RA NO.

9160 “Anti-Money Laundering Act of 2001”

PURPOSE
1. Protect and preserve the integrity and confidentiality of bank accounts
2. Ensure that Philippines shall not be used as money laundering site
3. Philippines shall extend cooperation in transnational investigations and prosecutions of persons
involved in money laundering.
4. To protect life, liberty and property from acts of terrorism and to condemn terrorism and those who
support and finance it; and to recognize it as inimical and dangerous to national security and the
welfare of the people; and to make the financing of terrorism a crime against the Filipino people,
against humanity and against the law of nations.
5. To recognize and to adhere to international commitments to combat the financing of terrorism,
specifically to the International Convention for the Suppression of the Financing of Terrorism, as
well as other binding terrorism related resolutions of the United Nations Security Council, pursuant
to Chapter 7 of the United Nations Charter.
6. To reinforce the fight against terrorism by preventing and suppressing the commission of said
offenses through freezing and forfeiture of property or funds while protecting human rights.

PRINCIPLES
1. The AMLC, as the country’s financial intelligence unit, is vested by law with independence to
perform its mandate. It upholds the continuous development of a team of highly ethical and
professional personnel and implements efficient processes in the delivery of its mandate.
2. The AML/CTF laws, rules and regulations and other relevant issuances are implemented using a
risk-based approach in a way that responds to the need to bring the financially excluded into the
regulated financial sector, while at the same time maintaining effective safeguards and effective
controls against money laundering/terrorism financing risks.
3. A strong compliance culture, good governance and observance of high ethical standards in the
conduct of business are good foundations for an effective AML/CTF regime. It will be developed and
sustained through capacity building and deterrence of violations through imposition of appropriate,
proportionate and dissuasive sanctions.
4. A sound risk management system to identify, assess, mitigate, monitor, and control risks associated
with money laundering/terrorism financing is essential.
5. Timely and effective domestic and international cooperation and established coordination
mechanism are critical in the investigation and prosecution of money laundering/terrorism financing
and associated unlawful activities.
6. The implementation of AML laws, rules and regulations shall conform to international AML/CTF
standards and best practices.
7. The observance of the constitutional requirements on due process, and injunction against ex post
facto laws and bills of attainder.

DEFINITION OF TERMS
1. COVERED INSTITUTIONS
 Supervised or regulated by Bangko Sentral ng Pilipinas
I. Banks
II. Non-banks
III. Quasi-banks
IV. Trust entities
V. Pawnshops
VI. Non-stock savings and loan associations
VII. Electronic money issuers
VIII. All other persons and their subsidiaries and affiliates supervised or regulated by the
BSP

Revised Implementing Rules and Regulations-

IX. Foreign exchange dealers
X. Money changers
XI. Remittance and transfer companies
  Supervised or regulated by Insurance Commission
I. Insurance companies
II. Pre-need companies
III. Insurance agents
IV. Insurance brokers
V. Professional reinsurers
VI. Reinsurance brokers
VII. Holding companies
VIII. Holding company systems
IX. Mutual benefit associations
X. All other persons and their subsidiaries and affiliates supervised or regulated by the
IC

 Supervised or regulated by Securities and Exchange Commission

I. Securities dealers
II. Brokers
III. Salesmen
IV. Investment houses
V. Other persons managing securities or rendering services such as investment agents,
adviser and consultants
VI. Mutual funds or open-end companies
VII. Close-end companies

Designated Non-Financial Business and Professions


I. Jewelry dealers
II. Precious metals and stone dealer
III. Company service providers
- Acting as a formation agent of juridical persons
- Acting as director or corporate secretary
- Providing a registered office; business address or accommodation,
correspondence…
- Acting as nominee shareholder
IV. Persons, including lawyers and accountant
- Managing of client money, securities or other assets;
- Management of bank, savings, securities or other assets;
- Organization of contributions for the creation, operation or management of
companies;
- Creation, operation or management of juridical persons or arrangements, and
buying and selling business entities.
AMENDMENTS:
RA 10927
 Casinos, including internet and ship-based casinos, with respect to their casino cash
transactions related to they gaming operations.
RA 11521
 Real estate developers and brokers
 Offshore gaming operators, as well as their service providers, supervised, accredited or
regulated by the Philippine Amusement and Gaming Corporation or any government agency.

