REPUBLIC ACT NO.

9160

AN ACT DEFINING THE CRIME OF MONEY LAUNDERING, PROVIDING

PENALTIES THEREFOR AND FOR OTHER PURPOSES

SECTION 1. Short Title. – This Act shall be known as the "Anti-Money Laundering Act
of 2001."

SEC. 2. Declaration of Policy. – It is hereby declared the policy of the State to protect
and preserve 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 State shall extend
cooperation in transnational investigations and prosecutions of persons involved in
money laundering activities wherever committed.

SEC. 3. Definitions. – For purposes of this Act, the following terms are hereby defined
as follows:

(a) "Covered institution" refers to:

(1) banks, non-banks, quasi-banks, trust entities, and all other

institutions and their subsidiaries and affiliates supervised or regulated
by the Bangko Sentral ng Pilipinas (BSP);

(2) insurance companies and all other institutions supervised or

regulated by the Insurance Commission; and

(3)

a. securities dealers, brokers, salesmen, investment houses

and other similar entities managing securities or rendering
services as investment agent, advisor, or consultant;

b. mutual funds, close-end investment companies, common

trust funds, pre-need companies and other similar entities;

c. foreign exchange corporations, money changers, money

payment, remittance, and transfer companies and other similar
entities; and

d. 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.
(b) "Covered transaction" is a single, series, or combination of transactions involving
a total amount in excess of Four Million Philippine pesos (PhP4,000,000.00) or an
equivalent amount in foreign currency based on the prevailing exchange rate within
five (5) consecutive banking days except those between 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.

It likewise refers to a single, series or combination or pattern of unusually large and

complex transactions in excess of Four Million Philippine pesos (PhP4,000,000.00)
especially cash deposits and investments having no credible purpose or origin,
underlying trade obligation or contract.

(c) "Monetary instrument" refers to:

(1) coins or currency of legal tender of the Philippines, or of any other

country;

(2) drafts, checks and notes;

(3) 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 market instruments;
and

(4) other similar instruments where title thereto passes to another by

endorsement, assignment or delivery.

(d) "Offender" refers to any person who commits a money laundering offense.

(e) "Person" refers to any natural or juridical person.

(f) "Proceeds" refers to an amount derived or realized from an unlawful activity.

(g) "Supervising Authority" refers to the appropriate supervisory or regulatory

agency, department or office supervising or regulating the covered institutions
enumerated in Section 3(a).

(h) "Transaction" refers to any act establishing any right or obligation or giving rise to
any contractual or legal relationship between the parties thereto. It also includes any
movement of funds by any means with a covered institution.

(i) "Unlawful activity" refers to any act or omission or series or combination thereof
involving or having relation to the following:

(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 terrorists 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 that are punishable under

the penal laws of other countries.

SEC. 4. Money Laundering Offense. – Money laundering is a crime whereby the

proceeds of an unlawful activity are transacted, thereby making them appear to have
originated from legitimate sources. It is committed by the following:
(a) Any person knowing that any monetary instrument or property represents,
involves, or relates to, the proceeds of any unlawful activity, transacts or
attempts to transact said monetary instrument or property.

(b) Any person knowing that any monetary instrument or property involves
the proceeds of any unlawful activity, performs or fails to perform any act as a
result of which he facilitates the offense of money laundering referred to in
paragraph (a) above.

(c) Any person knowing that any monetary instrument or property is required
under this Act to be disclosed and filed with the Anti-Money Laundering
Council (AMLC), fails to do so.

SEC. 5. Jurisdiction of Money Laundering Cases. – The regional trial courts shall have
jurisdiction to try all cases on money laundering. Those committed by public officers
and private persons who are in conspiracy with such public officers shall be under the
jurisdiction of the Sandiganbayan.
SEC. 6. Prosecution of Money Laundering. –

(a) Any person may be charged with and convicted of both the offense of
money laundering and the unlawful activity as herein defined.

(b) Any proceeding relating to the unlawful activity shall be given precedence
over the prosecution of any offense or violation under this Act without
prejudice to the freezing and other remedies provided.

SEC. 7. Creation of Anti-Money Laundering Council (AMLC). – The Anti-Money

Laundering Council is hereby created and shall be composed of the Governor of the
Bangko Sentral ng Pilipinas as chairman, the Commissioner of the Insurance
Commission and the Chairman of the Securities and Exchange Commission as
members. The AMLC shall act unanimously in the discharge of its functions as
defined hereunder:
(1) to require and receive covered transaction reports from covered
institutions;

(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 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, 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 initiate investigations of covered transactions, money laundering

activities and other violations of this Act;

(6) to freeze any monetary instrument or property alleged to be proceeds of

any unlawful activity;

(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 money laundering, the viable
means of preventing money laundering and the effective ways of prosecuting
and punishing offenders; and

(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.

SEC. 8. Creation of a Secretariat. – The AMLC is hereby authorized to establish a

secretariat to be headed by an Executive Director who shall be appointed by the
Council for a term of five (5) years. He must be a member of the Philippine Bar, at
least thirty-five (35) years of age and of good moral character, unquestionable
integrity and known probity. All members of the Secretariat must have served for at
least five (5) years either in the Insurance Commission, the Securities and Exchange
Commission or the Bangko Sentral ng Pilipinas (BSP) and shall hold full-time
permanent positions within the BSP.

SEC. 9. Prevention of Money Laundering; Customer Identification Requirements and

Record Keeping. –

(a) Customer Identification. - Covered institutions shall establish and record the true
identity of its clients based on official documents. They shall maintain a system of
verifying the true identity of their clients and, in case of corporate clients, require a
system of verifying their legal existence and organizational structure, as well as the
authority and identification of all persons purporting to act on their behalf.

The provisions of existing laws to the contrary notwithstanding, anonymous accounts,

accounts under fictitious names, and all other similar accounts shall be absolutely
prohibited. Peso and foreign currency non-checking numbered accounts shall be
allowed. The BSP may conduct annual testing solely limited to the determination of
the existence and true identity of the owners of such accounts.

(b) Record Keeping. - All records of all transactions of covered institutions shall be
maintained and safely stored for five (5) years from the dates of transactions. With
respect to closed accounts, the records on customer identification, account files and
business correspondence, shall be preserved and safely stored for at least five (5)
years from the dates when they were closed.

(c) Reporting of Covered Transactions. - Covered institutions shall report to the AMLC
all covered transactions within five (5) working days from occurrence thereof, unless
the Supervising Authority concerned prescribes a longer period not exceeding ten
(10) working days.

When reporting covered transactions to the AMLC, covered institutions and their
officers, employees, representatives, agents, advisors, consultants or associates 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, but are prohibited
from communicating, directly or indirectly, in any manner or by any means, to any
person the fact that a covered transaction report was made, the contents thereof, or
any other information in relation thereto. In case of violation thereof, the concerned
officer, employee, representative, agent, advisor, consultant or associate of the
covered institution, shall be criminally liable.

However, no administrative, criminal or civil proceedings, shall lie against any person
for having made a covered transaction report in the regular performance of his duties
and in good faith, whether or not such reporting results in any criminal prosecution
under this Act or any other Philippine law.
When reporting covered transactions to the AMLC, covered institutions and their
officers, employees, representatives, agents, advisors, consultants or associates are
prohibited from communicating, directly or indirectly, in any manner or by any
means, to any person, entity, the media, the fact that a covered 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,
electronic mail, or other similar devices. In case of violation thereof, the concerned
officer, employee, representative, agent, advisor, consultant or associate of the
covered institution, or media shall be held criminally liable.

SEC. 10. Authority to Freeze. – Upon determination that probable cause exists that
any deposit or similar account is in any way related to an unlawful activity, the AMLC
may issue a freeze order, which shall be effective immediately, on the account for a
period not exceeding fifteen (15) days. Notice to the depositor that his account has
been frozen shall be issued simultaneously with the issuance of the freeze order. The
depositor shall have seventy-two (72) hours upon receipt of the notice to explain why
the freeze order should be lifted. The AMLC has seventy-two (72) hours to dispose of
the depositor’s explanation. If it fails to act within seventy-two (72) hours from
receipt of the depositor’s explanation, the freeze order shall automatically be
dissolved. The fifteen (15)-day freeze order of the AMLC may be extended upon order
of the court, provided that the fifteen (15)-day period shall be tolled pending the
court’s decision to extend the period.

No court shall issue a temporary restraining order or writ of injunction against any
freeze order issued by the AMLC except the Court of Appeals or the Supreme Court.

SEC. 11. Authority to Inquire into Bank Deposits. – Notwithstanding the provisions of
Republic Act No. 1405, as amended; Republic Act No. 6426, as amended; Republic
Act No. 8791, and other laws, the AMLC may inquire into or examine any particular
deposit or investment with any banking institution or non-bank financial institution
upon order of any competent court in cases of violation of this Act when it has been
established that there is probable cause that the deposits or investments involved
are in any way related to a money laundering offense: Provided, That this provision
shall not apply to deposits and investments made prior to the effectivity of this Act.

SEC. 12 Forfeiture Provisions. –

(a) Civil Forfeiture. - When there is a covered transaction report made, and the court
has, in a petition filed for the purpose ordered seizure of any monetary instrument or
property, in whole or in part, directly or indirectly, related to said report, the Revised
Rules of Court on civil forfeiture shall apply.

(b) Claim on Forfeited Assets. - Where the court has issued an order of forfeiture of
the monetary instrument or property in a criminal prosecution for any money
laundering offense defined under Section 4 of this Act, the offender or any other
person claiming an interest therein may apply, by verified petition, for a declaration
that the same legitimately belongs to him and for segregation or exclusion of the
monetary instrument or property corresponding thereto. The verified petition shall be
filed with the court which rendered the judgment of conviction and order of forfeiture,
within fifteen (15) days from the date of the order of forfeiture, in default of which the
said order shall become final and executory. This provision shall apply in both civil
and criminal forfeiture.
(c) Payment in Lieu of Forfeiture. - Where the court has issued an order of forfeiture
of the monetary instrument or property subject of a money laundering offense
defined under Section 4, and said order cannot be enforced because any particular
monetary instrument or property cannot, with due diligence, be located, or it has
been substantially altered, destroyed, diminished in value or otherwise rendered
worthless by any act or omission, directly or indirectly, attributable to the offender, or
it has been concealed, removed, converted or otherwise transferred to prevent the
same from being found or to avoid forfeiture thereof, or it is located outside the
Philippines or has been placed or brought outside the jurisdiction of the court, or it
has been commingled with other monetary instruments or property belonging to
either the offender himself or a third person or entity, thereby rendering the same
difficult to identify or be segregated for purposes of forfeiture, the court may, instead
of enforcing the order of forfeiture of the monetary instrument or property or part
thereof or interest therein, accordingly order the convicted offender to pay an
amount equal to the value of said monetary instrument or property. This provision
shall apply in both civil and criminal forfeiture.

