8.

4 AMLA Law (RA 9160, As Amended by RA 9194)

8.4.1 Purpose, policies, and principles

with 16 powers
AMLC
1 Chairman BSP Governor
Insurance Commission Commissioner
2 Members
SEC Chairperson
Purpose
protect and preserve integrity and confidentiality of
bank accounts
insure that PH shall not be used as a money
laundering site for the proceeds of unlawful acts
cooperate with transnational investigation and
prosecution of money laundering cases
targeted financial sanctions UN Security Council Resolution

8.4.2 Definition of terms

Covered Institution banks

non-banks
1. supervised or regulated by BSP
quasi-banks
trust entities

2. supervised or regulated by Insurance Commission Insurance companies

 SB Sa House
3. supervised or regulated by SEC
Pre Close Mu Co
securities dealers
brokers For Mocha Mo
salesmen DeVa Cash mo
investment houses and other similar entities managing securities or rendering services as
·

investment agent, advisor, or consultant

pre-need companies
close and investment companies
mutual funds
common trust funds

foreign exchange corporations

money changers
money payment, remittance, and transfer companies

dealing in currency, commodities or financial derivatives

valuable objects
cash substitutes
other similar monetary instruments or property

Monetary Instrument
coins and currency
drafts, checks and notes
securities or negotiable instruments, bonds, commercial papers, deposit certificates, trust certificates, custodial
receipts or deposit substitute instruments, trading orders, transaction tickets and confirmations of sale or
investments and money marked instruments
other similar instruments where title thereto passes to another by endorsement, assignment or delivery
 Offender - commits a money laundering offense
Person - any natural or juridical person
Proceeds - an amount derived or realized from an unlawful activity
Supervising Authority - the appropriate supervisory or regulatory agency, department or office supervising or
regulating the covered institutions (BSP, IC, SEC)
Transaction
any act establishing any right or obligation or giving rise to any contractual or legal relationship between the parties
includes any movement of funds by any means with a covered institution.

8.4.3 Unlawful activities

1. Kidnapping for ransom

2. Comprehensive Dangerous Drug Act
3. Anti-Graft and Corruption Practices Act
4. Plunder
5. Robbery and Extorsion
with violence or intimidation of persons
with physical injuries, committed in an uninhabited place and by a band, or with use of firearms on a street, road, or alley
in an uninhabited house or public building or edifice devoted to worship

"Theft, or the taking of personal property with intent to gain but without violence or unless what was stoled was:
intimidation of persons or force upon things, is not an unlawful activity under the AMLA" Qualified theft or
Violation of Anti-Fencing Law
6. Jueteng and masiao
7. Piracy high seas
inland PH waters
aiding and abetting pirates and brigands
8. Qualified theft
coconuts in a coconut farm
fish in a fish pond
mail matter
vehicle
cattle
the crime was committed with abuse of confidence
Violations of
9. Swindling (or Estafa)
20. Anti-Trafficking in Persons Act
10. Smuggling
21. Revised Forestry Code
11. Violations of E-Commerce Act
22. Philippine Fisheries Code
12. Hijacking 23. Philippine Mining Act
13. Destructive arson and murder 24. Wildlife Resources Conservation and Protection Act
14. Terrorism and conspiracy to commit terrorism 25. National Caves and Cave Resources Management Protection Act
15. Financing of Terrorism 26. Anti-Carnapping Act
16. Bribery and Corruption of Public Officers 27. Illegal/Unlawful Possession, Manufacture, Dealing In, Acquisition
17. Frauds and Illegal Exactions and Transactions or Disposition of Firearms, Ammunition or Explosives
18. Malversation of Public funds and property 28. Anti-Fencing Law
19. Forgeries and Counterfeiting 29. Migrant Workers and Overseas Filipinos Act
30. Intellectual Property Code
weapons of mass destruction, proliferation financing 31. Anti-Photo and Video Voyeurism Act
32. Anti-Child Pornography Act
33. Special Protection of Children Against Abuse, Exploitation and
Discrimination
predicate crime in money laundering:
34. Securities Regulation Code
at least in excess of P25M
35. Strategic Trade Management Act
there is probable cause
findings of fraud 36. Tax Evasion
willful misrepresentation and
malevolent intent 37. Felonies or offenses of a similar nature that are punishable
under the penal laws of other countries.
 8.4.4 Covered persons