(NOTE: independent legal professionals are not covered person.)

PRIMARY DUTIES OF COVERED PERSONS

 Covered persons shall, comply with all the requirements under the AMLA and TFPSA, their
respective IRR, and other AMLC issuances. They shall have the duty to cooperate with the AMLC in
the, discharge of the latter’s mandate, and execution of its lawful orders and issuances, to protect
their businesses or professions from being used in ML/TF activities.
  The covered persons’ board of directors, partners or sole proprietors shall be ultimately responsible
for the covered persons’ compliance with the AMLA and TFPSA, their respective IRR, and other
AMLC issuances.

2. COVERED TRANSACTIONS
 In cash or other equivalent monetary instrument exceeding Php 500, 000 within one banking
day
 Exceeds Php 1, 000, 000 in cases of jewelry dealers, dealers in precious metals and stones.

AMENDMENTS:
RA 10927
 A single casino transaction involving an amount in excess of 5, 000, 000 or its equivalent in
any other currency..

RA 11521
 A single cash transaction involving an amount in excess of 7, 500, 000 or its equivalent in
any other currency
CTR or “Covered Transaction Report”- report of covered person to AMLC

3. SUPICIOUS TRANSACTIONS
 No underlying legal or trade obligation, purpose/economic justification
 the client is not properly identified;
 the amount involved is not commensurate with the business or financial capacity of the
client;
 taking into account all known circumstances, it may be perceived that the client's transaction
is structured in order to avoid being the subject of reporting requirements under the AMLA;
 any circumstance relating to the transaction which is observed to deviate from the profile of
the client and/or the client's past transactions with the covered person;
 the transaction is in any way related to an unlawful activity or any money laundering activity
or offense that is about to be committed, is being or has been committed; or
 any transaction that is similar, analogous or identical to any of the foregoing.
STR or “Suspicious Transaction Report”- report of covered person to AMLC

4. MONETARY INSTRUMENT
 Coins or currency of legal tender of the Philippines, or of any other country;
 Credit instruments, including bank deposits, financial interest, royalties, commissions and
other intangible property;
 Drafts, checks and notes;
 Stocks or shares, participation or interest in a corporation or in a commercial enterprise or
profitmaking venture and evidenced by a certificate, contract, instrument, whether written or
electronic in character, including those enumerated in Section 3 of the Securities Regulation
Code;
 A participation or interest in any non-stock, non-profit corporation;
 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;
 Contracts or policies of insurance, life or nonlife, contracts of suretyship, pre-need plans and
member certificates issued by mutual benefit association; and
 Other similar instruments where title thereto passes to another by endorsement, assignment
or delivery.

UNLAWFUL ACTIVITIES
1. Kidnap for Randsom
2. Comprehensive Dangerous Drugs Act of 2002
3. Anti-Graft and Corrupt Practices Act
 4. Plunder
5. "Robbery" and "Extortion"
6. "Jueteng" (Luzon) and "Masiao" (vis/mmin)
7. Piracy on the High Seas
8. "Qualified Theft"
9. "Swindling"
10. "Smuggling" "Tariff and Customs Code of the Philippines";
11. "Electronic Commerce Act of 2000";
12. "Hijacking" "Anti-Hijacking Law"; "Destructive Arson"; and "Murder", as defined under the Revised
Penal Code, as amended;
13. "Terrorism" and "Conspiracy to Commit Terrorism”
14. "Financing of Terrorism”
15. "Bribery" "Corruption of Public Officers
16. "Frauds and Illegal Exactions
17. "Malversation of Public Funds"
18. "Forgeries" and "Counterfeiting"
19. "Anti-Trafficking in Persons Act of 2003",
20. "Revised Forestry Code of the Philippines
21. "Philippine Fisheries Code of 1998";
22. Philippine Mining Act of 1995";
23. "Wildlife Resources Conservation and Protection Act";
24. National Caves and Cave Resources Management Protection Act";
25. Anti-Carnapping Act of 2002, as amended";
26. "Codifying the Laws on Illegal/Unlawful Possession, Manufacture, Dealing In, Acquisition or
Disposition of Firearms, Ammunition or Explosives"
27. "Anti-Fencing Law";
28. "Migrant Workers and Overseas Filipinos Act of 1995", as amended by Republic Act No. 10022;
29. Violation of Republic Act No. 8293, otherwise known as the "Intellectual Property Code of the
Philippines, as amended";
30. "Anti-Photo and Video Voyeurism Act of 2009";
31. "Anti-Child Pornography Act of 2009";
32. "Special Protection of Children Against Abuse, Exploitation and Discrimination";
33. "Securities Regulation Code of 2000";
34. Felonies or offenses of a nature similar to the aforementioned unlawful activities that are punishable
under the penal laws of other countries.