SEC. 13. Mutual Assistance among States. –

(a) Request for Assistance from a Foreign State. - Where a foreign State makes a
request for assistance in the investigation or prosecution of a money laundering
offense, the AMLC may execute the request or refuse to execute the same and
inform the foreign State of any valid reason for not executing the request or for
delaying the execution thereof. The principles of mutuality and reciprocity shall, for
this purpose, be at all times recognized.

(b) Powers of the AMLC to Act on a Request for Assistance from a Foreign State. - The
AMLC may execute a request for assistance from a foreign State by: (1) tracking
down, freezing, restraining and seizing assets alleged to be proceeds of any unlawful
activity under the procedures laid down in this Act; (2) giving information needed by
the foreign State within the procedures laid down in this Act; and (3) applying for an
order of forfeiture of any monetary instrument or property in the court: Provided,
That the court shall not issue such an order unless the application is accompanied by
an authenticated copy of the order of a court in the requesting State ordering the
forfeiture of said monetary instrument or property of a person who has been
convicted of a money laundering offense in the requesting State, and a certification
or an affidavit of a competent officer of the requesting State stating that the
conviction and the order of forfeiture are final and that no further appeal lies in
respect of either.

(c) Obtaining Assistance from Foreign States. - The AMLC may make a request to any
foreign State for assistance in (1) tracking down, freezing, restraining and seizing
assets alleged to be proceeds of any unlawful activity; (2) obtaining information that
it needs relating to any covered transaction, money laundering offense or any other
matter directly or indirectly related thereto; (3) to the extent allowed by the law of
the foreign State, applying with the proper court therein for an order to enter any
premises belonging to or in the possession or control of, any or all of the persons
named in said request, and/or search any or all such persons named therein and/or
remove any document, material or object named in said request: Provided, That the
documents accompanying the request in support of the application have been duly
authenticated in accordance with the applicable law or regulation of the foreign
State; and (4) applying for an order of forfeiture of any monetary instrument or
property in the proper court in the foreign State: Provided, That the request is
accompanied by an authenticated copy of the order of the regional trial court
ordering the forfeiture of said monetary instrument or property of a convicted
offender and an affidavit of the clerk of court stating that the conviction and the
order of forfeiture are final and that no further appeal lies in respect of either.

(d) Limitations on Requests for Mutual Assistance. - The AMLC may refuse to comply
with any request for assistance where the action sought by the request contravenes
any provision of the Constitution or the execution of a request is likely to prejudice
the national interest of the Philippines unless there is a treaty between the
Philippines and the requesting State relating to the provision of assistance in relation
to money laundering offenses.

(e) Requirements for Requests for Mutual Assistance from Foreign States. - A request
for mutual assistance from a foreign State must (1) confirm that an investigation or
prosecution is being conducted in respect of a money launderer named therein or
that he has been convicted of any money laundering offense; (2) state the grounds
on which any person is being investigated or prosecuted for money laundering or the
details of his conviction; (3) give sufficient particulars as to the identity of said
person; (4) give particulars sufficient to identify any covered institution believed to
have any information, document, material or object which may be of assistance to
the investigation or prosecution; (5) ask from the covered institution concerned any
information, document, material or object which may be of assistance to the
investigation or prosecution; (6) specify the manner in which and to whom said
information, document, material or object obtained pursuant to said request, is to be
produced; (7) give all the particulars necessary for the issuance by the court in the
requested State of the writs, orders or processes needed by the requesting State;
and (8) contain such other information as may assist in the execution of the request.

(f) Authentication of Documents. - For purposes of this Section, a document is

authenticated if the same is signed or certified by a judge, magistrate or equivalent
officer in or of, the requesting State, and authenticated by the oath or affirmation of a
witness or sealed with an official or public seal of a minister, secretary of State, or
officer in or of, the government of the requesting State, or of the person
administering the government or a department of the requesting territory,
protectorate or colony. The certificate of authentication may also be made by a
secretary of the embassy or legation, consul general, consul, vice consul, consular
agent or any officer in the foreign service of the Philippines stationed in the foreign
State in which the record is kept, and authenticated by the seal of his office.

(g) Extradition. - The Philippines shall negotiate for the inclusion of money laundering
offenses as herein defined among extraditable offenses in all future treaties.

SEC. 14. Penal Provisions. – (a) Penalties for the Crime of Money Laundering. - The
penalty of imprisonment ranging from seven (7) to fourteen (14) years and a fine of
not less than Three Million Philippine pesos (PhP3,000,000.00) but not more than
twice the value of the monetary instrument or property involved in the offense, shall
be imposed upon a person convicted under Section 4(a) of this Act.

The penalty of imprisonment from four (4) to seven (7) years and a fine of not less
than One million five hundred thousand Philippine pesos (PhP1,500,000.00) but not
more than Three million Philippine pesos (PhP3,000,000.00), shall be imposed upon a
person convicted under Section 4(b) of this Act.

The penalty of imprisonment from six (6) months to four (4) years or a fine of not less
than One hundred thousand Philippine pesos (PhP100,000.00) but not more than Five
hundred thousand Philippine pesos (PhP500,000.00), or both, shall be imposed on a
person convicted under Section 4(c) of this Act.

(b) Penalties for Failure to Keep Records. - The penalty of imprisonment from six (6)
months to one (1) year or a fine of not less than One hundred thousand Philippine
pesos (PhP100,000.00) but not more than Five hundred thousand Philippine pesos
(PhP500,000.00), or both, shall be imposed on a person convicted under Section 9(b)
of this Act.

(c) Malicious Reporting. - Any person who, with malice, or in bad faith, reports or files
a completely unwarranted or false information relative to money laundering
transaction against any person shall be subject to a penalty of six (6) months to four
(4) years imprisonment and a fine of not less than One hundred thousand Philippine
pesos (PhP100,000.00) but not more than Five hundred thousand Philippine pesos
(PhP500,000.00), at the discretion of the court: Provided, That the offender is not
entitled to avail the benefits of the Probation Law.

If the offender is a corporation, association, partnership or any juridical person, the

penalty shall be imposed upon the responsible officers, as the case may be, who
participated in the commission of the crime or who shall have knowingly permitted or
failed to prevent its commission. If the offender is a juridical person, the court may
suspend or revoke its license. If the offender is an alien, he shall, in addition to the
penalties herein prescribed, be deported without further proceedings after serving
the penalties herein prescribed. If the offender is a public official or employee, he
shall, in addition to the penalties prescribed herein, suffer perpetual or temporary
absolute disqualification from office, as the case may be.

Any public official or employee who is called upon to testify and refuses to do the
same or purposely fails to testify shall suffer the same penalties prescribed herein.

(d) Breach of Confidentiality. - The punishment of imprisonment ranging from three

(3) to eight (8) years and a fine of not less than Five hundred thousand Philippine
pesos (PhP500,000.00) but not more than One million Philippine pesos
(PhP1,000,000.00), shall be imposed on a person convicted for a violation under
Section 9(c).

SEC. 15. System of Incentives and Rewards. – A system of special incentives and
rewards is hereby established to be given to the appropriate government agency and
its personnel that led and initiated an investigation, prosecution and conviction of
persons involved in the offense penalized in Section 4 of this Act.

SEC. 16. Prohibitions Against Political Harassment. – This Act shall not be used for
political persecution or harassment or as an instrument to hamper competition in
trade and commerce.

No case for money laundering may be filed against and no assets shall be frozen,
attached or forfeited to the prejudice of a candidate for an electoral office during an
election period.

SEC. 17. Restitution. – Restitution for any aggrieved party shall be governed by the
provisions of the New Civil Code.
SEC. 18. Implementing Rules and Regulations. – Within thirty (30) days from the
effectivity of this Act, the Bangko Sentral ng Pilipinas, the Insurance Commission and
the Securities and Exchange Commission shall promulgate the rules and regulations
to implement effectively the provisions of this Act. Said rules and regulations shall be
submitted to the Congressional Oversight Committee for approval.

Covered institutions shall formulate their respective money laundering prevention

programs in accordance with this Act including, but not limited to, information
dissemination on money laundering activities and its prevention, detection and
reporting, and the training of responsible officers and personnel of covered
institutions.

SEC. 19. Congressional Oversight Committee. – There is hereby created a

Congressional Oversight Committee composed of seven (7) members from the
Senate and seven (7) members from the House of Representatives. The members
from the Senate shall be appointed by the Senate President based on the
proportional representation of the parties or coalitions therein with at least two (2)
Senators representing the minority. The members from the House of Representatives
shall be appointed by the Speaker also based on proportional representation of the
parties or coalitions therein with at least two (2) members representing the minority.

The Oversight Committee shall have the power to promulgate its own rules, to
oversee the implementation of this Act, and to review or revise the implementing
rules issued by the Anti-Money Laundering Council within thirty (30) days from the
promulgation of the said rules.

SEC. 20. Appropriations Clause. – The AMLC shall be provided with an initial
appropriation of Twenty-five million Philippine pesos (PhP25,000,000.00) to be drawn
from the national government. Appropriations for the succeeding years shall be
included in the General Appropriations Act.

SEC. 21. Separability Clause. – If any provision or section of this Act or the application
thereof to any person or circumstance is held to be invalid, the other provisions or
sections of this Act, and the application of such provision or section to other persons
or circumstances, shall not be affected thereby.

SEC. 22. Repealing Clause. – All laws, decrees, executive orders, rules and
regulations or parts thereof, including the relevant provisions of Republic Act No.
1405, as amended; Republic Act No. 6426, as amended; Republic Act No. 8791, as
amended and other similar laws, as are inconsistent with this Act, are hereby
repealed, amended or modified accordingly.

SEC. 23. Effectivity. – This Act shall take effect fifteen (15) days after its complete
publication in the Official Gazette or in at least two (2) national newspapers of
general circulation.

The provisions of this Act shall not apply to deposits and investments made prior to
its effectivity.

Approved:

(Sgd.) FRANKLIN M. DRILON (Sgd.) JOSE DE VENECIA JR.

President of the Senate Speaker of the House
of Representatives

This Act which is a consolidation of House Bill No. 3083 and Senate Bill No. 1745 was
finally passed by the House of Representatives and the Senate on September 29,
2001.

(Sgd.) OSCAR G. YABES (Sgd.) ROBERTO P. NAZARENO

Secretary of the Senate Secretary-General
House of Representatives
Approved:

II. RULES AND REGULATIONS IMPLEMENTING

THE ANTI-MONEY LAUNDERING ACT OF 2001
(Republic Act No. 9160)

RULE 1
POLICY AND APPLICATION

Section 1. Title. - These Rules shall be known and cited as the "Rules and Regulations
Implementing Republic Act No. 9160" (the Anti-Money Laundering Act of 2001
[AMLA]).

Sec. 2. Purpose. - These Rules are promulgated to prescribe the procedures and
guidelines for the implementation of the AMLA.

