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ANTI –MONEY

LAUNDERING ACT
(AMLA)
Republic Act 9160 as Amended by Republic Act 9194
Strengthen by RA 10167 & RA 10365
Further amended by RA 10927
Anti Money Laundering Laws

R.A. 9160 (2001)


R.A. 9194
IMPLEMENTING RULES (2003)
AND REGULATIONS AN ACT AMENDING
REPUBLIC ACT NO. REPUBLIC ACT NO.
9160 March 8, 2002 9160, OTHERWISE
ANTI-MONEY
LAUNDERING ACT OF
KNOWN AS THE
2001 "ANTI-MONEY
LAUNDERING ACT
OF 2001"

R.A.10167 R.A. 10365


(2012) R.A. 10927
(2013) (2017)
AN ACT TO FURTHER
AN ACT FURTHER
STRENGTHEN THE ANTI- AN ACT DESIGNATING
MONEY LAUNDERING LAW,
STRENGTHENING THE
CASINOS AS COVERED
AMENDING FOR THE ANTI-MONEY LAUNDERING
PERSONS UNDER
PURPOSE SECTIONS 10 AND LAW, AMENDING FOR THE
REPUBLIC ACT NO. 9160,
11 OF REPUBLIC ACT NO. PURPOSE REPUBLIC ACT
OTHERWISE KNOWN AS
9160, OTHERWISE KNOWN NO. 9160, OTHERWISE
THE “ANTI-MONEY
AS THE ANTI-MONEY KNOWN AS THE "ANTI-
LAUNDERING ACT OF 2001,
LAUNDERING ACT OF
MONEY LAUNDERING ACT
AS AMENDED, AND FOR 2001”, AS AMENDED
OF 2001″, AS AMENDED
OTHER PURPOSES
Basic Policy
 – It is hereby declared the policy of the State to protect the
integrity and confidentiality of bank accounts and to ensure
that the Philippines shall not be used as a money-laundering
site for the proceeds of any unlawful activity.

 Consistent with its foreign policy, the Philippines shall extend


cooperation in transnational investigations and prosecutions of
persons involved in money laundering activities wherever
committed.
What is Money Laundering?

 Money laundering is a crime whereby the


proceeds of an unlawful activity are
transacted, thereby making them appear to
have originated from legitimate sources.
Money Laundering Offense. – Money laundering is
committed by: (Sec 4.)
 A. Any person who, knowing that any monetary instrument or property represents,
involves, or relates to the proceeds of any unlawful activity:
 "(a) transacts said monetary instrument or property;
 "(b) converts, transfers, disposes of, moves, acquires, possesses or uses said
monetary instrument or property;
 "(c) conceals or disguises the true nature, source, location, disposition, movement or
ownership of or rights with respect to said monetary instrument or property;
 "(d) attempts or conspires to commit money laundering offenses referred to in
paragraphs (a), (b) or (c);
 "(e) aids, abets, assists in or counsels the commission of the money laundering
offenses referred to in paragraphs (a), (b) or (c) above; and
 "(f) performs or fails to perform any act as a result of which he facilitates the offense
of money laundering referred to in paragraphs (a), (b) or (c) above.
 B. Any covered person who, knowing that a covered or suspicious
transaction is required under this Act to be reported to the Anti-Money
Laundering Council (AMLC), fails to do so.
Persons liable:
 “Person” refers to any natural or juridical person.
 “Covered Persons” refers to the following:
1. Persons supervised or regulated by BSP, such as:
 a. Banks;
 b. Non-banks;
 c. Quasi-banks;
 d. Trust entities;
 e. Pawnshops;
 f. Non-stock savings and loan associations;
 g. Electronic money issuers; and
 h. All other persons and their subsidiaries and affiliates supervised or regulated
by the BSP.
+ Including foreign exchange dealers, money changers, and remittance and
transfer companies are covered persons under the supervision of the BSP.
 2. Persons supervised or regulated by IC, such as:
 a. Insurance companies;
 b. Pre-need companies;
 c. Insurance agents;
 d. Insurance brokers;
 e. Professional reinsurers;
 f. Reinsurance brokers;
 g. Holding companies;
 h. Holding company systems;
 i. Mutual benefit associations; and
 j. All other persons and their subsidiaries and affiliates supervised or regulated by
the IC.
 3. Persons supervised or regulated by SEC, such as:
 a. Securities dealers, brokers, salesmen, investment houses, and other
similar persons managing securities or rendering services, such as
investment agents, advisors, or consultants.
 b. mutual funds or open-end investment companies, close-end investment
companies or issuers, and other similar entities;
 c. other entities, administering or otherwise dealing in commodities, or
financial derivatives based thereon, valuable objects, cash substitutes,
and other similar monetary instruments or properties, supervised or
regulated by the SEC.
4. The following Designated Non-Financial Businesses andProfessions (DNFBPs):
 a. Jewelry dealers, dealers in precious metals, and dealers in precious stones.
 b. 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.
 c. Persons, including lawyers and accountants, who provide any of the ff services:
 i. Managing of client money, securities or other assets;
 ii. Management of bank, savings, securities or other assets;
 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.
 d. Casinos, including internet-based casinos and ship-based casinos, with
respect to their casino cash transactions related to their gaming operations.