MONEY LAUNDERING, TERRORISM FINANCING AND ASSET FORFEITURE

MONEY LAUNDERING
A crime whereby the proceeds of an unlawful activity as herein defined as transacted, thereby
making them appear to have originated from legitimate sources
 It is committed by any person who, knowing that any monetary instrument or property represents,
involves, or relates to the proceeds of any unlawful activity:
I. Transacts said instrument or property
II. Converts, transfers, disposes of, moves, acquires, possesses or use it
III. Conceals or disguise the true nature, source, location, disposition, movement or
ownership of or rights
IV. Attempts or conspires to commit money laundering offenses
V. Aids, abets, assist in or councils the commission of the money laundering offenses
VI. Performs or fails to perform any act as a result of which he facilitates the offense

 Also committed by any covered persons who, knowing that a covered or suspicious transaction is
required to be reported to the Anti-Money Laundering Council (AMLC). [Sec 4]

Jurisdiction over Money Laundering Cases

1. The Regional Trial Courts shall have jurisdiction to try all cases on money laundering.
 2. The Sandiganbayan shall have jurisdiction over cases those committed by public officers
and private persons who are in conspiracy with such public officers. [Sec 5]

TERRORISM FINANCING “Terrorism Financing Prevention and Suppression Act of 2012”

The provisions of the TFPSA and its IRR shall govern matters relating to TF, including the
implementation of the relevant targeted financial sanctions.

ASSET FORFEITURE

 General Rules on Asset Forfeiture

I. No prior criminal charge, pendency of a case, or conviction for an unlawful activity or ML
offense is necessary for the commencement or the resolution of a petition for civil forfeiture.
II. No asset shall be attached or forfeited to the prejudice of a candidate for an electoral office
during an election period.

 Asset Forfeiture in ML Cases.

Where there is conviction for ML, 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 or related to an unlawful activity.

 Claim on Forfeited Assets.

I. Where the court has issued an order of forfeiture of the monetary instrument or property in a
criminal prosecution for any ML offense, 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.

II. The verified petition shall be filed with the court which rendered the judgment of forfeiture,
within fifteen (15) days from the date of the finality of the order of forfeiture, in default of
which the said order shall become executory.

III. This provision shall also apply in civil forfeiture.

 Payment in Lieu of Forfeiture.

I. Where the court has issued an order of forfeiture of the monetary instrument or property
subject of an ML offense, and said order cannot be enforced because:
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; or
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,

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.
II. This provision shall apply in both civil and criminal forfeiture.

FORFEITURE PROVISIONS
 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.
 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.
 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.

PREVENTIVE MEASURES

 PROHIBITED ACCOUNTS
I. Anonymous Accounts and Accounts under Fictitious Names.
1) Covered persons shall maintain customers’ account only in the true and full name of
the account owner or holder.
2) Anonymous accounts, accounts under fictitious names, and all other similar accounts
shall be absolutely prohibited.
II. Numbered Accounts.
1) Numbered accounts, except non-checking numbered accounts, shall not be allowed.
2) CTRs and STRs involving non-checking numbered accounts shall contain the true
name of the account holder.