Sec. 3. Declaration of Policy. – It is the policy of the State that:

(a) The integrity and confidentiality of bank accounts shall be protected and
preserved;

(b) The Philippines shall not be used as a money laundering site for the
proceeds of any unlawful activity; and

(c) Consistent with its foreign policy, the Philippines shall extend cooperation
in transnational investigations and prosecutions of persons involved in money
laundering activities wherever committed.

Sec. 4. Definition of Terms. -

(a) "Covered institutions" refer to the following:
(1) Banks, offshore banking units, quasi-banks, trust entities, non-stock
savings and loan associations, pawnshops, and all other institutions
including their subsidiaries and affiliates supervised and/or regulated
by the Bangko Sentral ng Pilipinas (BSP).

A subsidiary means an entity more than fifty percent (50%) of the

outstanding voting stock of which is owned by a bank, quasi-bank,
trust entity or any other institution supervised or regulated by the BSP.

An affiliate means an entity at least twenty percent (20%) but not

exceeding fifty percent (50%) of the voting stock of which is owned by
a bank, quasi-bank, trust entity, or any other institution supervised
and/or regulated by the BSP.

(2) Insurance companies, insurance agents, insurance brokers,

professional reinsurers, reinsurance brokers, holding companies,
holding company systems and all other persons and entities
supervised and/or regulated by the Insurance Commission (IC).

An insurance company includes those entities authorized to transact

insurance business in the Philippines, whether life or non-life and
whether domestic, domestically incorporated or branch of a foreign
entity. A contract of insurance is an agreement whereby one
undertakes for a consideration to indemnify another against loss,
damage or liability arising from an unknown or contingent event.
Transacting insurance business includes making or proposing to make,
as insurer, any insurance contract, or as surety, any contract of
suretyship as a vocation and not as merely incidental to any other
legitimate business or activity of the surety, doing any kind of business
specifically recognized as constituting the doing of an insurance
business within the meaning of Presidential Decree (P. D.) No. 612, as
amended, including a reinsurance business and doing or proposing to
do any business in substance equivalent to any of the foregoing in a
manner designed to evade the provisions of P. D. No. 612, as
amended.

An insurance agent includes any person who solicits or obtains

insurance on behalf of any insurance company or transmits for a
person other than himself an application for a policy or contract of
insurance to or from such company or offers or assumes to act in the
negotiation of such insurance.

An insurance broker includes any person who acts or aids in any

manner in soliciting, negotiating or procuring the making of any
insurance contract or in placing risk or taking out insurance, on behalf
of an insured other than himself.

A professional reinsurer includes any person, partnership, association

or corporation that transacts solely and exclusively reinsurance
business in the Philippines, whether domestic, domestically
incorporated or a branch of a foreign entity. A contract of reinsurance
is one by which an insurer procures a third person to insure him
against loss or liability by reason of such original insurance.
A reinsurance broker includes any person who, not being a duly
authorized agent, employee or officer of an insurer in which any
reinsurance is effected, acts or aids in any manner in negotiating
contracts of reinsurance or placing risks of effecting reinsurance, for
any insurance company authorized to do business in the Philippines.

A holding company includes any person who directly or indirectly

controls any authorized insurer.

A holding company system includes a holding company together with

its controlled insurers and controlled persons.

(3) (i) Securities dealers, brokers, salesmen, associated persons of

brokers or dealers, investment houses, investment agents and
consultants, trading advisors, and other entities managing securities or
rendering similar services, (ii) mutual funds or open-end investment
companies, close-end investment companies, common trust funds,
pre-need companies or issuers and other similar entities; (iii) foreign
exchange corporations, money changers, money payment, remittance,
and transfer companies and other similar entities, and (iv) 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 and/or
regulated by the Securities and Exchange Commission (SEC).

A securities broker includes a person engaged in the business of

buying and selling securities for the account of others.

A securities dealer includes any person who buys and sells securities
for his/her account in the ordinary course of business.

A securities salesman includes a natural person, employed as such or

as an agent, by a dealer, issuer or broker to buy and sell securities.

An associated person of a broker or dealer includes an employee

thereof who directly exercises control of supervisory authority, but
does not include a salesman, or an agent or a person whose functions
are solely clerical or ministerial.

An investment house includes an enterprise which engages or purports

to engage, whether regularly or on an isolated basis, in the
underwriting of securities of another person or enterprise, including
securities of the Government and its instrumentalities.

A mutual fund or an open-end investment company includes an

investment company which is offering for sale or has outstanding, any
redeemable security of which it is the issuer.

A closed-end investment company includes an investment company

other than open-end investment company.

A common trust fund includes a fund maintained by an entity

authorized to perform trust functions under a written and formally
 established plan, exclusively for the collective investment and
reinvestment of certain money representing participation in the plan
received by it in its capacity as trustee, for the purpose of
administration, holding or management of such funds and/or properties
for the use, benefit or advantage of the trustor or of others known as
beneficiaries.

A pre-need company or issuer includes any corporation supervised

and/or regulated by the SEC and is authorized or licensed to sell or
offer for sale pre-need plans.

A foreign exchange corporation includes any enterprise which engages

or purports to engage, whether regularly or on an isolated basis, in the
sale and purchase of foreign currency notes and such other foreign-
currency denominated non-bank deposit transactions as may be
authorized under its articles of incorporation.

An investment agent or consultant or trading advisor includes any

person who is engaged in the business of advising others as to the
value of any security and the advisability of trading in any security or
in the business of issuing reports or making analysis of capital markets.
However, in case the issuance of reports or the rendering of the
analysis of capital markets is solely incidental to the conduct of the
business or profession of banks, trust companies, journalists, reporters,
columnists, editors, lawyers, accountants, teachers, and publishers of
newspapers and business or financial publications of general and
regular circulation, including their employees, they shall not be
deemed to be investment agents or consultants or trade advisors
within the contemplation of the AMLA and these Rules.

A money changer includes any person in the business of buying or

selling foreign currency notes.

A money payment, remittance and transfer company includes any

person offering to pay, remit or transfer or transmit money on behalf of
any person to another person.

(b) "Customer" refers to any person or entity that keeps an account, or

otherwise transacts business, with a covered institution and any person or
entity on whose behalf an account is maintained or a transaction is
conducted, as well as the beneficiary of said transactions. A customer also
includes the beneficiary of a trust, an investment fund, a pension fund or a
company or person whose assets are managed by an asset manager, or a
grantor of a trust. It includes any insurance policy holder, whether actual or
prospective.

(c) "Monetary Instrument" refers to:

(1) Coins or currency of legal tender of the Philippines, or of any other

country;

(2) Drafts, checks and notes;

 (3) 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 market instruments;

(4) Other similar instruments where title thereto passes to another by

endorsement, assignment or delivery; and

(5) Contracts or policies of insurance, life or non-life, and contracts of

suretyship.

(d) "Offender" refers to any person who commits a money laundering offense.

(e) "Person" refers to any natural or juridical person.

(f) "Proceeds" refers to an amount derived or realized from an unlawful

activity. It includes:

(1) All material results, profits, effects and any amount realized from
any unlawful activity;

(2) All monetary, financial or economic means, devices, documents,

papers or things used in or having any relation to any unlawful activity;
and

(3) All moneys, expenditures, payments, disbursements, costs, outlays,

charges, accounts, refunds and other similar items for the financing,
operations, and maintenance of any unlawful activity.

(g) "Property" includes any thing or item of value, real or personal, tangible or
intangible, or any interest therein or any benefit, privilege, claim or right with
respect thereto.

(h) "Supervising Authority" refers to the BSP, the SEC and the IC. Where the
SEC supervision applies only to the incorporation of the registered institution,
within the limits of the AMLA, the SEC shall have the authority to require and
ask assistance from the government agency having regulatory power and/or
licensing authority over said covered institution for the implementation and
enforcement of the AMLA and these Rules.

(i) "Transaction" refers to any act establishing any right or obligation or giving
rise to any contractual or legal relationship between the parties thereto. It
also includes any movement of funds by any means with a covered institution.
Sec. 5. Limitations of the Rules. -
(a) The provisions of the AMLA and these Rules shall not apply to deposits,
investments, and all other accounts of customers with covered institutions
that were opened or created prior to the effectivity of the AMLA on October
17, 2001. Hence, no covered transaction reports, investigation and
prosecution of money laundering cases, or any other action authorized under
the AMLA, may be undertaken with respect to such deposits, investments and
accounts as well as transactions or circumstances in relation thereto, that
have been completed prior to October 17, 2001. However, the AMLA and
 these Rules shall apply to all movements of funds respecting such deposits,
investments and accounts as well as transactions or circumstances in relation
thereto, that are initiated or commenced on or after October 17, 2001.

(b) The AMLA and these Rules shall not be used for political persecution or
harassment or as an instrument to hamper competition in trade and
commerce.

RULE 2
COMPOSITION AND PROCEEDINGS OF
THE ANTI-MONEY LAUNDERING COUNCIL

Section 1. Composition. – The members of the Anti-Money Laundering Council (AMLC)

created under the AMLA shall be the Governor of the BSP, the Insurance
Commissioner and the Chairman of the SEC. The Governor of the BSP shall be the
Chairman.

Sec. 2. Collegiality. – The AMLC is a collegial body where the Chairman and the
members of the AMLC are entitled to one (1) vote each.

Sec. 3. Unanimous Decision. – The AMLC shall act unanimously in discharging its
functions as defined in the AMLA and in these Rules. However, in the case of the
incapacity, absence or disability of any member to discharge his functions, the officer
duly designated or authorized to discharge the functions of the Governor of the BSP,
the Chairman of the SEC or the Insurance Commissioner, as the case may be, shall
act in his stead in the AMLC.

Sec. 4. Delegation of Authority. – Action on routinary administrative matters may be

delegated to any member of the AMLC or to any ranking official of the Secretariat
under such guidelines as the AMLC may determine.

Sec. 5. Secretariat. –

(a) The Secretariat shall be headed by an Executive Director who shall be

appointed by the AMLC for a term of five (5) years. He must be a member of
the Philippine Bar, at least thirty-five (35) years of age and of good moral
character, unquestionable integrity and known probity. He shall be considered
a regular employee of the BSP with the rank of Assistant Governor, and shall
be entitled to such benefits and subject to such rules and regulations as are
applicable to officers of similar rank.

(b) Other than the Executive Director whose qualifications are provided for in
the preceding paragraph, in organizing the Secretariat, the AMLC may only
choose from among those who have served, continuously or cumulatively, for
at least five (5) years in the BSP, the SEC or the IC, but who need not be
incumbents therein at the time of their appointment in the Secretariat. All
members of the Secretariat shall be considered regular employees of the BSP
and shall be entitled to such benefits and subject to such rules and
regulations as are applicable to BSP employees of similar rank.
Sec. 6. Detail and Secondment of Personnel. – The AMLC is authorized under Section
7 (10) of the AMLA to enlist the assistance of the BSP, the SEC or the IC or any other
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. This includes the use of any member of their
personnel who may be detailed or seconded to the AMLC, subject to existing laws
and Civil Service Rules and Regulations.