1. supervised or regulated by BSP

2. dsupervised or regulated by IC SB Sa House
3. supervised or regulated by SEC Pre Close Mu Co
For Mocha Mo
DeVa Cash Mo
4. mutual funds or open-end investment companies or issuers
5. Jewelry in excess of P1M price exceeding P500,000

6. Land Registration Authority and all of its Register of Deeds on all real estate transaction
7. Casinos
including internet and ship-based casinos
director
8. Company service providers to 3rd parties including CPAs and Lawyers corporate secretary of a company
acting as a formation agent of juridical persons partner of a partnership
providing a registered office, business address or accomodation, other similar positions
correspondence or administrative address for a company, a partnership or any other legal person or arrangement
nominee shareholder for another person

9. Person providing the following services including CPAs and Lawyers

managing of client money, securities or other assets
management of bank, savings or securities accounts
organization of contributions for the creation, operation or management of companies
creation, operation or management of juridical persons or arrangements, buying and selling business entities
10. Real Estate Developers and Brokers
11. Offshore Gaming Operators and their Service Providers, effective January 31, 2021
Lawyers and accountants: are not covered

acting as independent legal compromise of client confidences or the attorney-client relationship

professionals in relation to compromise of client confidences or the CPA-client relationship

8.4.5 Money laundering, terrorism and financing and asset forfeiture

Money laundering a crime whereby the proceeds of an unlawful activity are transacted,
thereby making them appear to have originated from legitimate sources

1. Transacts or attempts to transact

2. Converts, transfers, disposes of, moves, acquires, possesses or uses
3. Conceals or disguises the true nature, source, location, disposition, movement or ownership of or rights
4. Attempts or conspires to commit money laundering offenses
5. Aids, abets, assists in or counsels the commission of the money laundering offenses
6. Performs or fails to perform any act as a result of which he facilitates the offense of money laundering

7. Those committed by failure to report to the Anti-Money Laundering Council (AMLC) by any covered person
knowing that a covered or suspicious transaction is required under the Anti-Money Laundering Law to be reported
cash transactions increase the anonymity
Shell company of customers and therefore decrease
is essentially a corporation without any active business operations or assets. the government’s ability to trace the
initial recipient of the dirty money
purports to perform some service that would reasonably require its customers to often pay cash
money launderers commonly select beauty salons and plumbing services as shell companies

The launderer then deposits the money with the shell company, which deposits it into its accounts.
The shell company creates fake invoices and receipts to account for the cash.
Such transactions create the appearance of propriety and clean money
 Terrorist Financing
committed by any person directly, or indirectly, willfully and without lawful excuse possesses, provides, collects
or uses property or funds or make available property, funds or financial service or other related service
with willful and unlawful intention that they should be used or with the knowledge that they are used, in full or in part

a. to carry out or facilitate the commission of any terrorist act

b. by a terrorist organization, association or group
c. by an individual terrorist
Forfeiture Provisions
Civil forfeiture upon determination that probable cause exists that any monetary instrument or property is in
any way related to an unlawful activity or a money laundering offense, the AMLC shall file with the RTC, through
the Office of the Solicitor General, a verified petition for civil forfeiture

No prior criminal charge, pendency of or conviction necessary Claim on Forfeited Assets

for the commencement or the resolution of a petition for civil forfeiture
“…proceeds and instruments or tools (for the commission of a felony or crime) within 15 days
shall be confiscated and forfeited in favor of the Government…”
8.4.6 Preventive measures and obligations of covered persons
8.4.6.1 Prohibited accounts