 The “Casino Implementing Rules and Regulations of Republic Act No.


10927” shall govern the implementation of the AMLA with regard to
casinos, unless, otherwise indicated therein by the AMLC and the AGAs
NOT COVERED PERSONS: (EXEMPTED FROM REPORTING)

 Lawyers and accountants who are:


 (1)authorized to practice their profession in the Philippines; and
 (2)engaged as independent legal or accounting professionals, in
relation to information concerning their clients, or where
disclosure of information would compromise client confidences
or the attorney-client relationship
COVERED TRANSACTION
 1. A transaction in cash or other equivalent monetary instrument exceeding
Five Hundred Thousand pesos (Php500,000.00);

 2. A transaction with or involving jewelry dealers, dealers in precious metals


and dealers in precious stones in cash or other equivalent monetary instrument
exceeding One Million pesos (Php1,000,000.00)

 3. A casino cash transaction exceeding Five Million Pesos (Php 5,000,000.00) or


its equivalent in other currency.
SUSPICIOUS TRANSACTIONS
REGARDLESS OF AMOUNT, where any of the following circumstances exists:
 1. there is no underlying legal or trade obligation, 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 AMLA;
SUSPICIOUS TRANSACTION
 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 person;
 6. the transaction is in any way related to an unlawful activity or any money
laundering activity or offense that is about to be committed, is being or has
been committed; or
 7. any transaction that is similar, analogous or identical to any of the
foregoing
“UNLAWFUL ACTIVITY” = PREDICATE CRIMES
(Sec. 3(i) RA9160 amended by Sec 2. RA10365)

 any act or omission, or series or combination thereof, involving or having direct


relation, to the following:

 1. “Kidnapping for Ransom”


 2. violation of “Comprehensive Dangerous Drugs Act of 2002”;
 3. “Anti-Graft and Corrupt Practices Act”;
 4. “Plunder”
 5. “Robbery” and “Extortion”
 6. “Jueteng” and “Masiao”
 7. “Piracy on the High Seas”
 8. “Qualified Theft”
 9. “Swindling” under Article 315 and “Other Forms of Swindling” under Article 316 of
the Revised Penal Code
“UNLAWFUL ACTIVITY” = PREDICATE CRIMES
 10. “Smuggling” under the “Tariff and Customs Code of the Philippines”;
 11. Violations under “Electronic Commerce Act of 2000”;
 12. “Hijacking” and other violations the “Anti-Hijacking Law”; “Destructive
Arson”; and “Murder”, as defined under the Revised Penal Code, as amended;
 13. “Terrorism” and “Conspiracy to Commit Terrorism”;
 14. “Financing of Terrorism” under the “Terrorism Financing Prevention and
Suppression Act of 2012”;
 15. “Bribery”;
 16. “Frauds and Illegal Exactions and Transactions;
 17. “Malversation of Public Funds and Property” under the Revised Penal Code
 18. “Forgeries” and “Counterfeiting” under the Revised Penal Code
“UNLAWFUL ACTIVITY” = PREDICATE CRIMES
Violation/s of:
 19. Anti-Trafficking in Persons Act of 2003
 20. Revised Forestry Code of the Philippines
 21. Philippine Fisheries Code of 1998;
 22. Philippine Mining Act of 1995;
 23. Wildlife Resources Conservation and Protection Act;
 24. National Caves and Cave Resources Management Protection Act;
 25. Anti-Carnapping Act of 2002;
UNLAWFUL ACTIVITY” = PREDICATE CRIMES
Violation/s of:
 26. Codifying the Laws on Illegal/Unlawful Possession, Manufacture, Dealing In,
Acquisition or Disposition of Firearms, Ammunition or Explosives;
 27. Anti-Fencing Law;
 28. Migrant Workers and Overseas Filipinos Act of 1995, as amended;
 29. “Intellectual Property Code of the Philippines;
 30. Anti-Photo and Video Voyeurism Act of 2009;
 31. Anti-Child Pornography Act of 2009;
 32. 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."
Money Laundering
Cycle
Initial entry of the "dirty"
cash or proceeds of crime
into the financial system.