Sec. 7. Confidentiality of Proceedings. – The members of the AMLC, the Executive

Director, and all the members of the Secretariat, whether permanent, on detail or on
secondment, shall not reveal in any manner except under orders of the court, the
Congress or any government office or agency authorized by law, or under such
conditions as may be prescribed by the AMLC, any information known to them by
reason of their office. In case of violation of this provision, the person shall be
punished in accordance with the pertinent provisions of R. A. Nos. 3019, 6713 and
7653.

Sec. 8. Meetings. – The AMLC shall meet every first Monday of the month or as often
as may be necessary at the call of the Chairman. Subject to the rule on
confidentiality in the immediately preceding section, the meetings of the AMLC may
be conducted through modern technologies such as, but not limited to,
teleconferencing and video-conferencing.

Sec. 9. Budget. – The budget appropriated by the Congress shall be used to defray
operational expenses of the AMLC, including indemnification for legal costs and
expenses reasonably incurred for the services of external counsel or in connection
with any civil, criminal or administrative action, suit or proceedings to which
members of the AMLC and the Executive Director and other members of the
Secretariat may be made a party by reason of the performance of their functions or
duties.

RULE 3
POWERS OF THE AMLC

Section 1. Authority to Initiate Investigations on the Basis of Voluntary Citizens’

Complaints and Government Agency Referrals. -
(a) Any person, including covered institutions not subject to any account
secrecy laws and branches, departments, bureaus, offices, agencies and
instrumentalities of the government, including government-owned and –
controlled corporations, may report to the AMLC any activity that engenders
reasonable belief that any money laundering offense under Section 4 of the
AMLA and defined under Rule 4 of these Rules is about to be, is being or has
been committed.

(b) The person so reporting shall file a Voluntary Citizens’ Complaint (VCC) or
Government Referral (GR) in the form prescribed by the AMLC. The VCC and
GR forms shall indicate that the members of the AMLC, the Executive Director
and all the members of the Secretariat are bound by the confidentiality rule
provided in Section 7, Rule 2 of these Rules. The VCC shall be signed by the
complainant. The GR shall be signed by the authorized representative of the
government agency concerned, indicating his current position and rank
therein.
 (c) Any person who files a VCC or GR shall not incur any liability for all their
acts in relation thereto that were done in good faith. However, any person
who, with malice, or in bad faith, reports or files a completely unwarranted or
false information relative to any money laundering transaction against any
person shall be subject to the penalties provided for under Section 14 (c) of
the AMLA.

(d) On the basis of the VCC or GR, the AMLC may initiate investigation thereof,
and based on the evidence gathered, the AMLC may cause the filing of
criminal complaints with the Department of Justice or the Ombudsman for the
prosecution of money laundering offenses.

Sec. 2. Authority to Initiate Investigations on the Basis of Covered Transaction

Reports. -
(a) Covered Transactions. The mandatory duty and obligation of covered
institutions to make reports to the AMLC covers the following transactions:
(1) A single transaction involving an amount in excess of Four million
Philippine pesos (Php4,000,000.00) or an equivalent amount in foreign
currency based on the prevailing exchange rate where the client is not
properly identified and/or the amount is not commensurate with his
business or financial capacity.

(2) A single transaction involving an amount in excess of Four million

Philippine pesos (Php4,000,000.00) or an equivalent amount in foreign
currency based on the prevailing exchange rate which has no
underlying legal or trade obligation, purpose, origin, or economic
justification.

(3) A series or combination of transactions conducted within five (5)

consecutive banking days aggregating to a total amount in excess of
Four million Philippine pesos (Php4,000,000.00) or an equivalent in
foreign currency based on the prevailing exchange rate where the
client is not properly identified and/or the amount is not commensurate
with his business or financial capacity.

(4) A series or combination of transactions conducted within five (5)

consecutive banking days aggregating to a total amount in excess of
Four million Philippine pesos (Php4,000,000.00) or an equivalent in
foreign currency based on the prevailing exchange rate exchange rate
where most, if not all the transactions, do not have any underlying
legal or trade obligation, purpose, origin, or economic justification.

(5) A single unusually large and complex transaction in excess of Four

million Philippine pesos (Php4,000,000.00), especially a cash deposit or
investment having no credible purpose or origin, underlying trade
obligation or contract, regardless of whether or not the client is
properly identified and/or the amount is commensurate with his
business or financial capacity.

(6) A series, combination or pattern of unusually large and complex

transactions aggregating to, without reference to any period, a total
amount in excess of Four million Philippine pesos (Php4,000,000.00),
especially cash deposits and/or investments having no credible
purpose or origin, underlying trade obligation or contract, regardless of
 whether or not the client is properly identified and/or the amount is
commensurate with his business or financial capacity.

(b) Obligation to Report Covered Transactions. All covered institutions

supervised or regulated by the BSP, the SEC and the IC shall report all covered
transactions to the AMLC within five (5) working days from the date of the
transaction or from the date when the covered institution concerned
gained/acquired information/knowledge that the transaction is a covered
transaction.

(c) Covered Transaction Report Form. The Covered Transaction Report (CTR)
shall be in the form prescribed by the appropriate Supervising Authority and
approved by the AMLC. It shall be signed by the employee(s) who dealt
directly with the customer in the transaction and/or who made the initial
internal report within the covered institution, the compliance officer or his
equivalent, and a senior official of the bank with a rank not lower than senior
vice-president. The CTR shall be filed with the AMLC in a central location, to
be determined by the AMLC, as indicated in the instructions on the CTR form.

(d) Exemption from Bank Secrecy Laws. When reporting covered transactions
to the AMLC, banks and their officers, employees, representatives, agents,
advisors, consultants or associates shall not be deemed to have violated R. A.
No. 1405, as amended, R. A. No. 6426, as amended, R. A. No. 8791 and other
similar laws.

(e) Safe Harbor Provision. No administrative, criminal or civil proceedings shall

lie against any person for having made a covered 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.

(f) Filing of Criminal Complaints. On the basis of the CTR, the AMLC may
initiate investigation thereof, and based on the evidence gathered, the AMLC
may cause the filing of criminal complaints with the Department of Justice or
the Ombudsman for the prosecution of money laundering offenses.

(g) Malicious Reporting. Any person who, with malice, or in bad faith, reports
or files a completely unwarranted or false information relative to any money
laundering transaction against any person, shall be subject to a penalty of
imprisonment from six (6) months to four (4) years and a fine of not less than
One hundred thousand Philippine pesos (Php100,000.00) but not more than
Five hundred thousand Philippine pesos (Php500,000.00), at the discretion of
the court: Provided, That the offender is not entitled to avail of the benefits
under the Probation Law.

If the offender is a corporation, association, partnership or any juridical

person, the penalty shall be imposed upon the responsible officers, as the
case may be, who participated or failed to prevent its commission. If the
offender is a juridical person, the court may suspend or revoke its license. If
the offender is an alien, he shall, in addition to the penalties herein
prescribed, be deported without further proceedings after serving the
penalties herein prescribed. If the offender is a public official or employee, he
shall, in addition to the penalties prescribed herein, suffer perpetual or
temporary absolute disqualification from office, as the case may be.
 (h) Breach of Confidentiality. When reporting covered transactions to the
AMLC, covered institutions and their officers, employees, representatives,
agents, advisors, consultants or associates are prohibited from
communicating, directly or indirectly, in any manner or by any means, to any
person, entity, or the media, the fact that a covered 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, electronic mail, or other similar devices. Violation of this
provision shall constitute the offense of breach of confidentiality punished
under Section 14 (d) of the AMLA with imprisonment from three (3) to eight
(8) years and a fine of not less than Five hundred thousand Philippine pesos
(Php500,000.00) but not more than One million Philippine pesos
(Php1,000,000.00).

(i) File of Covered Transactions. – Covered institutions shall maintain a

complete file on all covered transactions that have been reported to the
AMLC. Covered institutions shall undertake the necessary adequate security
measures to ensure the confidentiality of such file. The file of covered
transactions shall be kept for at least five (5) years: Provided, That if money
laundering cases based thereon have been filed in court, the file must be
retained beyond the five(5)-year period until it is confirmed that the case has
been finally resolved or terminated by the court.

Sec. 3. Authority to Freeze Accounts. –

(a) The AMLC is authorized under Sections 6 (6) and 10 of the AMLA to freeze
any account or any monetary instrument or property subject thereof upon
determination that probable cause exists that the same is in any way related
to any unlawful activity and/or money laundering offense. The AMLC may
freeze any account or any monetary instrument or property subject thereof
prior to the institution or in the course of, the criminal proceedings involving
the unlawful activity and/or money laundering offense to which said account,
monetary instrument or property is any way related. For purposes of Section
10 of the AMLA and Section 3, Rule 3 of these Rules, probable cause includes
such facts and circumstances which would lead a reasonably discreet, prudent
or cautious man to believe that an unlawful activity and/or a money
laundering offense is about to be, is being or has been committed and that
the account or any monetary instrument or property subject thereof sought to
be frozen is in any way related to said unlawful activity and/or money
laundering offense.

(b) The freeze order on such account shall be effective immediately for a
period not exceeding fifteen (15) days.

(c) The AMLC must serve notice of the freeze order upon the covered
institution concerned and the owner or holder of the deposit, investment or
similar account, simultaneously with the issuance thereof. Upon receipt of the
notice of the freeze order, the covered institution concerned shall immediately
stop, freeze, block, suspend or otherwise place under its absolute control the
account and the monetary instrument or property subject thereof.

(d) The owner or holder of the account so notified shall have a non-extendible
period of seventy-two (72) hours upon receipt of the notice to file a verified
explanation with the AMLC why the freeze order should be lifted. Failure of the
 owner or holder of the account to file such verified explanation shall be
deemed waiver of his right to question the freeze order.

(e) The AMLC shall have seventy-two (72) hours from receipt of the written
explanation of the owner or holder of the frozen account to resolve the same.
If the AMLC fails to act within said period, the freeze order shall automatically
be dissolved. However, the covered institution shall not lift the freeze order
without securing official confirmation from the AMLC.

(f) Before the fifteen (15)-day period expires, the AMLC may apply in court for
an extension of said period. Upon the timely filing of such application and
pending the decision of the court to extend the period, said period shall be
suspended and the freeze order shall remain effective.

(g) In case the court denies the application for extension, the freeze order
shall remain effective only for the balance of the fifteen (15)-day period.

(h) No court shall issue a temporary restraining order or writ of injunction

against any freeze order issued by the AMLC or any court order extending
period of effectivity of the freeze order except the Court of Appeals or the
Supreme Court.

(i) No assets shall be frozen to the prejudice of a candidate for an electoral

office during an election period.