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

Numbered Accounts a bank account, especially in a Swiss bank, identified only by a number and not bearing the owner's name
except non-checking number accounts, shall not be allowed
 Four Pillars of AML
Customer Due Diligence - Know your Customer (KYC)
Reporting - Covered and Suspicious Transaction
Record keeping - Safekeeping and retention
AML Training program

8.4.6.2 Customer due diligence (CDD) Purpose

Customer Identification Process (CIP) • identify the customer, and its agents and
Customer Verification Process (CVP) beneficial owners
CDD measures: • determine the risk posed by each customer
Identification and Verification of Agents (IVA)
• establish, maintain, close or terminate the
Beneficial Ownership Verification (BOV)
account or business relationship
Timing Determination of the Purpose of Relationship (DPR) • assess the level of monitoring to be applied
Ongoing Monitoring Process (OMP)

may be conducted simultaneously, consecutively, or at such timing and When?

frequency as the covered person may determine to be appropriate,
• establishing business or professional relationship
depending on the risks involved, unless otherwise provided
• carrying out occasional transactions above
(Php 100,000.00) or any other threshold
“Average Due Diligence”
• carrying out occasional wire transfers
• there is a suspicion of ML/TF, regardless of any
General Requirement for CIP exemptions or thresholds
•the covered person has doubts about the veracity
identify and record the true identity of their customers, or adequacy of previously obtained
whether permanent or occasional, and whether natural or identification information and/or data
juridical person, or legal arrangement

First Time Transactions

present the original and submit a clear copy of, at least, one (1) ID
Customer Identification

I Face-to-face contact
Minimum Customer Information and Identification

Individual Entity / Other than Individual

• Name of Customer • Name of Entity

• Date and place of birth • Name of authorized signatory
• Name of Beneficial Owner, if applicable • Name of Beneficial Owner/s
• Present, permanent and mailing address • Official address
• Contact number or information • Contact number or information
• Complete name, address, and contact information of • Nature of business
beneficial owner, if applicable • Specimen signature or biometrics of authorized signatories
• Civil status • DTI/BSP/AMLC Certificate of Registration, or Certificate of
• Nationality/Citizenship Incorporation or Partnership
• Nature of work, name of employer, or nature of business • Articles of Incorporation or Partnership
or profession, source of funds or property • Registration Data Sheet/Latest General Information Sheet
• TIN, SSS, GSIS number, as may be applicable • Secretary’s Certificate (Re: Signing Authority)
• Specimen signature or biometrics • If outside PH, similar documents and/or information

8.4.7 Beneficial ownership Beneficial Owner

All natural person having 20% or more (direct or indirect ownership) • Name
In the absence of % ow ownership, the natural person who has the • Address
ultimate effective control on voting rights in the legal/person/entity • Contact Information
(e.g President and Treasurer or it’s equivalent) • Citizenship or Nationality
For trusts, identify the trustees, settlor, beneficiaries and any other
natural person existing ultimate effective control over the trust
identify persons with equivalent or similar positions for other types of legal arrangements
Politically Exposed Person (PEP) with substantial authority over policy, operations, or
the use of allocation of government-owned resources
an individual who is or has been the Philippines
entrusted with prominent public position in a foreign state
an international organization
shall include immediate family members, and close relationships and associates that are reputedly known to have:
Joint beneficial ownership of a legal entity or arrangement with a PEP
Sole beneficial ownership of a legal entity or arrangement that is know to exist for the benefit of the PEP

Risk Assessment and Updating/Monitoring

Customer Risk rating is done upon On-Boarding of the customer using Client Risk Assessment Form (CRAF)
and reviewed/updated/periodically depending on the risk classification result

Proper Accomplishment of CRAF

Analyze the disclosed and verified customer information, location, nature of business, products/services, and delivery
channels/anticipated transactions
Inclused watchlist database screening and Google/News checking if with adverse news/for additional information

Low Risk Normal Risk High Risk

-

Reduced Due Normal Due Enhanced Due

Diligence (RDD) Diligence (NDD) Diligence (NDD)