PLACEMENT Separate the illicit


money from its
source

Collection of dirty money (Unlawful Act)


Money Laundering
Cycle Payment by “Y” of
False Invoices to
Transfer on the Bank
Account of Company
“X”
Company “X”

X
Purchase of
Luxury Assets,
Financial
Returned to the criminal Y
Investments,
Commercial/ from what seem to be
Industrial legitimate sources Loan to Company “Y”
Investments
Wire Transfer
INTEGRATION
Initial entry of the "dirty"
cash or proceeds of crime
into the financial system.

PLACEMENT

The placement stage represents the initial entry of


the "dirty" cash or proceeds of crime into the
financial system. Generally, this stage serves two
Collection of dirty money (Unlawful Act) purposes:
 (a) it relieves the criminal of holding and
guarding large amounts of bulky of cash; and
 (b) it places the money into the legitimate
financial system.
It is during the placement stage that money
launderers are the most vulnerable to being
caught. This is due to the fact that placing large
amounts of money (cash) into the legitimate
financial system may raise suspicions of officials.
 For example, cash could be packed into a suitcase and smuggled to a country,
or the launderer could use smurfs to defeat reporting threshold laws and avoid
suspicion.
 A smurf is a colloquial term for a money launderer, or one who seeks to
evade scrutiny from government agencies by breaking up a transaction
involving a large amount of money into smaller transactions below the
reporting threshold.
Some other common methods include:
 1. Currency Smuggling – This is the physical illegal movement of currency and monetary
instruments out of a country. The various methods of transport do not leave a discernible audit
trail.
 2. Bank Complicity – This is when a financial institution, such as banks, is owned or controlled
by unscrupulous individuals suspected of conniving with drug dealers and other organised crime
groups. This makes the process easy for launderers. The complete liberalisation of the financial
sector without adequate checks also provides leeway for laundering.
 3. Currency Exchanges – In a number of transitional economies the liberalisation of foreign
exchange markets provides room for currency movements and as such laundering schemes can
benefit from such policies.
 4. Securities Brokers – Brokers can facilitate the process of money laundering through
structuring large deposits of cash in a way that disguises the original source of the funds.
 5. Blending of Funds – The best place to hide cash is with a lot of other cash. Therefore,
financial institutions may be vehicles for laundering. The alternative is to use the money from
illicit activities to set up front companies. This enables the funds from illicit activities to be
obscured in legal transactions.
 6. Asset Purchase – The purchase of assets with cash is a classic money laundering method. The
major purpose is to change the form of the proceeds from conspicuous bulk cash to some equally
valuable but less conspicuous form.
Initial entry of the "dirty"
cash or proceeds of crime
into the financial system.

PLACEMENT Separate the illicit


money from its
source

Collection of dirty money (Unlawful Act)


Transfer on the Bank
Payment by “Y” of Account of Company
False Invoices to “X”
 After placement comes the layering stage Company “X”
(sometimes referred to as structuring). The X
layering stage is the most complex and often
entails the international movement of the
Y
funds. The primary purpose of this stage is to
separate the illicit money from its source. Loan to Company “Y”
This is done by the sophisticated layering of Wire Transfer
financial transactions that obscure the audit
trail and sever the link with the original
crime.
LAYERING
 During this stage, for example, the money launderers may begin by moving funds
electronically from one country to another, then divide them into investments
placed in advanced financial options or overseas markets; constantly moving them
to elude detection; each time, exploiting loopholes or discrepancies in legislation
and taking advantage of delays in judicial or police cooperation.
 1.Cash converted into Monetary Instruments – Once the placement is successful
within the financial system by way of a bank or financial institution, the proceeds
can then be converted into monetary instruments. This involves the use of
banker’s drafts and money orders.
 2.Material assets bought with cash then sold – Assets that are bought through illicit
funds can be resold locally or abroad and in such a case the assets become more
difficult to trace and thus seize.
Initial entry of the "dirty"
cash or proceeds of crime
into the financial system.