Sec. 4. Authority to Inquire into Accounts. –

(a) The AMLC is authorized under Section 7 (2) of the AMLA to issue orders
addressed to the appropriate Supervising Authority or any covered institution
to determine and reveal the true identity of the owner of any monetary
instrument or property subject of a covered transaction report, or a request
for assistance from a foreign State, or believed by the AMLC, on the basis of
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. For purposes of the AMLA
and these Rules, substantial evidence includes such relevant evidence as a
reasonable mind might accept as adequate to support a conclusion.

(b) In case of any violation of the AMLA involving bank deposits and
investments, the AMLC may inquire into or examine any particular deposit or
investment with any banking institution or non-bank financial institution upon
order of any competent court when the AMLC has established that there is
probable cause that the deposits or investments involved are in any way
related to any unlawful activity and/or money laundering offense. The AMLC
may file the application for authority to inquire into or examine any particular
bank deposit or investment in court, prior to the institution or in the course of,
the criminal proceedings involving the unlawful activity and/or money
laundering offense to which said bank deposit or investment is any way
related. For purposes of Section 11 of the AMLA and Section 4, Rule 3 of these
Rules, probable cause includes such facts and circumstances which would
lead a reasonably discreet, prudent or cautious man to believe that an
unlawful activity and/or a money laundering offense is about to be, is being or
has been committed and that the bank deposit or investment sought to be
inquired into or examined is in any way related to said unlawful activity and/or
money laundering offense.
Sec. 5. Authority to Institute Civil Forfeiture Proceedings. – The AMLC is authorized
under Section 7 (3) of the AMLA to institute civil forfeiture proceedings and all other
remedial proceedings through the Office of the Solicitor General.

Sec. 6. Authority to Assist the United Nations and other International Organizations
and Foreign States. – The AMLC is authorized under Sections 7 (8) and 13 (b) and (d)
of the AMLA to receive and take action in respect of any request of foreign states for
assistance in their own anti-money laundering operations. It is also authorized under
Section 7 (7) of the AMLA to cooperate with the National Government and/or take
appropriate action in respect of conventions, resolutions and other directives of the
United Nations (UN), the UN Security Council, and other international organizations of
which the Philippines is a member. However, the AMLC may refuse to comply with
any such request, convention, resolution or directive where the action sought therein
contravenes the provision of the Constitution or the execution thereof is likely to
prejudice the national interest of the Philippines.

Sec. 7. Authority to Develop and Implement Educational Programs. – The AMLC is

authorized under Section 7 (9) of the AMLA 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 prosecuting and punishing offenders. The AMLC shall conduct nationwide
information campaigns to heighten awareness of the public of their civic duty as
citizens to report any and all activities which engender reasonable belief that a
money laundering offense under Section 4 of the AMLA is about to be, is being or has
been committed.

Sec. 8. Authority to Issue, Clarify and Amend the Rules and Regulations Implementing
R. A. No. 9160. – The AMLC is authorized under Sections 7 (7), 18 and 19 of the AMLA
to promulgate as well as clarify and/or amend, as may be necessary, these Rules.
The AMLC may make appropriate issuances for this purpose.

Sec. 9. Authority to Establish Information Sharing System. – Subject to such

limitations as provided for by law, the AMLC is authorized under Section 7 (7) of the
AMLA to establish an information sharing system that will enable the AMLC to store,
track and analyze money laundering transactions for the resolute prevention,
detection and investigation of money laundering offenses. For this purpose, the AMLC
shall install a computerized system that will be used in the creation and maintenance
of an information database. The AMLC is also authorized, under Section 7 (9) of the
AMLA to enter into memoranda of agreement with the intelligence units of the Armed
Forces of the Philippines, the Philippine National Police, the Department of Finance,
the Department of Justice, as well as their attached agencies, and other domestic or
transnational governmental or non-governmental organizations or groups for sharing
of all information that may, in any way, facilitate the resolute prevention,
investigation and prosecution of money laundering offenses and other violations of
the AMLA.

Sec. 10. Authority to Establish System of Incentives and Rewards. – The AMLC is
authorized under Section 15 of the AMLA to establish a system of special incentives
and rewards to be given to the appropriate government agency and its personnel
that led and initiated the investigation, prosecution, and conviction of persons
involved in money laundering offenses under Section 4 of the AMLA. Any monetary
reward shall be made payable out of the funds appropriated by Congress.

Sec. 11. Other Inherent, Necessary, Implied or Incidental Powers. – The AMLC shall
perform such other functions and exercise such other powers as may be inherent,
necessary, implied or incidental to the functions assigned, and powers granted, to it
under the AMLA for the purpose of carrying out the declared policy of the AMLA.

RULE 4
MONEY LAUNDERING OFFENSES

Section 1. Money Laundering Offenses and their Corresponding Penalties. – Money

laundering is a crime whereby the proceeds of an unlawful activity are transacted,
thereby making them appear to have originated from legitimate sources. It is a
process comprising of three (3) stages, namely, placement or the physical disposal of
the criminal proceeds, layering or the separation of the criminal proceeds from their
source by creating layers of financial transactions to disguise the audit trail, and
integration or the provision of apparent legitimacy to the criminal proceeds. Any
transaction involving such criminal proceeds or attempt to transact the same during
the placement, layering or integration stage shall constitute the crime of money
laundering.
(a) When it is committed by a person who, knowing that any monetary
instrument or property represents, involves, or relates to, the proceeds of any
unlawful activity, transacts or attempts to transact said monetary instrument
or property, the penalty is imprisonment from seven (7) to fourteen (14) years
and a fine of not less than Three million Philippine pesos (Php3,000,000.00)
but not more than twice the value of the monetary instrument or property
involved in the offense.

(b) When it is committed by a person who, knowing that any monetary

instrument or property involves the proceeds of any unlawful activity,
performs or fails to perform any act, as a result of which he facilitates the
offense of money laundering referred to in paragraph (a) above, the penalty is
imprisonment from four (4) to seven (7) years and a fine of not less than One
million five hundred thousand Philippine pesos (Php1,500,000.00) but not
more than Three million Philippine pesos (Php3,000,000.00).

(c) When it is committed by a person who, knowing that any monetary

instrument or property is required under this Act to be disclosed and filed with
the AMLC, fails to do so, the penalty is imprisonment from six (6) months to
four (4) years or a fine of not less than One hundred thousand Philippine
pesos (Php100,000.00) but not more than Five hundred thousand Philippine
pesos (Php500,000.00), or both.

Sec. 2. Unlawful Activities. - These refer to any act or omission or series or

combination thereof involving or having relation to the following:
(a) Kidnapping for ransom under Article of Act No. 3815, the Revised Penal
Code, as amended;
(b) Robbery and extortion under Articles 294, 295, 296, 299, 300, 301 and
302 of the same Code;
(c) Qualified theft under Article 310 of the same Code;
(d) Swindling under Article 315 of the same Code;
(e) Piracy on the high seas under the same Code and Presidential Decree
(P.D.) No. 532;
(f) Destructive arson and murder as defined under the same Code and
hijacking and other violations under Republic Act (R. A.) No. 6235, including
those perpetrated by terrorists against non-combatant persons and similar
 targets;
(g) Jueteng and Masiao punished as illegal gambling under P.D. No. 1602;
(h) Smuggling under R. A. Nos. 455 and 1937;
(i) Section 3, paragraphs B, C, E, G, H and I of R. A. No. 3019, the Anti-Graft
and Corrupt Practices Act, as amended;
(j) Sections 3, 4, 5, 7, 8 and 9 of Article Two of R. A. No. 6425, the Dangerous
Drugs Act of 1972 as amended;
(k) Plunder under R. A. No. 7080, as amended;
(l) Violations under R. A. No. 8792, the Electronic Commerce ct of 2000;
(m) Fraudulent practices and other violations under R. A. No. 8799, the
Securities Regulation Code of 2000; and
(n) Felonies or offenses of a similar nature that are punishable under the
penal laws of other countries.
Sec. 3. Jurisdiction of Money Laundering Cases. – The Regional Trial Courts shall have
the jurisdiction to try all cases on money laundering. Those committed by public
officers and private persons who are in conspiracy with such public officers shall be
under the jurisdiction of the Sandiganbayan.

Sec. 4. Prosecution of Money Laundering. –

(a) Any person may be charged with and convicted of both the offense of
money laundering and the unlawful activity as defined under Section 3 (i) of
the AMLA.

(b) Any proceeding relating to the unlawful activity shall be given precedence
over the prosecution of any offense or violation under the AMLA without
prejudice to the issuance by the AMLC of a freeze order with respect to the
deposit, investment or similar account involved therein and resort to other
remedies provided under the AMLA.

(c) Knowledge of the offender that any monetary instrument or property

represents, involves, or relates to the proceeds of an unlawful activity or that
any monetary instrument or property is required under the AMLA to be
disclosed and filed with the AMLC, may be established by direct evidence or
inferred from the attendant circumstances.

(d) All the elements of every money laundering offense under Section 4 of the
AMLA must be proved by evidence beyond reasonable doubt, including the
element of knowledge that the monetary instrument or property represents,
involves or relates to the proceeds of any unlawful activity. No element of the
unlawful activity, however, including the identity of the perpetrators and the
details of the actual commission of the unlawful activity need be established
by proof beyond reasonable doubt. The elements of the offense of money
laundering are separate and distinct from the elements of the felony or
offense constituting the unlawful activity.

(e) No case for money laundering may be filed to the prejudice of a candidate
for an electoral office during an election period. However, this prohibition shall
not constitute a bar to the prosecution of any money laundering case filed in
court before the election period.

(f) The AMLC may apply, in the course of the criminal proceedings, for
provisional remedies to prevent the monetary instrument or property subject
thereof from being removed, concealed, converted, commingled with other
property or otherwise to prevent its being found or taken by the applicant or
 otherwise placed or taken beyond the jurisdiction of the court. However, no
assets shall be attached to the prejudice of a candidate for an electoral office
during an election period.

(g) Where there is conviction for money laundering under Section 4 of the
AMLA, the court shall issue a judgment of forfeiture in favor of the
Government of the Philippines with respect to the monetary instrument or
property found to be proceeds of one or more unlawful activities. However, no
assets shall be forfeited to the prejudice of a candidate for an electoral office
during an election period.

(h) Restitution for any aggrieved party shall be governed by the provisions of
the New Civil Code.

RULE 5
PREVENTION OF MONEY LAUNDERING

Section 1. Customer Identification Requirements. –

(a) True Identity of Individuals as Clients. Covered institutions shall establish
appropriate systems and methods based on internationally compliant
standards and adequate internal controls for verifying and recording the true
and full identity of their customers.

For this purpose, they shall develop clear customer acceptance policies and
procedures when conducting business relations or specific transactions, such
as, but not limited to, opening of deposit accounts, accepting deposit
substitutes, entering into trust and other fiduciary transactions, renting of
safety deposit boxes, performing remittances and other large cash
transactions.

