ANTI-MONEY LAUNDERING ACT Primer

(RA 9160, Sept. 29, 2001)

I. PURPOSE (Sec. 2)

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

II. DEFINITIONS (Sec. 3)

COVERED INSTITUTIONS:

1. Banks, non-banks, quasi-banks, trust entities, and all other institutions and their subsidiaries and affiliates supervised or regulated by the BSP
2. Insurance companies and all other institutions supervised or regulated by the Insurance Commission; and
3. (i) securities dealers, brokers, salesmen, investment houses and other similar entities managing securities or rendering services as investment agent, advisor, or consultant, (ii) mutual funds, close and investment companies, common trust funds, pre-need companies 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 or regulated by Securities and Exchange Commission

COVERED TRANSACTIONS – a single, series, or combination of transactions involving a total amount in excess of 500,000 pesos or an equivalent amount in foreign currency based on the prevailing exchange rate within 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

A single, series or combination or pattern of unusually large and complex transactions in excess of 500,000 pesos especially cash deposits and investments having no credible purpose or origin, underlying trade obligation or contract

TRANSACTION – any act establishing any right or obligation or giving rise to any contractual or legal relationship between the parties thereto; includes any movement of funds by any means with a covered institution

UNLAWFUL ACTIVITY:

1. Kidnapping for ransom
2. Secs. 3, 4, 5, 6, 7 and 9, Art. II of the Dangerous Drugs Act
3. Sec. 3, pars. B, C, E, G, H, and I of Anti-Graft and Corrupt Practices Act
4. Plunder
5. Robbery and extortion
6. Jueteng and Masiao as illegal gambling
7. Piracy on the high seas
8. Qualified theft
9. Swindling
10. Smuggling
11. Violations of the Electronic Commerce Act of 2000
12. Hijacking and other violations under RA 6235, destructive arson and murder, including those perpetrated by terrorists against non-combatant persons and similar targets
13. Fraudulent practices and other violations of 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. ACTS PUNISHED

A. MONEY LAUNDERING (Sec. 4)
A crime whereby the proceeds of an unlawful activity are transacted, thereby making them appear to have originated from legitimate sources, by:

1. 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
2. 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
3. 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

B. FAILURE TO KEEP RECORDS (Sec. 9(b))

C. MALICIOUS REPORTING (Sec. 14(c))

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; probation not allowed

Any public official or employee who is called upon to testify and refuses to do the same or purposely fails to testify

D. BREACH OF CONFIDENTIALITY (Sec. 14(d))

IV. JURISDICTION (Sec. 5)

RTC – ordinary persons

Sandiganbayan – offenders who are public officers

V. PREVENTION OF MONEY LAUNDERING (Sec. 9)

Covered institutions are required to:

A. CUSTOMER IDENTIFICATION

Establish and record the true identity of its clients based on official documents

B. RECORD KEEPING

Maintain and safely store all records of all transactions for 5 years from the date 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 5 years from the dates when they were closed

C. REPORTING OF COVERED TRANSACTIONS

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

VI. AUTHORITY TO FREEZE (Sec. 10)

A. FREEZE ORDER:

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

B. NOTICE TO DEPOSITOR:

Depositor shall be notified simultaneously with the issuance of freeze order and he has 72 hours upon receipt of notice to explain why the freeze order should be lifted

C. AMLC has 72 hours to dispose of the depositor’s explanation (automatically dissolve the freeze order)

D. TRO or writ of injunction not allowed to issue against any freeze order, EXCEPT CA or SC

VII. AUTHORITY TO INQUIRE INTO BANK DEPOSITS (Sec. 11)

Exception to Secrecy of Bank Deposits Act (RA 1405), RA 6426 and RA 8791 and other laws

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

VIII. FORFEITURE (Sec. 12)

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

The offender or any other person claiming an interest in forfeited monetary instrument or property 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 (within 15 days from date of order of forfeiture)

C. PAYMENT IN LIEU OF FORFEITURE

Instead of enforcing the forfeiture order, the court may order the convicted offender to pay an amount equal to the value of said monetary instrument or property, if:

1. Any particular monetary instrument or property cannot, with due diligence, be located
2. 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
3. It has been concealed, removed, converted or otherwise transferred to prevent the same from being found or to avoid forfeiture thereof
4. It is located outside the Philippines or has been placed or brought outside the jurisdiction of the court
5. 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

IX. PROHIBITIONS AGAINST POLITICAL HARASSMENT (Sec. 16)

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 office