PLACEMENT Separate the illicit


money from its
source

Collection of dirty money (Unlawful Act)


Transfer on the Bank
Payment by “Y” of Account of Company
False Invoices to “X”
Company “X”

X
Purchase of
Luxury Assets,
Financial
Returned to the criminal Y
Investments,
Commercial/ from what seem to be
Industrial legitimate sources Loan to Company “Y”
Investments
Wire Transfer
INTEGRATION
INTEGRATION
 The final stage of the money laundering process is termed the integration
stage. It is at the integration stage where the money is returned to the
criminal from what seem to be legitimate sources. Having been placed
initially as cash and layered through a number of financial transactions, the
criminal proceeds are now fully integrated into the financial system and can
be used for any purpose.

 There are many different ways in which the laundered money can be
integrated back with the criminal; however, the major objective at this stage
is to reunite the money with the criminal in a manner that does not draw
attention and appears to result from a legitimate source. For example, the
purchases of property, art work, jewelry, or high-end automobiles are
common ways for the launderer to enjoy their illegal profits without
necessarily drawing attention to themselves.
 1.Property Dealing – The sale of property to integrate laundered money back
into the economy is a common practice amongst criminals. For instance, many
criminal groups use shell companies to buy property; hence proceeds from the
sale would be considered legitimate.
 2.Front Companies and False Loans – Front companies that are incorporated in
countries with corporate secrecy laws, in which criminals lend themselves
their own laundered proceeds in an apparently legitimate transaction.
 3.Foreign Bank Complicity – Money laundering using known foreign banks
represents a higher order of sophistication and presents a very difficult target
for law enforcement. The willing assistance of the foreign banks is frequently
protected against law enforcement scrutiny. This is not only through criminals,
but also by banking laws and regulations of other sovereign countries.
 4.False Import/Export Invoices – The use of false invoices by import/export
companies has proven to be a very effective way of integrating illicit proceeds
back into the economy. This involves the overvaluation of entry documents to
justify the funds later deposited in domestic banks and/or the value of funds
received from exports.
Initial entry of the "dirty"
cash or proceeds of crime Layering $6 Michael
into the financial system. Cruz
Separate
PLACEMENT Transferred to the illicit $30 Jessie Christopher
RCBC money Lagrosas
from its
source $20 Alfred Vergara

Transferred to Sri
Lanka $25 Enrico Vasquez
Heist of the Bangladesh Bank

Bank Account
William Go &
Transferred to his company “
Midas Hotel and Centurytex
Casino, City of $63
Trading”
Dreams and

h
s
a
C
Philrem
Solaire Resort
$7
Kim Wong and Casino Transferred to Go
Philrem Services
Corporation
owned by
Bautista
ANTI-MONEY LAUNDERING COUNCIL
(AMLC)- Sec 7 RA 9160; Sec 5 RA 9194

Chairman:
Governor of the BSP

Member:
Member:
Commissioner of the IC
Chairman of the SEC
Unanimous Decision

The AMLC shall act


unanimously in the discharge
of its functions
 "(1) to require and receive covered or suspicious transaction
reports from covered institutions;

 "(2) to issue orders addressed to the appropriate Supervising


Authority or the covered institutions to determine the true
identity of the owner of any monetary instrument or property
subject of a covered transaction or suspicious transaction report
or request for assistance from a foreign State, or believed by the
Council, on the basis for substantial evidence, to be, in whole or
in part, wherever located, representing, involving, or related to
directly or indirectly, in any manner or by any means, the
proceeds of an unlawful activity.
 "(3) to institute civil forfeiture proceedings 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 this Act;