When dealing with customers who are acting as trustee, nominee, agent or in
any capacity for and on behalf of another, covered institutions shall verify and
record the true and full identity of the person(s) on whose behalf a transaction
is being conducted. Covered institutions shall also establish and record the
true and full identity of such trustees, nominees, agents and other persons
and the nature of their capacity and duties. In case a covered institution has
doubts as to whether such persons are being used as dummies in
circumvention of existing laws, it shall immediately make the necessary
inquiries to verify the status of the business relationship between the parties.

(b) Minimum Information/Documents required for Individual Customers.

Covered institutions shall require customers to produce original documents of
identity issued by an official authority, preferably bearing a photograph of the
customer. Examples of such documents are identity cards and passports.
Where practicable, file copies of documents of identity are to be kept.
Alternatively, the identity card or passport number and/or other relevant
details are to be recorded. The following minimum information/documents
shall be obtained from individual customers:

(1) Name;
(2) Present address;
 (3) Permanent address;
(4) Date and place of birth;
(5) Nationality;
(6) Nature of work and name of employer or nature of self-
employment/business;
(7) Contact numbers;
(8) Tax identification number, Social Security System number or
Government Service and Insurance System number;
(9) Specimen signature;
(10) Source of fund(s); and
(11) Names of beneficiaries in case of insurance contracts and
whenever applicable.

(c) Minimum Information/Documents Required for Corporate and Juridical

Entities. Before establishing business relationships, covered institutions shall
endeavor to ensure that the customer that is a corporate or juridical entity
has not been or is not in the process of being, dissolved, wound up or voided,
or that its business or operations has not been or is not in the process of
being, closed, shut down, phased out, or terminated. Dealings with shell
companies and corporations, being legal entities which have no business
substance in their own right but through which financial transactions may be
conducted, should be undertaken with extreme caution. The following
minimum information/documents shall be obtained from customers that are
corporate or juridical entities, including shell companies and corporations:

(1) Articles of Incorporation/Partnership;

(2) By-laws;
(3) Official address or principal business address;
(4) List of directors/partners;
(5) List of principal stockholders owning at least two percent (2%) of
the capital stock;
(6) Contact numbers;
(7) Beneficial owners, if any; and
(8) Verification of the authority and identification of the person
purporting to act on behalf of the client.

(d) Verification without Face-to-Face Contact. – To the extent and through

such means allowed under existing laws and applicable rules and regulations
of the BSP, the SEC and the IC, covered institutions may create new accounts
without face-to-face contact. However, such new accounts shall not be valid
and effective unless the customer complies with the requirements under the
two (2) immediately preceding subsections and such other requirements that
have been or will be imposed by the BSP, the SEC and the IC, as the case may
be, pursuant to Rule 5 of these Rules and/or their respective charters, within
ten (10) days from the creation of the new accounts. Unless such
requirements have been fully complied with, no transaction shall be honored
by any covered institution respecting an account created without face-to-face
contact.

(e) Acquisition of Another Covered Institution. – When a covered institution

acquires the business of another covered institution, either in whole or as a
product portfolio, it is not necessary for the identity of all existing customers
to be re-established: Provided, That all customer account records are acquired
with the business and due diligence inquiries do not raise any doubt as to
 whether or not the acquired business has fully complied with all the
requirements under the AMLA and these Rules.

(f) Risk-monitoring and Review. Covered institutions shall adopt programs for
on-going monitoring of high-risk accounts and risk management, subject to
such rules and regulations as may be prescribed by the appropriate
Supervising Authority. Regular reviews of customer base should be
undertaken to ensure that the nature of accounts and potential risks are
properly identified, monitored and controlled.

(g) Prohibition against Certain Accounts. Covered institutions shall maintain

accounts only in the true name of the account owner or holder. The provisions
of existing laws to the contrary notwithstanding, anonymous accounts,
accounts under fictitious names, incorrect name accounts and all other similar
accounts shall be absolutely prohibited.

(h) Numbered Accounts. Peso and foreign currency non-checking numbered

accounts shall be allowed: Provided, That the true identity of the customer is
satisfactorily established based on official and other reliable documents and
records, and that the information and documents required under Section 1 (b)
and (c) of Rule 5 of these Rules are obtained and recorded by the covered
institution. The BSP may conduct annual testing for the purpose of
determining the existence and true identity of the owners of such accounts.

Sec. 2. Recordkeeping Requirements. – Covered transactions shall prepare and

maintain documentation on their customer accounts, relationships and transactions
such that any account, relationship or transaction can be so reconstructed as to
enable the AMLC, the law enforcement and prosecutorial authorities, and/or the
courts to establish an audit trail for money laundering.
(a) Existing and New Accounts and New Transactions. All records of existing
and new accounts and of new transactions shall be maintained and safely
stored for five (5) years from October 17, 2001 or from the dates of the
accounts or transactions, whichever is later.

(b) Closed Accounts. With respect to closed accounts, the records on customer
identification, account files and business correspondence shall be preserved
and safely stored for at least five (5) years from the dates when they were
closed.

(c) Retention of Records in Case a Money Laundering Case Has Been Filed in
Court. – If a money laundering case based on any record kept by the covered
institution concerned has been filed in court, said file must be retained
beyond the period stipulated in the two (2) immediately preceding
subsections, as the case may be, until it is confirmed that the case has been
finally resolved or terminated by the court.

(d) Form of Records. – Records shall be retained as originals or certified true

copies on paper, microfilm or electronic form: Provided, That such forms are
admissible in court pursuant to existing laws and the applicable rules
promulgated by the Supreme Court.

(e) Penalties for Failure to Keep Records. The penalty of imprisonment from
six (6) months to one (1) year or a fine of not less than One hundred thousand
Philippine pesos (Php100,000.00) but not more than Five hundred thousand
 Philippine pesos (Php500,000.00), or both, shall be imposed on a person
convicted for a violation of Section 9 (b) of the AMLA.

Sec. 3. Money Laundering Prevention Programs. – Covered institutions shall

formulate their respective money laundering prevention programs in accordance with
Section 9 and other pertinent provisions of the AMLA and Sections 1 and 2 of Rules 3
and 4 and other pertinent provisions of these Rules, subject to such guidelines as
may be prescribed by the Supervising Authority and approved by the AMLC. Every
covered institution shall submit its own money laundering program to the Supervising
Authority concerned within a non-extendible period of sixty (60) days from the date
of effectivity of these Rules.

Every money laundering program shall establish detailed procedures implementing a

comprehensive, institution-wide "know-your-client" policy, set-up an effective
dissemination of information on money laundering activities and their prevention,
detection and reporting, adopt internal policies, procedures and controls, designate
compliance officers at management level, institute adequate screening and
recruitment procedures, and set-up an audit function to test the system.

Covered institutions shall adopt, as part of their money laundering programs, a

system of flagging and monitoring transactions that qualify as covered transactions
except that they involve amounts below the threshold to facilitate the process of
aggregating them for purposes of future reporting of such transactions to the AMLC
when their aggregated amounts breach the threshold. Covered institutions not
subject to account secrecy laws shall incorporate in their money laundering programs
the provisions of Section 1, Rule 3 of these Rules and such other guidelines for the
voluntary reporting to the AMLC of all transactions that engender the reasonable
belief that a money laundering offense is about to be, is being, or has been
committed.

Sec. 4. Training of Personnel. – Covered institutions shall provide all their responsible
officers and personnel with efficient and effective training and continuing education
programs to enable them to fully comply with all their obligations under the AMLA
and these Rules.

RULE 6
FORFEITURE

Section 1. Civil Forfeiture. - When there is a covered transaction report made, and the
court has, in a petition filed for the purpose ordered seizure of any monetary
instrument or property, in whole or in part, directly or indirectly, related to said
report, the Revised Rules of Court on civil forfeiture shall apply. However, no assets
shall be forfeited to the prejudice of a candidate for an electoral office during an
election period.

Sec. 2. Claim on Forfeited Assets. - Where the court has issued an order of forfeiture
of the monetary instrument or property in a criminal prosecution for any money
laundering offense under Section 4 of the AMLA, the offender or any other person
claiming an interest therein may apply, by verified petition, for a declaration that the
same legitimately belongs to him and for segregation or exclusion of the monetary
instrument or property corresponding thereto. The verified petition shall be filed with
the court which rendered the judgment of conviction and order of forfeiture, within
fifteen (15) days from the date of the order of forfeiture, in default of which the said
order shall become final and executory. This provision shall apply in both civil and
criminal forfeiture.

Sec. 3. Payment in lieu of Forfeiture. - Where the court has issued an order of
forfeiture of the monetary instrument or property subject of a money laundering
offense under Section 4 of the AMLA, and said order cannot be enforced because any
particular monetary instrument or property cannot, with due diligence, be located, or
it has been substantially altered, destroyed, diminished in value or otherwise
rendered worthless by any act or omission, directly or indirectly, attributable to the
offender, or it has been concealed, removed, converted or otherwise transferred to
prevent the same from being found or to avoid forfeiture thereof, or it is located
outside the Philippines or has been placed or brought outside the jurisdiction of the
court, or it has been commingled with other monetary instruments or property
belonging to either the offender himself or a third person or entity, thereby rendering
the same difficult to identify or be segregated for purposes of forfeiture, the court
may, instead of enforcing the order of forfeiture of the monetary instrument or
property or part thereof or interest therein, accordingly order the convicted offender
to pay an amount equal to the value of said monetary instrument or property. This
provision shall apply in both civil and criminal forfeiture.

RULE 7
MUTUAL ASSISTANCE AMONG STATES

Section 1. Request for Assistance from a Foreign State. - Where a foreign state
makes a request for assistance in the investigation or prosecution of a money
laundering offense, the AMLC may execute the request or refuse to execute the same
and inform the foreign state of any valid reason for not executing the request or for
delaying the execution thereof. The principles of mutuality and reciprocity shall, for
this purpose, be at all times recognized.

Sec. 2. Powers of the AMLC to Act on a Request for Assistance from a Foreign State. -
The AMLC may execute a request for assistance from a foreign state by: (a) tracking
down, freezing, restraining and seizing assets alleged to be proceeds of any unlawful
activity under the procedures laid down in the AMLA and in these Rules; (b) giving
information needed by the foreign state within the procedures laid down in the AMLA
and in these Rules; and (c) applying for an order of forfeiture of any monetary
instrument or property in the court: Provided, That the court shall not issue such an
order unless the application is accompanied by an authenticated copy of the order of
a court in the requesting state ordering the forfeiture of said monetary instrument or
property of a person who has been convicted of a money laundering offense in the
requesting state, and a certification or an affidavit of a competent officer of the
requesting state stating that the conviction and the order of forfeiture are final and
that no further appeal lies in respect of either.