 CUSTOMER DUE DILIGENCE

“Customer Due Diligence” (CDD) refers to the procedure of identifying and verifying the true identity,
of customers, and their agents and beneficial owners, including understanding and monitoring of
their transactions and activities.

I. Purpose of CDD.
1) Covered persons shall conduct CDD for the following purposes:
2) To identify the customer, and its agents and beneficial owners;
3) To determine the risk posed by each customer;
4) To establish, maintain, close or terminate the account or business relationship; and
5) To assess the level of monitoring to be applied.

II. Covered persons shall conduct the appropriate CDD measures, which include the following
procedures:
1) Customer Identification Process;
 2) Customer Verification Process;
3) Identification and Verification of Agents;
4) Beneficial Ownership Verification;
5) Determination of the Purpose of Relationship; and
6) Ongoing Monitoring Process;

PREVENTIVE MEASURES AND OBLIGATIONS OF COVERED PERSONS

I. 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 same, and in case of corporate clients,
require a system of verifying their legal existence and organizational structure, as well as authority
and identification of all persons purporting to act on their behalf.

Minimum Information/Documents required for 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.

Minimum Information/Documents Required for Corporate and Juridical Entities.

(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.

II. 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.

III. Reporting of Covered and Suspicious Transactions

Covered persons shall report to the AMLC all covered transactions and suspicious
transactions within five (5) working days from occurrence thereof, unless the AMLC prescribes a
different period not exceeding fifteen (15) working days. Independent lawyers and accountants are
not required to report if they are subject to professional secrecy or legal professional privilege.

When reporting covered or suspicious transactions, it is prohibited to communicate it through

mass media. Any of the report’s contents should not be made into public knowledge.
BENEFICIAL OWNERSHIP

Covered persons are required to obtain minimum information from the customer, including the
beneficial owner(s) and legal arrangements as provided by law. The guidelines provide a list of such
minimum information and documents from customers.

To verify the identity of beneficial owner(s), covered persons shall use reliable and independent
documentation and data such as, but not limited to, original government-issued photographic identification
documents. Such verification must be made at the time the customer fills out any customer identification
form. If verification is not possible under special circumstances, it should be made as soon as reasonably
practicable as to ensure that AML/CFT risks are effectively managed in accordance with the MLTFPP and
not to interrupt the normal conduct of business.

Furthermore, covered persons are required to regularly update beneficial owner information
throughout the life of relationships with their customers.

Beneficial Owner refers to any natural person who:

 Ultimately owns or controls the customer and/or on whose behalf a transaction or activity is being
conducted;
 Has ultimate effective control over a juridical person or legal arrangement; or
 Owns, at least, twenty percent (20%) shares, contributions or equity interest in a juridical person or
legal arrangement.
 Control includes whether the control is exerted by means of trusts, agreements, arrangements,
understandings, or practices, and whether or not the individual can exercise control through making
decisions about financial and operating policies.

RECORD-KEEPING
 Record-Keeping.
Covered persons shall maintain and safely store for five (5) years from the dates of
transactions all customer records and transaction documents.

 Closed Accounts and Terminated Relationships.

Covered persons shall keep all records obtained through CDD, account files and business
correspondence, and the results of any analysis undertaken, for, at least, five (5) years following the
closure of account, termination of the business or professional relationship or after the date of the
occasional transaction.

 Retention of Records Where there is a Case.

If a case has been filed in court involving the account, records must be retained and safely
kept beyond the five (5)-year period, until it is officially confirmed by the AMLC Secretariat that the
case has been resolved, decided or terminated with finality.

 Form of Records.
Complimented by the requirements under the 2018 Guidelines on Digitization of Customer
Records, covered persons shall retain all transaction records either in:
1) their original forms; or
2) such other forms sufficient to permit reconstruction of individual transactions so as to
provide admissible evidence in court.

Covered persons shall keep the electronic copies of all CTRs and STRs for, at least, five (5) years
from the dates of submission to the AMLC.

