Anti- Money Laundering Law  The Basel Institute on Governance -

Singapore, Switzerland, USA, UK

"Money laundering”
(important
RA 9160 (Anti-Money Laundering Act of 2001  financial centers in cross border
[AMLA]) banking) customer due diligence
 Basel Committee on Banking
Sec. 4: Money laundering is a CRIME whereby
Supervision and Financial Action Task
the proceeds of an Unlawful activities are
Force
deposited or channeled to a bank and make
them appear to have originated from legitimate FATF – FINANCIAL ACTION TASK FORCE
sources
 Inter-governmental body
History  Established in 1989
 Based in Paris, France
 originated from Mafia ownership of
 Formed by G-7
Laundromats in the US
 with a mission of paving the way for the
 extortion, prostitution, gambling and
effective prevention and detection of
bootleg liquor.
money laundering by ensuring that
 Al Capone purchased Laundromats
appropriate measures against money
business (legitimate business)earnings
laundering are implemented in all
are mixed with illicit business
nations
 1931 Al Capone was convicted for tax
 Created and maintained a list of Non
evasion
Cooperative Countries and Territories
 Meyer Lansky (Mob’s Accountant) Uses
(NCCT List)
Swiss facilities (Loan-back concept)
 1990 - FATF issued 40
 1980’s - International level Money
Recommendations
laundering was to combat the “war on
 June 2000 – Includes Philippines in its
drugs”
list of Non-Cooperative Countries and
 1990’s –includes all serious crimes
Territories (NCCT)
involve including the abuse of power so
 October 2001 – RA No. 9160 “AMLA of
it has become a tool in the return of
2001” enacted
assets
 March 2003 – RA No. 9194 Act
 The Basel Institute on Governance -
amending RA No. 9160
Singapore, Switzerland, USA, UK
 2001 - 2008 Incorporated subsequent
(important
amendments which requires countries
 financial centers in cross border
to have measures in place to fight
banking)
financing of terrorism
 1980’s - International level Money
 Recommendation No. 8 - (Calls for the
laundering was to combat the “war on
review of adequacy of laws and
drugs”
regulations on NPOs)
 1990’s –includes all serious crimes
 Recommendation No. 9 - (Cash
involve including the abuse of power so
Couriers)
it has become a tool in the return of
assets
February 11, 2005 – FATF removed the 14 Predicate crimes
Philippines in the list of Non- Cooperative
 Kidnapping for ransom
Countries and Territories (NCCTs)
 Drug Offenses
Three Stages of Money Laundering
 Graft and corruption practices
Stage 1 – Placement
 Plunder
Involves the initial placement or introduction of
the illegal funds into the financial system.  Robbery and extortion
Ex.  Jueteng and masiao
a. Smurfing or structuring  Piracy on the high seas
b. Purchase of insurance contract  Qualified Theft
Stage 2 – Layering  Swindling
involves a series of financial transactions during  Smuggling
which the dirty money is passedthrough series
of procedures, putting layer upon layer of  Electronic Commerce Crimes
persons and financial activities into the  Hijacking, destructive arson and murder,
Ex. including those perpetrated against
non-combatant persons (terrorist acts)
a. electronic transfer of funds
 Securities Fraud
b. disguised transfer of funds as payment for
goods or services  Felonies or offenses of a similar nature
punishable under penal laws of other
Stage 3 – Integration countries
- the money is once again made available What is Anti-Money Laundering Act?
to the criminal with the occupational
and geographic origin obscured or  Money Laundering was made a criminal
concealed. offense in the Philippines when the
Philippine Congress approved Republic
- The laundered funds are now integrated Act No. 9160, otherwise known as the
back into the legitimate economy Anti-Money Laundering Act (AMLA) of
through the purchase of properties, 2001. It was later amended in 2003 by
businesses and other investments. Republic Act No 9194
How does Money Laundering link to other  AMLA is the legal basis for making
crimes? money laundering a criminal offense in
the Philippines, and the money
 Directly connected to a criminal act or
launderer a criminal upon which
illegal activity
criminal penalties can be imposed
 Predicate crimes would have already under the AMLA
taken place
  Philippines governments response to Securities dealers, brokers, pre-need companies,
the concerns of FATF, to hunting down foreign exchange corporations, investment
and stopping money laundering houses, trading advisors and all other entities
whenever it may transpire dealing in currency, commodities or other
monetary properties
 ´ The Money enters the financial system
without being taxed ´ IC

 ´ The money is the fruit of illegal ´Insurance companies, insurance agents,

activity, therefore an extension of that insurance brokers, professional reinsurers,
same crime reinsurance brokers and holding companies

 Forces legitimate business to deal with What is a covered transaction?

inflated, undercut transactions
 A single transaction involving a total
 Criminal elements become more amount in excess of PHP500,000.00
comfortable conducting their activities within 1 banking day with a covered
institution (cash)
 ´ Financial system is manipulated – just
management of national economies is  This must be reported to the AMLC in a
put in danger covered transaction report (CTR)