Annually
every 3 years
8.4.8 Record keeping requirements
maintain and safely store for five (5) years from the dates of transactions all customer records and transaction documents

Retention of Records Where there is a Case

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
always amount ang basis cash or other monetary instrument

AMLC covered transactions total amount in excess of P500,000

within one banking day
covered transaction report (CTR)
casinos
within 5 working days
covered person or not exceeding 15 days single casino transaction in excess of
(if prescribed by AMLC) P5,000,000 or its equivalent in other
currency
amount is not important real estate developers/brokers
suspicious transactions single cash transaction in excess of
P7,500,000 or its equivalent in other currency
suspicious transaction report (STR)
within the next working day jewelry, dealer in precious metals/stones
any of the following exist from occurrence
• no legal or trade obligation, purpose or economic justification P1,000,000 cash transaction
• unidentified client
the time the covered both a covered and a
• not commensurate with the business of financial capacity
entity has determined suspicious transaction?
• structured to avoid being subjected to reporting
that the transaction
• observed to deviate from the profile of the client is suspicious, which
• related to unlawful activity or money laundering offense should not exceed
• any transaction that is similar or analogous shall be reported as a
10 days from the date
suspicious transaction
of transaction
8.4.9 Safe Harbor
No administrative, criminal or civil proceedings shall lie against any person for having made a CTR or an
STR 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

Non-Reporting of CTR and STR is a criminal offense

Imprisonment - 6 months to 4 years
Fine - P100,000 to P500,000 or both

Confidentiality of Reporting
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.
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.

Functions of AMLC
1. to investigate suspicious transactions and covered transactions deemed suspicious after determination by AMLC,
money laundering activities and other violations
2. To require and receive covered transaction reports from covered institutions
3. To issue orders addressed to the appropriate Supervising Authority or the covered institution to determine the true
identity of any monetary instrument or property subject of a covered transaction report or request for assistance
from a foreign State, or believed by the Council, on the basis of substantial evidence to be in whole or in part,
whenever located, representing, involving or related to, directly or indirectly, in any manner or by any means, the
proceeds of an unlawful activity
4. To institute civil forfeiture proceedings and all other remedial proceedings through the OSG
5. To cause the filing of complaints with the DOJ or Ombudsman for the prosecution of money laundering offenses
6. To initiate investigations of covered transactions, money laundering activities and other violations
7. To freeze any monetary instrument or property alleged to be proceeds of any unlawful activity
8. To implement such measures as may be necessary and justified under RA 9160 to counteract money laundering
9. To receive and take action in respect of, any request from foreign states for assistance in their own anti-money
laundering operations provided in RA 9160
10. Todevelopeducationalprogramsontheperniciouseffectsofmoneylaundering,themethodsandtechniquesusedinmoney
laundering, the viable means of preventing money laundering and the effective ways of prosecuting and punishing
offenders
11. To enlist the assistance of any branch, department, bureau, office, agency or instrumentality of the government,
including GOCCs, 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.
12. To impose administrative sanctions for the violation of laws, rules, regulations, orders, and resolutions issued pursuant
to law
13. "in the conduct of its investigation, the AMLC shall apply for the issuance of a search and seizure order with any
competent court; (as included by RA No. 11521, effective January 31, 2021)
14. "in the conduct of its investigation, the AMLC shall apply for the issuance ofsubpoena ad testificandum and/or
subpoena duces tecum with any competent court
15. "to implement targeted financial sanctions in relation to proliferation of weapons of mass destruction and its financing,
including ex parte freeze, without delay, against all funds and other assets that are owned and controlled, directly
or indirectly, including funds and assets derived or generated therefrom, by individuals or entities designated and listed
under United Nations Security Council Resolution Numbers 1718 of 2006 and 2231 of 2015 and their successor
resolutions as well as any binding resolution of the Security Council; and (as included by RA No. 11521, effective
January 31, 2021)
16. "to preserve, manage or dispose assets pursuant to a freeze order, asset preservation order, or judgment of
forfeiture: Provided, however, That pending their turnover to the national government, all expenses incurred in
relation to the duties herein mentioned shall be deducted from the amount to be turned over to the national
government." (as included by RA No. 11521, effective January 31, 2021)
Freezing of Monetary Instrument or Property

The Court of Appeals, upon application ex parte by AMLC and after determination that probable cause exists that any monetary
instrument or property is in any way related to an unlawful activity, may issue a freeze order which shall be effective
immediately (for a period of 20 days unless extended by the court upon application by the AMLC).