Sec. 3. Obtaining Assistance From Foreign States. - The AMLC may make a request to
any foreign state for assistance in (a) tracking down, freezing, restraining and seizing
assets alleged to be proceeds of any unlawful activity; (b) obtaining information that
it needs relating to any covered transaction, money laundering offense or any other
matter directly or indirectly related thereto; (c) to the extent allowed by the law of
the foreign state, applying with the proper court therein for an order to enter any
premises belonging to or in the possession or control of, any or all of the persons
named in said request, and/or search any or all such persons named therein and/or
remove any document, material or object named in said request: Provided, That the
documents accompanying the request in support of the application have been duly
authenticated in accordance with the applicable law or regulation of the foreign
state; and (d) applying for an order of forfeiture of any monetary instrument or
property in the proper court in the foreign state: Provided, That the request is
accompanied by an authenticated copy of the order of the Regional Trial Court
ordering the forfeiture of said monetary instrument or property of a convicted
offender and an affidavit of the clerk of court stating that the conviction and the
order of forfeiture are final and that no further appeal lies in respect of either.

Sec. 4. Limitations on Requests for Mutual Assistance. - The AMLC may refuse to
comply with any request for assistance where the action sought by the request
contravenes any provision of the Constitution or the execution of a request is likely to
prejudice the national interest of the Philippines, unless there is a treaty between the
Philippines and the requesting state relating to the provision of assistance in relation
to money laundering offenses.

Sec. 5. Requirements for Requests for Mutual Assistance from Foreign States. - A
request for mutual assistance from a foreign state must (a) confirm that an
investigation or prosecution is being conducted in respect of a money launderer
named therein or that he has been convicted of any money laundering offense; (b)
state the grounds on which any person is being investigated or prosecuted for money
laundering or the details of his conviction; (c) give sufficient particulars as to the
identity of said person; (d) give particulars sufficient to identify any covered
institution believed to have any information, document, material or object which may
be of assistance to the investigation or prosecution; (e) ask from the covered
institution concerned any information, document, material or object which may be of
assistance to the investigation or prosecution; (f) specify the manner in which and to
whom said information, document, material or object obtained pursuant to said
request, is to be produced; (g) give all the particulars necessary for the issuance by
the court in the requested state of the writs, orders or processes needed by the
requesting state; and (8) contain such other information as may assist in the
execution of the request.

Sec. 6. Authentication of Documents. - For purposes of Section 13 of the AMLA and

Rule 7 of these Rules, a document is authenticated if the same is signed or certified
by a judge, magistrate or equivalent officer in or of, the requesting state, and
authenticated by the oath or affirmation of a witness or sealed with an official or
public seal of a minister, secretary of state, or officer in or of, the government of the
requesting state, or of the person administering the government or a department of
the requesting territory, protectorate or colony. The certificate of authentication may
also be made by a secretary of the embassy or legation, consul general, consul, vice
consul, consular agent or any officer in the foreign service of the Philippines stationed
in the foreign state in which the record is kept, and authenticated by the seal of his
office.

Sec. 7. Extradition. – The Philippines shall negotiate for the inclusion of money
laundering offenses as defined under Section 4 of the AMLA among the extraditable
offenses in all future treaties.

RULE 8
AMENDMENTS AND EFFECTIVITY
Section 1. Amendments. – These Rules or any portion thereof may be amended by
unanimous vote of the members of the AMLC and approved by the Congressional
Oversight Committee as provided for under Section 19 of the AMLA.

Sec. 2. Effectivity. – These Rules shall take effect after its approval by the
Congressional Oversight Committee and fifteen (15) days after the completion of its
publication in the Official Gazette or in a newspaper of general circulation.

III. EXPLANATIONS

I . DEFINITIONS:

(a) "Covered institution" refers to:

(1) banks, non-banks, quasi-banks, trust entities, and all other

institutions and their subsidiaries and affiliates supervised or regulated
by the Bangko Sentral ng Pilipinas (BSP);

(2) insurance companies and all other institutions supervised or

regulated by the Insurance Commission; and

(3)
 a. securities dealers, brokers, salesmen, investment houses
and other similar entities managing securities or rendering
services as investment agent, advisor, or consultant;

b. mutual funds, close-end investment companies, common

trust funds, pre-need companies and other similar entities;

c. foreign exchange corporations, money changers, money

payment, remittance, and transfer companies and other similar
entities; and

d. 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.

(b) "Covered transaction" is a single, series, or combination of transactions

involving a total amount in excess of Four Million Philippine pesos (PhP4,000,000.00)
or an equivalent amount in foreign currency based on the prevailing exchange rate
within five (5) consecutive banking days except those between 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.

It likewise refers to a single, series or combination or pattern of unusually large and

complex transactions in excess of Four Million Philippine pesos (PhP4,000,000.00)
especially cash deposits and investments having no credible purpose or origin,
underlying trade obligation or contract.

II. MONETARY INSTRUMENT WHICH MAY BE SUBJECT OF MONEY

LAUNDERING.

(c) "Monetary instrument" refers to:

(1) coins or currency of legal tender of the Philippines, or of any other

country;

(2) drafts, checks and notes;

(3) 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 market instruments;
and

(4) other similar instruments where title thereto passes to another by

endorsement, assignment or delivery.
 (d) "Offender" refers to any person who commits a money laundering
offense.

(e) "Person" refers to any natural or juridical person.

(f) "Proceeds" refers to an amount derived or realized from an unlawful

activity.

(g) "Supervising Authority" refers to the appropriate supervisory or

regulatory agency, department or office supervising or regulating the covered
institutions enumerated in Section 3(a).

(h) "Transaction" refers to any act establishing any right or obligation or

giving rise to any contractual or legal relationship between the parties thereto. It also
includes any movement of funds by any means with a covered institution.

III. UNLAWFUL ACTIVITIES HAVING RELATION TO MONEY LAUNDERING?

(i) Unlawful activity" refers to any act or omission or series or combination

thereof involving or having relation to the following:

(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 terrorists 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 that are punishable under

the penal laws of other countries.

III. NATURE OF THE CRIME OF 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.
It is committed by the following:

(a) Any person knowing that any monetary instrument or property represents,
involves, or relates to, the proceeds of any unlawful activity, transacts or
attempts to transact said monetary instrument or property.

(b) Any person knowing that any monetary instrument or property involves
the proceeds of any unlawful activity, performs or fails to perform any act as a
result of which he facilitates the offense of money laundering referred to in
paragraph (a) above.

(c) Any person knowing that any monetary instrument or property is required
under this Act to be disclosed and filed with the Anti-Money Laundering
Council (AMLC), fails to do so.

IV. COURT OF JURISDICTION OVER CASES OF MONEY LAUNDERING.

The regional trial courts shall have jurisdiction to try all cases on money
laundering. Those committed by public officers and private persons who are in
conspiracy with such public officers shall be under the jurisdiction of the
Sandiganbayan.

WHO MAY BE PROSECUTED FOR MONEY LAUNDERING?

(a) Any person may be charged with and convicted of both the offense of
money laundering and the unlawful activity as herein defined.

(b) Any proceeding relating to the unlawful activity shall be given precedence
over the prosecution of any offense or violation under this Act without
prejudice to the freezing and other remedies provided.
V. THE POWERS OF AMLC?

SEC. 7. Creation of Anti-Money Laundering Council (AMLC). – The Anti-Money

Laundering Council is hereby created and shall be composed of the Governor of the
Bangko Sentral ng Pilipinas as chairman, the Commissioner of the Insurance
Commission and the Chairman of the Securities and Exchange Commission as
members. The AMLC shall act unanimously in the discharge of its functions as
defined hereunder:
(1) to require and receive covered transaction reports from covered
institutions;

(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 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, 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 initiate investigations of covered transactions, money laundering

activities and other violations of this Act;

(6) to freeze any monetary instrument or property alleged to be proceeds of

any unlawful activity;

(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 money laundering, the viable
means of preventing money laundering and the effective ways of prosecuting
and punishing offenders; and

(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.
VI. MEASURES TO BE UNDERTAKEN BY BANKS AND UNDER FINANCIAL
INSTITUTION TO PREVENT MONEY LAUNDERING.

(a) Customer Identification. - Covered institutions shall establish and record

the true identity of its clients based on official documents. They shall maintain a
system of verifying the true identity of their clients and, in case of corporate clients,
require a system of verifying their legal existence and organizational structure, as
well as the authority and identification of all persons purporting to act on their behalf.

The provisions of existing laws to the contrary notwithstanding, anonymous

accounts, accounts under fictitious names, and all other similar accounts shall be
absolutely prohibited. Peso and foreign currency non-checking numbered accounts
shall be allowed. The BSP may conduct annual testing solely limited to the
determination of the existence and true identity of the owners of such accounts.

(b) Record Keeping. - All records of all transactions of covered institutions

shall be maintained and safely stored for five (5) years from the dates of
transactions. With respect to closed accounts, the records on customer identification,
account files and business correspondence, shall be preserved and safely stored for
at least five (5) years from the dates when they were closed.

(c) Reporting of Covered Transactions. - Covered institutions shall report

to the AMLC all covered transactions within five (5) working days from occurrence
thereof, unless the Supervising Authority concerned prescribes a longer period not
exceeding ten (10) working days.

When reporting covered transactions to the AMLC, covered institutions and

their officers, employees, representatives, agents, advisors, consultants or associates
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, but are
prohibited from communicating, directly or indirectly, in any manner or by any
means, to any person the fact that a covered transaction report was made, the
contents thereof, or any other information in relation thereto. In case of violation
thereof, the concerned officer, employee, representative, agent, advisor, consultant
or associate of the covered institution, shall be criminally liable.

However, no administrative, criminal or civil proceedings, shall lie against any

person for having made a covered transaction report in the regular performance of
his duties and in good faith, whether or not such reporting results in any criminal
prosecution under this Act or any other Philippine law.

When reporting covered transactions to the AMLC, covered institutions and

their officers, employees, representatives, agents, advisors, consultants or associates
are prohibited from communicating, directly or indirectly, in any manner or by any
means, to any person, entity, the media, the fact that a covered 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,
electronic mail, or other similar devices. In case of violation thereof, the concerned
officer, employee, representative, agent, advisor, consultant or associate of the
covered institution, or media shall be held criminally liable.
AUTHORITY TO FREEZE THE ACCOUNTS OF MONEY –LAUNDERERS:

Upon determination that probable cause exists that any deposit or similar account is
in any way related to an unlawful activity, the AMLC may issue a freeze order, which
shall be effective immediately, on the account for a period not exceeding fifteen (15)
days.

Step 1. Notice to the depositor that his account has been frozen shall be issued
simultaneously with the issuance of the freeze order.

Step 2. The depositor shall have seventy-two (72) hours upon receipt of the notice to
explain why the freeze order should be lifted.

Step 3. The AMLC has seventy-two (72) hours to dispose of the depositor’s
explanation. If it fails to act within seventy-two (72) hours from receipt of the
depositor’s explanation, the freeze order shall automatically be dissolved.

Step 4. The fifteen (15)-day freeze order of the AMLC may be extended upon order
of the court, provided that the fifteen (15)-day period shall be tolled pending the
court’s decision to extend the period.