 "(6) to apply before the Court of Appeals, ex parte, for the


freezing of any monetary instrument or property alleged to be
laundered, proceeds from, or instrumentalities used in or
intended for use in any unlawful activity as defined in Section
3(i) hereof;
 "(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;
 "(9) to develop educational programs on the pernicious
effects of money laundering, the methods and
techniques used in the money laundering, the viable
means of preventing money laundering and the effective
ways of prosecuting and punishing offenders;
 "(10) to enlist the assistance of any branch, department,
bureau, office, agency, or instrumentality of the government,
including government-owned and -controlled corporations, 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; and
 "(11) to impose administrative sanctions for the violation of
laws, rules, regulations, and orders and resolutions issued
pursuant thereto."
 "(12) to require the Land Registration Authority and
all its Registries of Deeds to submit to the AMLC,
reports on all real estate transactions involving an
amount in excess of Five hundred thousand pesos
(P500,000.00) within fifteen (15) days from the date
of registration of the transaction, in a form to be
prescribed by the AMLC. The AMLC may also require
the Land Registration Authority and all its Registries
of Deeds to submit copies of relevant documents of
all real estate transactions."
SECTION 9 RA 9190; amended by
Sec 6 RA 9194
Prevention of Money Laundering;
Customer Identification Requirements
and Record Keeping
CUSTOMER DUE DILIGENCE
 a risk-based approach shall be undertaken
depending on the type of customer, business
relationship, or nature of the product, transaction
or activity

 1. Customer Identification
 Use of two new facilities which would allow
covered persons to upload know-your-customer
(KYC) documents for STRs as well as e-returns
via the AMLC portal
CUSTOMER DUE DILIGENCE
 2. Risk Assessment
 A. Reduced Due Diligence- In strictly limited
circumstances and where there is proven low risk of
money laundering and terrorist financing
 B. Enhanced Due Diligence- Where the risks of money
laundering or terrorist financing are higher
 3. Ongoing Monitoring of Customers, Accounts and
Transactions
PROHIBITED ACCOUNTS
The following accounts shall be prohibited and may be the
subject of the Supervising Authorities’ annual testing for
the sole purpose of determining the existence and true
identity of their owners:
 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 similar
PROHIBITED ACCOUNTS
 b. Numbered Accounts. - Numbered accounts,
except non-checking numbered accounts.
Covered and suspicious transaction reports involving
non-checking numbered accounts shall contain the
true name of the account holder.
RECORD KEEPING
 Retention of Records Where the Account is the Subject of a
Case. - If a case has been filed in court involving the
account, records must be retained and safely kept beyond
the five (5) year period, until it is officially confirmed by the
AMLC Secretariat that the case has been resolved, decided
or terminated with finality.
RECORD KEEPING
 Closed Accounts. - Covered persons shall maintain
and safely store for at least five (5) years from
the dates the accounts were closed, all records of
customer identification and transaction
documents.
RECORD KEEPING
 Covered persons shall retain all records as originals or in such
forms as are admissible in court.
 Covered persons shall, likewise, keep the electronic copies of
all covered and suspicious transaction reports for, at least, five
(5) years from the dates of submission to the AMLC.
 For low risk customers, it is sufficient that covered persons
shall maintain and store, in whatever form, a record of
customer information and transactions.
CORRESPONDENT BANKING
 Covered persons shall adopt policies and procedures to
prevent correspondent banking activities from being
utilized for money laundering activities, and designate an
officer responsible in ensuring compliance with these
policies and procedures.
TRANSACTION REPORTING
 COVERED TRANSACTION REPORT (CTR)
 Covered persons shall report to the AMLC all covered
transactions within five (5) working days, unless the AMLC
prescribes a different period not exceeding fifteen (15)
working days, from the occurrence thereof.
SUBSTANCE AND FORM OF REPORTS
 - Covered persons shall ensure the accuracy and
completeness of covered transaction report and suspicious
transaction report, which shall be filed in the forms
prescribed by the AMLC and shall be submitted in a secured
manner to the AMLC in electronic form via the AMLC’s
Reporting System
CONFIDENTIALITY OF REPORTING

 - When reporting covered or suspicious transactions,


covered persons, and their officers and employees, are
prohibited from communicating, directly or indirectly, in
any manner or by any means, to any person or entity, or the
media, the fact that a covered or suspicious transaction has
been or is about to be reported, the contents of the report,
or any other information in relation thereto.
CONFIDENTIALITY OF REPORTING