For low risk customers, covered persons shall maintain and store, in whatever form, a record of
information data and transactions, sufficient to permit reconstruction of individual transactions so as to
provide, if necessary, evidence for prosecution of criminal activity.

 Availability of Records
 Covered persons shall ensure that all CDD information and transaction records are available
swiftly to domestic competent authorities in the exercise of their official functions or upon order by a
competent authority. Page 72 of 93
Covered persons shall take measures to ensure that customer records are submitted in the
manner, quality and period as would assist the AMLC in its prompt financial investigations and
institution of legal actions. For this purpose, covered persons shall implement the guidelines on the
digitization of customer records issued by the AMLC.

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.

ADDITIONAL:

ANTI-MONEY LAUNDERING COUNCIL

The Anti-Money Laundering Council shall be composed of the Governor of the Bangko Sentral ng
Pilipinas (BSP) as chairman, the Commissioner of the Insurance Commission and the Chairman of the
Securities and Exchange Commission (SEC) as members. [Sec. 7]

OBLIGATIONS OF COVERED PERSONS

 Customer Risk Assessment
CDD must be conducted using the risk-based approach. This means that
covered persons should assess the anti-money laundering and counter-terrorism
financing (“AML/CFT”) risks posed not only by the legal owners but also by the
beneficial owners, depending on the type of customer. Such risk-based approach will
allow the covered person some flexibility in its obligation to verify the identity of the
beneficial owner(s) of the customer on a case-to-case basis. In other words, if such
customer poses a high risk for money laundering or terrorism financing activities,
validation of information must be performed by the covered person. Nevertheless,
identification of beneficial ownership of a customer is required, regardless of the level
of risk associated with that customer.
The process of assessing customer risk and deciding how to identify and verify
beneficial ownership should be set out in the covered person’s Money Laundering and
Terrorism Financing Prevention Program (“MLTFPP”). In general, covered persons
must require minimum information on beneficial ownership for low and normal-risk
customers, including reliable and independent documentation and data. For high-risk
customers, covered persons should require additional information on beneficial
ownership and legal arrangements as may be necessary for an enhanced due diligence
procedure.

 Determination of identity of the beneficial owners of corporate vehicles and existence

of legal arrangements
Covered persons are required to adopt a written procedure that is reasonably
designed to identify and verify the beneficial owners of the customer and the existence
of legal arrangements entered into between the customer and said beneficial owners.
In determining the identity of beneficial owners, covered persons should establish the
customer’s ownership structure and understand the ownership at each layer. Specific
examples are contained in the annexes to the guidelines to assist covered persons in
determining ownership, especially for complex ownership layers.

 Obtaining beneficial ownership information

Covered persons are required to obtain minimum information from the customer,
including the beneficial owner(s) and legal arrangements as provided by law. The
guidelines provide a list of such minimum information and documents from customers.
 To verify the identity of beneficial owner(s), covered persons shall use reliable
and independent documentation and data such as, but not limited to, original
government-issued photographic identification documents. Such verification must be
made at the time the customer fills out any customer identification form. If verification
is not possible under special circumstances, it should be made as soon as reasonably
practicable as to ensure that AML/CFT risks are effectively managed in accordance
with the MLTFPP and not to interrupt the normal conduct of business.
Furthermore, covered persons are required to regularly update beneficial owner
information throughout the life of relationships with their customers.

 Record keeping
Covered persons are also required to keep records of the beneficial owner and
identification processes undertaken, consistent with the requirements under the AMLA
and its implementing rules issued by the AMLC. Such records should be kept in a
readily auditable manner, whereby covered persons shall provide the AMLC with
accurate and current information of a customer, immediately upon request in the
conduct of a money laundering investigation.
The information and records should be maintained for at least five years after
the date on which the customer ceases to be a customer of the covered person.
 Updating of MLTFPP
Within six months from effectivity of these guidelines, covered persons shall
update their MLTFPP to comply with the duties set forth in the guidelines and
implement the same immediately upon the approval of their board or equivalent
governing body.

Transition Period
As for existing customers, covered persons shall identify and record their beneficial
ownership information within one year from the effectivity of the guidelines.