Considering the intricate and diverse web of related and interlocking accounts pertaining to the monetary instruments or
properties that any person may create in the different covered institutions, their branches and/or other units, AMLC may apply
to freeze monetary instruments or properties in the names of the reported owners/holders, and monetary instruments or
properties named in the application of the AMLC, including all other related web of accounts.

Related Web of Accounts are those accounts, the funds and sources of which originated from and/or are materially linked to
the monetary instruments or properties subject of the freeze orders.

Amendments Under RA No. 11521 (effective January 31, 2021)

1. Within the twenty (20) day period, the Court of Appeals shall conduct a summary hearing, with notice to the parties, to
determine whether or not to modify or lift the freeze order, or extend its effectivity.
2. The total period of the freeze order issued by the Court of Appeals under this provision shall not exceed six (6) months.
3. This is without prejudice to an asset preservation order that the Regional Trial Court having jurisdiction over the appropriate
anti-money laundering case or civil forfeiture case may issue on the same account depending on the circumstances of the case,
where the Court of Appeals will remand the case and its records.
4. If there is no case filed against a person whose account has been frozen within the period determined by the Court of Appeals,
not exceeding six (6) months, the freeze order shall be deemed ipso facto lifted.
5. This new rule shall not apply to pending cases in the courts. In any case, the court should act on the petition to freeze within
twenty-four (24) hours from filing of the petition. If the application is filed a day before a nonworking day, the
computation of the twenty-four (24) hour period shall exclude the nonworking days.
6. 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 court finds there is probable cause to be considered as proceeds of a predicate
offense, and the 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.
7. 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
 8. No court shall issue a temporary restraining order or a writ of injunction against any freeze order, except the SC
9. For purposes of implementing targeted financial sanctions in relation to proliferation of weapons of mass destruction and its
financing, the AMLC shall have the power to issue, ex parte, an order to freeze without delay.
10. The freeze order shall be effective until the basis for its issuance shall have been lifted. During the effectivity of the freeze
order, the aggrieved party may, within twenty (20) days from issuance, file with the Court of Appeals a petition to determine
the basis of the freeze order according to the principle of effective judicial protection
11. The person whose property or funds have been frozen may withdraw such sums as the AMLC determines to be reasonably needed
for monthly family needs and sustenance including the services of counsel and the family medical needs of such person.
12. The AMLC, if circumstance warrant, may initiate civil forfeiture proceedings to preserve the assets and to protect it from
dissipation.
13. No court shall issue a temporary restraining order or a writ of injunction (or even an asset preservation order as per Sec. 12(d),
as amended) against the freeze order (referred to in 9 and 12), except the Court of Appeals or the Supreme Court.

Authority to inquire into bank deposits

The AMLC may inquire into deposits upon order of the court when there is probable cause that the deposits are
related to the crime or unlawful activities.
However, a court order is not necessary when the offense or unlawful activity involved is any of the following:
1. Kidnapping for ransom
2. Comprehensive Dangerous Drugs Act (RA 9165)
3. Hijacking and other violations under RA 6235, destructive arson and murder, including those perpetrated by
terrorists against non-combatant persons and similar targets
4. Terrorism and conspiracy to commit terrorism as defined under the Human Security Act.

Inquiry into deposits may be availed of even in the absence of a pre-existing criminal case under the same law.
However, the order authorizing bank inquiry cannot be issued ex parte.