 - Any information about such reporting shall not be


published or aired, in any manner or form, by the mass
media, or through electronic mail, or other similar
devices. In case of violation thereof, the concerned
officer, and employee, of the covered person and media
shall be held criminally liable.
SAFE HARBOR PROVISION

 - No administrative, criminal or civil proceedings shall


lie against any person for having made a covered
transaction or suspicious transaction report in the
regular performance of his duties and in good faith,
whether or not such reporting results in any criminal
prosecution under the AMLA or any other Philippine
law.
Freezing of Account
SECTION 7. Section 10 of the same Act is
hereby amended to read as follows:
 "Sec 10. Freezing of Monetary Instrument or Property. --
The Court of Appeals, upon application ex parte by the
AMLC and after determination that probable cause exists
that any monetary instrument or property is in any way
related to an unlawful activity as defined in Section 3(i)
hereof, may issue a freeze order which shall be effective
immediately. The freeze order shall be for a period of
twenty (20) days unless extended by the court.
RA 9160 (2001) RA 9194 (2003) RA 10167 (2012) RA 10365 (2013)
Who may issue AMLA Court of Court of Court of
Appeals Appeals Appeals
When to issue Upon Upon verified Upon verified Upon a verified
determination ex parte ex parte ex parte
that probable petition by the petition by the petition by the
cause exists AMLC and after AMLC and after AMLC and after
that any determination determination determination
deposit or that probable that probable that probable
similar account cause exists cause exists cause exists
is in any way that any that any that any
related to an monetary monetary monetary
unlawful instrument or instrument or instrument or
activity property is in property is in property is in
any way related any way related any way related
to an unlawful to an unlawful to an unlawful
activity activity activity
RA 9160 (2001) RA 9194 RA 10167 (2012) RA 10365 (2013) &
(2003) RA 10927
Period to Act The AMLC has 72 hours NA CA should act on CA should act on
to dispose of the the petition to the petition to
depositor's explanation. freeze within 24 freeze within 24
hours from filing hours from filing
of the petition. of the petition.
Period of Not exceeding 15 days, 20 days, 20 days, unless Not exceeding 6
Effectivity may be extended upon unless extended by the months depending
order of the court extended by court on the
the court circumstances of
the case
Notice to Explain Simultaneously with the No notice No notice No notice
issuance of the freeze requirement requirement requirement
order. The depositor
shall have 72 hours upon
receipt of the notice to
explain why the freeze
order should be lifted.
 “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 the
court finds there is probable cause to be considered as
proceeds of predicate offense, and 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.”
Bank Inquiry
Section 11, Republic Act No. 9160, as
amended
Who may inquire or examine
 Anti-Money Laundering Council (AMLC) to inquire
or examine a particular deposit or investment
with a banking or non-banking financial
institution.
Subject of the Inquiry or Examination
 any particular deposit or investment, including related
accounts, with any banking institution or non-bank
financial institution
Power of the BSP
 BSP may inquire into or examine any deposit or
investment with any banking institution on non-
bank financial institution when the examination is
made in the course of periodic or specific
examination.
With Court Order Without Court Order
1.Kidnapping for ransom;
Court When it has been established 2.Violation of Sections 4,
Order that there is probable cause 5, 7, 8, 9, 10, 12 , 13, 14,
that the deposits or 15 and 16 of RA 9165;
investments, including related 3.Hijacking and other
accounts involved, are related violations under RA 6235;
to an unlawful activity or a destructive arson and
money laundering offense. murder;
4.Felonies or offenses of a
nature similar to those
mentioned in Section
3(i)(1), (2), and (12);
5.Terrorism and conspiracy
to commit terrorism
UPDATE: 2018
 Stricter registration and reporting guidelines of the
Anti-Money Laundering Council (AMLC)
 part of the government's campaign against money
laundering and terrorism financing, which was
highlighted when $81 million stolen from Bangladesh's
central bank was coursed through a Philippine bank
and casinos in 2016
 AMLC Registration and Reporting Guidelines
(ARRG)
BAR EXAM QUESTIONS
2007-2013
 98. The Anti-Money Laundering Law is a law that seeks to
prevent money laundering activities by providing for more
transparency in the Philippine Financial System, hence the
following institutions are covered by the law, except:
 a. bank and any financial institutions;
 b. pawnshops;
 c. casino operators;
 d. All of the above.
SUGGESTED ANSWER:
 c. casino operators