MAY THE COURT ISSUE TRO OR WRIT OF INJUNCTION AGAINST FREEZE

ORDER ISSUED BY AMLC?

No court shall issue a temporary restraining order or writ of injunction against

any freeze order issued by the AMLC except the Court of Appeals or the Supreme
Court.

WHEN MAY THE AMLC INQUIRE OR EXAMINE BANK ACCOUNTS?

Notwithstanding the provisions of Republic Act No. 1405, as amended;

Republic Act No. 6426, as amended; Republic Act No. 8791, and other laws, the AMLC
may inquire into or examine any particular deposit or investment with any banking
institution or non-bank financial institution upon order of any competent court in
cases of violation of this Act when it has been established that there is probable
cause that the deposits or investments involved are in any way related to a money
laundering offense: Provided, That this provision shall not apply to deposits and
investments made prior to the effectivity of this Act.
WHAT ARE THE FORFEITURES UNDER R.A. 9160?

a) Civil Forfeiture. - When there is a covered transaction report made, and

the court has, in a petition filed for the purpose ordered seizure of any monetary
instrument or property, in whole or in part, directly or indirectly, related to said
report, the Revised Rules of Court on civil forfeiture shall apply.

(b) Claim on Forfeited Assets. - Where the court has issued an order of
forfeiture of the monetary instrument or property in a criminal prosecution for any
money laundering offense defined under Section 4 of this Act, the offender or any
other person claiming an interest therein may apply, by verified petition, for a
declaration that the same legitimately belongs to him and for segregation or
exclusion of the monetary instrument or property corresponding thereto. The verified
petition shall be filed with the court which rendered the judgment of conviction and
order of forfeiture, within fifteen (15) days from the date of the order of forfeiture, in
default of which the said order shall become final and executory. This provision shall
apply in both civil and criminal forfeiture.

( c) Payment in Lieu of Forfeiture. - Where the court has issued an order of

forfeiture of the monetary instrument or property subject of a money laundering
offense defined under Section 4, and said order cannot be enforced because any
particular monetary instrument or property cannot, with due diligence, be located, or
it has been substantially altered, destroyed, diminished in value or otherwise
rendered worthless by any act or omission, directly or indirectly, attributable to the
offender, or it has been concealed, removed, converted or otherwise transferred to
prevent the same from being found or to avoid forfeiture thereof, or it is located
outside the Philippines or has been placed or brought outside the jurisdiction of the
court, or it has been commingled with other monetary instruments or property
belonging to either the offender himself or a third person or entity, thereby rendering
the same difficult to identify or be segregated for purposes of forfeiture, the court
may, instead of enforcing the order of forfeiture of the monetary instrument or
property or part thereof or interest therein, accordingly order the convicted offender
to pay an amount equal to the value of said monetary instrument or property. This
provision shall apply in both civil and criminal forfeiture.

IS THE AMLC AUTHORIZED TO REQUEST FOR ASSISTANCE FROM FOREIGN

STATES TO FREEZE, TRACK DOWN AND SEIZE ASSETS ALLEGED TO BE
PROCEEDS OF ILLEGAL ACTIVITY?

(a) Request for Assistance from a Foreign State. - Where a foreign

State makes a request for assistance in the investigation or prosecution of a money
laundering offense, the AMLC may execute the request or refuse to execute the same
and inform the foreign State of any valid reason for not executing the request or for
delaying the execution thereof. The principles of mutuality and reciprocity shall, for
this purpose, be at all times recognized.

(b) Powers of the AMLC to Act on a Request for Assistance from a

Foreign State. - The AMLC may execute a request for assistance from a foreign
State by: (1) tracking down, freezing, restraining and seizing assets alleged to be
proceeds of any unlawful activity under the procedures laid down in this Act; (2)
giving information needed by the foreign State within the procedures laid down in
this Act; and (3) applying for an order of forfeiture of any monetary instrument or
property in the court: Provided, That the court shall not issue such an order unless
the application is accompanied by an authenticated copy of the order of a court in
the requesting State ordering the forfeiture of said monetary instrument or property
of a person who has been convicted of a money laundering offense in the requesting
State, and a certification or an affidavit of a competent officer of the requesting State
stating that the conviction and the order of forfeiture are final and that no further
appeal lies in respect of either.

(c) Obtaining Assistance from Foreign States. - The AMLC may make a
request to any foreign State for assistance in (1) tracking down, freezing, restraining
and seizing assets alleged to be proceeds of any unlawful activity; (2) obtaining
information that it needs relating to any covered transaction, money laundering
offense or any other matter directly or indirectly related thereto; (3) to the extent
allowed by the law of the foreign State, applying with the proper court therein for an
order to enter any premises belonging to or in the possession or control of, any or all
of the persons named in said request, and/or search any or all such persons named
therein and/or remove any document, material or object named in said request:
Provided, That the documents accompanying the request in support of the
application have been duly authenticated in accordance with the applicable law or
regulation of the foreign State; and (4) applying for an order of forfeiture of any
monetary instrument or property in the proper court in the foreign State: Provided,
That the request is accompanied by an authenticated copy of the order of the
regional trial court ordering the forfeiture of said monetary instrument or property of
a convicted offender and an affidavit of the clerk of court stating that the conviction
and the order of forfeiture are final and that no further appeal lies in respect of
either.

WHEN MAY THE AMLC REFUSE ON REQUEST OF MUTUAL ASSISTANCE

SOUGHT BY OTHER STATES?

(d) Limitations on Requests for Mutual Assistance. - The AMLC may refuse to
comply with any request for assistance where the action sought by the request
contravenes any provision of the Constitution or the execution of a request is likely to
prejudice the national interest of the Philippines unless there is a treaty between the
Philippines and the requesting State relating to the provision of assistance in relation
to money laundering offenses.

WHAT ARE THE REQUIREMENTS FOR REQUEST FOR MUTUAL ASSISTANCE OF

FOREIGN STATES?

A request for mutual assistance from a foreign State must

(1) confirm that an investigation or prosecution is being conducted in respect

of a money launderer named therein or that he has been convicted of any money
laundering offense;

(2) state the grounds on which any person is being investigated or prosecuted
for money laundering or the details of his conviction;
 (3) give sufficient particulars as to the identity of said person;

(4) give particulars sufficient to identify any covered institution believed to

have any information, document, material or object which may be of assistance to
the investigation or prosecution;

(5) ask from the covered institution concerned any information, document,
material or object which may be of assistance to the investigation or prosecution;

(6) specify the manner in which and to whom said information, document,
material or object obtained pursuant to said request, is to be produced;

(7) give all the particulars necessary for the issuance by the court in the
requested State of the writs, orders or processes needed by the requesting State;
and

(8) contain such other information as may assist in the execution of the
request.

WHAT IS THE POLICY CONCERNING AUTHENTICATION OF DOCUMENTS

UNDER THIS ACT ?

a document is authenticated if the same is signed or certified by a judge,

magistrate or equivalent officer in or of, the requesting State, and authenticated by
the oath or affirmation of a witness or sealed with an official or public seal of a
minister, secretary of State, or officer in or of, the government of the requesting
State, or of the person administering the government or a department of the
requesting territory, protectorate or colony. The certificate of authentication may
also be made by a secretary of the embassy or legation, consul general, consul, vice
consul, consular agent or any officer in the foreign service of the Philippines stationed
in the foreign State in which the record is kept, and authenticated by the seal of his
office.

WHAT ARE THE PENALTIES FOR THE CRIME OF MONEY LAUNDERING?

The penalty of imprisonment ranging from seven (7) to fourteen (14) years
and a fine of not less than Three Million Philippine pesos (PhP3,000,000.00) but not
more than twice the value of the monetary instrument or property involved in the
offense, shall be imposed upon a person convicted under Section 4(a) of this Act.

The penalty of imprisonment from four (4) to seven (7) years and a fine of not
less than One million five hundred thousand Philippine pesos (PhP1,500,000.00) but
not more than Three million Philippine pesos (PhP3,000,000.00), shall be imposed
upon a person convicted under Section 4(b) of this Act.

The penalty of imprisonment from six (6) months to four (4) years or a fine of
not less than One hundred thousand Philippine pesos (PhP100,000.00) but not more
than Five hundred thousand Philippine pesos (PhP500,000.00), or both, shall be
imposed on a person convicted under Section 4(c) of this Act.

(b) Penalties for Failure to Keep Records. - The penalty of imprisonment

from six (6) months to one (1) year or a fine of not less than One hundred thousand
Philippine pesos (PhP100,000.00) but not more than Five hundred thousand
Philippine pesos (PhP500,000.00), or both, shall be imposed on a person convicted
under Section 9(b) of this Act.

(c) Malicious Reporting. - Any person who, with malice, or in bad faith,
reports or files a completely unwarranted or false information relative to money
laundering transaction against any person shall be subject to a penalty of six (6)
months to four (4) years imprisonment and a fine of not less than One hundred
thousand Philippine pesos (PhP100,000.00) but not more than Five hundred thousand
Philippine pesos (PhP500,000.00), at the discretion of the court: Provided, That the
offender is not entitled to avail the benefits of the Probation Law.

If the offender is a corporation, association, partnership or any juridical

person, the penalty shall be imposed upon the responsible officers, as the case may
be, who participated in the commission of the crime or who shall have knowingly
permitted or failed to prevent its commission. If the offender is a juridical person, the
court may suspend or revoke its license. If the offender is an alien, he shall, in
addition to the penalties herein prescribed, be deported without further proceedings
after serving the penalties herein prescribed. If the offender is a public official or
employee, he shall, in addition to the penalties prescribed herein, suffer perpetual or
temporary absolute disqualification from office, as the case may be.

Any public official or employee who is called upon to testify and refuses to do
the same or purposely fails to testify shall suffer the same penalties prescribed
herein.

(d) Breach of Confidentiality. - The punishment of imprisonment ranging

from three (3) to eight (8) years and a fine of not less than Five hundred thousand
Philippine pesos (PhP500,000.00) but not more than One million Philippine pesos
(PhP1,000,000.00), shall be imposed on a person convicted for a violation under
Section 9(c).

WHO ARE ENTITLED TO REWARDS?

A system of special incentives and rewards is hereby established to be given

to the appropriate government agency and its personnel that led and initiated an
investigation, prosecution and conviction of persons involved in the offense penalized
in Section 4 of this Act.

CAN THE AMLC FREEZE THE ASSETS OF CANDIDATE FOR ELECTORAL

OFFICE DURING ELECTION PERIOD?

This Act shall not be used for political persecution or harassment or as an

instrument to hamper competition in trade and commerce.

No case for money laundering may be filed against and no assets shall be
frozen, attached or forfeited to the prejudice of a candidate for an electoral office
during an election period.
MAY THIS LAW BE APPLIED RETROACTIVELY?

The provisions of this Act shall not apply to deposits and investments made
prior to its effectivity.