 Know Your Customer (KYC)  For the AMLC To check these

are legitimate transactions
 Maintain strict identification standards
What is a suspicious transaction?
 Keep clear and accurate records
1. No underlying legal or trade reason or
 Report all covered and suspicious
purpose for the transaction – large transaction
transactions
for no apparent reasons
International agency that fights money
[Link] individual making the transaction has no
laundering:
proper identification
 Financial Action Task Force
[Link] amount involved does not correspond
(FATF)
with the expected business or financial capacity
 The Egmont Group of the individual making the transaction

 The Asia Pacific Group on [Link] transaction is done in a way to avoid being
Money Laundering reported as a covered transaction to the AMLC
– big transaction broken into smaller ones in the
´ BSP same day
´ Banks, off shore banking unit, quasi-bank, trust 5. The transaction is a major shift from the usual
entities, non-stock savings and loan transaction history of the individual
associations, including their subsidiaries and
affiliates, as well as pawnshops, foreign [Link] transaction is in any way related to an
exchangers and remittance agents unlawfully activity or money laundering offense
– must be reported immediately
´ SEC
[Link] transaction that is similar or analogous to  Facilitating money laundering – 4 to 7
the foregoing years and fine not <1.5M but not > 3M

A suspicious transaction report (STR) should be  Failing to report CTR and STR – 6
made if any of these conditions are met. months to 4 years or a fine not <100K
but not >500K or both
Importance behind fighting money laundering
Other violations punishable under the AMLA:
 Serious problem
 Criminals will multiply if even small  Failure to keep records – 6months to 1
businesses does not comply yr or a fine not <100K but not >500K or
 Small businesses may be held both
responsible under AMLA
 Malicious reporting - 6 months to 4
 Global scale and is not limited to local
years and a fine not <100K but not
context
>500K or both
 For the law to prevail here and abroad
must work hand in hand  Breach of confidentiality – 3 to 8 yrs and
a fine not <500K but not>1M
How to fight
 Administrative violations – fine 100K to
 Know Your Customer (KYC)
500K
 Maintain strict identification standards
ANTI-MONEY LAUNDERING COUNCIL
 Keep clear and accurate records
 2001 ALMC was formed upon the
 Report all covered and suspicious enactment of RA 9160
transactions
 with a mandate to prevent the entry of
International agency that fights money illegally acquired funds into our
laundering: financial system

 Financial Action Task Force  AMLC Secretariat implementing arm of

(FATF) AMLC

 The Egmont Group FUNCTIONS OF AMLC

 The Asia Pacific Group on 1. to require and receive covered or

Money Laundering suspicious transaction reports from
covered institutions;
Legal Consequences –penalties and its related
offenses 2. issue orders to determine the true
identity of the owner of any monetary
The AMLA penalizes the following acts or instrument or property that is the
omissions: subject of a report, and to request the
´Money laundering proper – 7 to 14 years assistance to the approve a
imprisonment and fine not <3M but not more foreign country if
than twice the value of money instrument or 3. institute civil forfeiture and all other
property remedial proceedings through the
Office of the Solicitor General;
 4. to cause the filing of complaints with  Republic Act No. 10365 - Further
the Department of Justice or the Strengthening the AMLA
Ombudsman for the prosecution of
 Republic Act No. 10927 - Designating
money laundering offenses;
Casinos as Covered Persons under the
5. to investigate suspicious transactions AMLA
and covered transactions deemed
 2016 Revised Implementing Rules and
suspicious after an investigation by
Regulations of Republic Act No. 9160,
AMLC, money laundering activities, and
As Amended (2016 RIRR)
other violations of the Act;
 Casino Implementing Rules and
6. Secure the order of the Court of
Regulations of Republic Act No. 10927
Appeals to freeze any monetary
(CIRR)
instrument or property alleged to be
the proceeds of unlawful activity  Rules on the Imposition of
7. Implement necessary and justified Administrative Sanction under Republic
measures to counteract money Act No. 9160, as Amended
laundering;
8. Receive and act on any requests from  A.M. No. 05-11-04-SC - Rule of
foreign countries for assistance in their Procedure in Cases of Civil Forfeiture,
own anti-money laundering operations Asset Preservation, and Freezing of
9. Develop education programs to make Monetary Instrument, Property, or
the public aware of the pernicious Proceeds Representing, Involving, or
effects of money laundering and how Relating to an Unlawful Activity or
they can participate in bringing Money Laundering Offense under
offenders to justice Republic Act No. 9160, as Amended.
10. Enlist the assistance of any branch of  Republic Act No. 10168 - Terrorism
government, including intelligence Financing Prevention and Suppression
agencies, for the prevention, detection Act of 2012
and investigation of money laundering
offenses and prosecution of offenders  Implementing Rules and Regulations of
11. to impose administrative Republic Act No. 10168
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