*Because of RA 10927, casino operators are now included in the covered persons.
 99. For purposes of determining violation of the provisions of Anti-
Money Laundering Law, a transaction is considered as a "Suspicious
Transaction" with "Covered Institutions" regardless of the amount
involved, where which the following circumstances exist/s?
 a. the amount involved is not commensurate with the client's
business or financial capacity;
 b. there is no underlying legal or trade obligation, purpose or
economic justification;
 c. client is not properly identified;
 d. All of the above.
SUGGESTED ANSWER:

 d. all of the above


 (14) Under the Anti-Money Laundering Law, a covered
institution is required to maintain a system of verifying the
true identity of their clients as well as persons purporting to
act on behalf of

 (A) those doing business with such clients.


 (B) unknown principals.
 (C) the covered institution.
 (D) such clients.
Banks; Money Laundering: Predicate Crimes (2007)
Name at least five predicate crimes to money laundering.
(5%)
 SUGGESTED ANSWER:
 Any five of the following are predicate crimes to money
laundering:
 (1) Kidnapping for ransom under Article 267 of Act
No.3815, otherwise known as the Revised Penal Code, as
amended;
 (2) Sections 3,4,5,7,8 and 9 of Article Two of Republic
Act No. 6425, as amended, otherwise known as the
Dangerous Drugs Act of 1972;
 (3) Section 3 paragraphs B,C,E,G,H and I of Republic Act No.
3019, as amended; otherwise known as the 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;
 (8) Qualified theft under Article 310 of the Revised Penal Code, as
amended;
 (9) Swindling under Article 315 of the Revised Penal Code, as amended.
 (10) Smuggling under Republic Act Nos. 455 and 1937
 (11) Violations under Republic Act No. 8792, otherwise known as 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, including those perpetrated by terrorist against non-
combatant persons and similar targets;
 (13) Fraudulent practices and other violations under Republic Act No.
8799, otherwise known as the securities Regulation Code of 2000
 (14) Felonies or offenses of a similar nature those are punishable under
the penal laws of other countries. (Sec 3, Anti-Money Laundering Act of
2001).
Banks; Secrecy of Bank Deposit; AMLC (2013)
 No.III. From his first term in 2007, Congressman Abner has
been endorsing his pork barrel allocations to Twin Rivers in
exchange for a commission of 40% of the face value of the
allocation. Twin Rivers is a non-governmental organization
whose supporting papers, after audit, were found by the
Commission on Audit to be fictitious. Other than to
prepare and submit falsifies papers to support the
encashment of the pork barrel checks, Twin Rivers does
not appear to have done anything on the endorsed
projects and Congressman Abner likewise does not appear
to have bothered to monitor the progress of the project he
endorsed. The congressmen converted most of the
commissions he generated into US dollars, and deposited
these in a foreign currency account with Banco de Plata
(BDP).
 Based on amply-supported tips given by a
congressman from another political party, the Anti-
Money Laundering Council sent B DP an order:
 (1) to confirm Cong. Abner’s deposits with the
bank and to provide details of these deposits; and
(2) to hold all withdrawals and other transactions
involving the congressman’s bank accounts.
As counsel for BDP, would you advise the bank to
comply with the order? (8%)
SUGGESTED ANSWER:
 I shall advise Banco de Plata not to comply with
the order of the Anti-Money Laundering Council. It
cannot inquire into the deposits of Congressman
Abner, regardless of currency, without a bank
inquiry order from a competent court, because
crimes involved are not kidnapping for ransom,
violations of the Comprehensive Dangerous Drugs
Act, hijacking and other violations of Republic Act
No. 6235, destructive arson, murder, and
terrorism and conspiracy to commit terrorism
(Section 11 of Anti-Money Laundering Act).
 The Anti-Money Laundering Council cannot order
Banco de Plata to hold all withdrawals and other
transactions involving the accounts of
Congressman Abner. It is the Court of Appeals
which has the power to issue a freeze order over
the accounts upon petition of the Anti-Money
Laundering Council (Anti-Money Laundering Act;
Republic v. Cabrini Green
X.Under the Anti-Money Laundering Act, a depositor’s bank
account may be frozen. (1%)
