and which shall not exceed six (6)
months depending upon the circumstances of the case:
• If no case filed against a person whose account has been
frozen within the period determined by the court, the
freeze order shall be deemed ipso facto lifted.
• 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.
• “No court shall issue a temporary restraining order or a writ
of injunction against any freeze order, except the Supreme
Court.”
SEC. 10. Freezing of Monetary Instrument or
Property. –
KYC Policy - Tool for AMLA
• Face-to-face client interaction
• Proper identification documents
• Verification of source of fund - nature of
business/occupation
Latest Jurisprudence
GR No. 186717 & 190357
Republic of the Philippines (represented by AMLC) vs. Jocelyn Bolante et.al.
“The Fertilizer Fund Scam”

Doctrine:
In the issuance of a bank inquiry order, the power to determine the existence of probable cause is
lodged in the trial court. As we ruled in Eugenio:

Section 11 itself requires that it be established that "there is probable cause that the deposits or
investments are related to unlawful activities," and it obviously is the court which stands as arbiter
whether there is indeed such probable cause. The process of inquiring into the existence of probable
cause would involve the function of determination reposed on the trial court. Determination clearly
implies a function of adjudication on the part of the trial court, and not a mechanical application of a
standard pre-determination by some other body. The word "determination" implies deliberation and is,
in normal legal contemplation, equivalent to "the decision of a court of justice."

The court receiving the application for inquiry order cannot simply take the AMLC's word that probable
cause exists that the deposits or investments are related to an unlawful activity. It will have to exercise
its own determinative function in order to be convinced of such fact.
Bar Question - 2006
Rudy is jobless but is reputed to be a jueteng operator. He has never been charged
or convicted of any crime. He maintains several bank accounts and has purchased 5
houses and lots for his children from the Luansing Realty I Inc. Since he does not
have any visible job, the company reported his purchases to the Anti-Money
Laundering Council (AMLC). Thereafter, AMLC charged him with violation of the
Anti-Money Laundering Law. Upon request of the AMLC, the bank disclosed to it
Rudy's bank deposits amounting to P100 Million. Subsequently, he was charged in
court for violation of the Anti-Money Laundering Law.
1. Can Rudy move to dismiss the case on the ground that he has no criminal
record?
2. To raise funds for his defense, Rudy sold the houses and lots to a friend. Can
Luansing Realty, Inc. be compelled to transfer to the buyer ownership of the houses
and lots? 2.5%
3. In disclosing Rudy's bank accouts to the AMLC, did the bank violate any law?
2.5%
4. Supposing the titles of the houses and lots are in possession of the Luansing
Realty I Inc., is it under obligation to deliver the titles to Rudy? 2.5%