 (A) By the bank when the account is the subject of a
suspicious or covered transaction report
 (B) By the Anti-Money Laundering Council (AMLC) when the
account belongs to a person already convicted of money
laundering
 (C) By the Regional Trial Court, upon ex parte motion by the
AMLC, in a criminal prosecution for money laundering
pending before it.
 (D) By the Court of Appeals motu proprio in an appeal from
a judgment of conviction of a criminal charge for money
laundering.
 (E) In none of the above.
SUGGESTED ANSWER:
 (E) In none of the above. (Section 10 of the Anti-
Money Laundering Act)
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? 2.5%
 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 accounts 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%
Suggested Answers
1. No. Under the Anti-Money Laundering Law, Rudy
would be guilty of a "money laundering crime"
committed when the proceeds of an "unlawful
activity," like jueteng operations, are made to
appear as having originated from legitimate
sources. The money laundering crime is separate
from the unlawful activity of being a jueteng
operator, and requires no previous conviction for
the unlawful activity (See also Sec. 3, Anti-Money
Laundering Act of 2001).
 2. Luansing Realty, Inc. is a real estate company,
hence it is not a covered institution under Section 3
of the Anti-Money Laundering Act. Only banking
institutions, insurance companies, securities dealers
and brokers, pre-need companies and other entities
administering or otherwise dealing in currency,
commodities or financial derivatives are covered
institutions. Hence, Luansing Realty, Inc. may not use
the Anti-Money Laundering Act to refuse to transfer to
the buyer ownership of the houses and lots.
 3. No, the bank did not violate any law. The bank
being specified as a "covered institution" under
the Anti-Money Laundering Law, is obliged to
report to the AMLC covered and suspicious
transactions, without thereby violating any law.
This is one of the exceptions to the Secrecy of
Bank Deposit Act
 4.Yes, it has an obligation to deliver titles to
Rudy. As Luansing Realty, Inc. is not a covered
institution under Section 3 of the Anti-Money
Laundering Act, it may not invoke this law to
refuse delivery of the titles to Rudy.
Under Republic Act No.1405 (The Bank Secrecy
Law), bank deposits are considered absolutely
confidential and may not be examined, inquired or
looked into by any person, government official,
bureau or office
2017
Flora, a frequent traveller, found a purse concealed between the
cushions of a large sofa inside the VIP lounge in NAIA while she
was waiting for her flight to be called. Inside the purse was a
very valuable diamond-studded necklace. She decided not to turn
over the purse to the airport management, and instead to keep
it. On her return from her travels, she had a dependable jeweller
appraise the necklace, and the latter told her that the necklace
was easily worth at least ₱5,000,000.00 in the open market. To
test the appraisal, she pawned the necklace for ₱2,000,000.00.
She then deposited the entire amount in her checking account
with Metro Bank. Promptly, Metro Bank reported the transaction
to the Anti-Money Laundering Council (AMLC).
 Given that her appropriation of the necklace was theft, may
Flora be successfully prosecuted for money laundering?
Explain briefly your answer. (4%)
 No, she cannot be prosecuted for money
laundering. Under AMLA, the predicate crime or
unlawful activity referred to is qualified theft,
not plain theft.
2018
Through various acts of graft and bribery, Mayor Ycasiano
accumulated a large amount of wealth which he converted into
U.S. dollars and deposited in a Foreign Currency Deposit Unit
(FCDU) account with the Yuen Bank (YB). On a tip given by the
secretary of the mayor, the Anti-Money Laundering Council (AMLC)
sent an order to YB to confirm the amount of U.S. dollars that
Mayor Ycasiano had in his FCDU account. YB claims that, under
the Foreign Currency Deposit Act (R.A. No. 6426, as amended), a
written permission from the depositor is the only instance allowed
for the examination of FCDU accounts. YB alleges that AMLC on its
own cannot order a banking institution to reveal matters relating
to bank accounts.
 (a) Is the legal position of YB, in requiring written permission
from the depositor, correct? (2.5%)
 (b) Does AMLC have the power to order a banking institution
to reveal matters relating to bank accounts? (2.5%)