Anti-Money Laundering Law Notes
Anti-Money Laundering Law Notes
1. Perpetual term
2. One-person corporation
3. No minimum capital stock
4. Participation via remote communications, in absentia
5. Emergency board
6. Electronic filing and monitoring system
The AMLA declares it a 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 and
conduit for the proceeds of any unlawful activity.
The Anti-Money Laundering Act is meant to stop not only the practice of money laundering in all its
stages but more importantly the crimes that generated the proceeds that are being laundered.
1. Placement stage – the proceeds of the crime, often cash, are deposited in a financial institution
2. Layering stage – the proceeds are moved, usually through a series of transactions, which may
involve different entities, different assets and different jurisdictions, so as to sever any audit trail
to make the tracing of the source harder.
3. Integration stage – the criminal resumes control of the proceeds, free from any link to the
criminal source.
The Anti-Money laundering laws are designed to facilitate early detection, especially at the “Placement
stage”
Money Laundering is committed by any person who, knowing that any monetary instrument or property
represents, involves, or relates to the proceeds of any unlawful activity:
Excluded persons – lawyers and accountants acting as independent legal professionals in relation to
information concerning their clients or where disclosure of information would compromise client
confidences or the attorney-client relationship.
Covered Persons
1. Persons supervised or regulated by BSP, such as: (banks, non-banks, quasi-banks, trust entities,
pawnshops, etc.);
2. Persons supervised or regulated by the Insurance Code;
3. Persons supervised or regulated by SEC
4. Designated Non-Financial Businesses and Professions (DNFBPs) – (jewelry dealers, dealers in
precious metals, and dealers in precious stones)
a.
b.
c. Persons, including lawyers and accountants, who provide any of the following services:
i. Managing of client money, securities or other assets;
ii. Management of bank, securities or other assets;
iii. Organization of contributions for the creation, operation or management of
companies; and
iv. Creation, operation or management of juridical persons or arrangements, and
buying and selling business entities.
Jurisdiction
Regional Trial Court – shall have jurisdiction to try money laundering cases committed by private
individuals, and public officers not covered by the jurisdiction of the Sandiganbayan.
Sandiganbayan – shall have jurisdiction to try money laundering cases committed by public officers
under its jurisdiction, and private persons who are in conspiracy with such public officers.
Suspicious transactions – are transactions with covered institutions, REGARDLESS of the amounts
involved, where any of the following circumstances exist:
Unlawful Activity – refers to any act or omission or series or combination thereof involving or having
direct relation to the following:
Customer Identification – covered institution shall maintain a system of verifying the true identity of
their clients; ANONYMOUS ACCOUNTS, ACCOUNTS UNDER FICTITIOUS NAMES, and all other similar
accounts shall be ABSOLUTELY PROHIBITED.
Record Keeping – all records of all transactions of covered transactions shall be maintained and safely
stored for 5 years from the dates of transactions.
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.
Lawyers and accountants acting as independent legal professionals are not required to report covered
and suspicious transactions if the relevant information was obtained in circumstances where they are
subject to professional secrecy or legal professional privilege.
Customer Due Diligence – covered persons are required to establish and record the true identity of their
clients based on official documents.
In case of CORPORATE CLIENTS, covered persons are required to maintain 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.
SPECIAL CUSTOMERS AND ACTIVITIES
AMLC likewise adopted special rules that provide for preventive measures for specific customers and
activities such as:
Correspondent banking refers to the provision of banking services by one bank (the
correspondent bank) to another bank (the respondent bank) whose relationship can be
domestic or foreign.
The term correspondent bank refers to a financial institution that provides services to another
one—usually in another country. It acts as an intermediary or agent, facilitating wire transfers,
conducting business transactions, accepting deposits, and gathering documents on behalf of
another bank.
Report of Suspicious Transactions – the period within which to submit a report for suspicious
transactions is from the “occurrence thereof.”
“Occurrence” – refers to the “date of determination of the suspicious nature of the transaction, which
determination should not be made not exceeding ten (10) calendar days from the date of transaction.
However, if the transaction is in any way related to, or the person transacting is involved in or connected
to, an unlawful activity or money laundering offense, the ten (10)-day period for determination shall be
reckoned from the date the covered person knew or should have known the suspicious transaction
indicator.
Money laundering happens when the cash proceeds of an “unlawful activity” are transacted or
attempted to be transacted to make them appear to have come from legitimate sources.
More simply, the “dirty cash” derived from certain “predicate crimes” are made to appear to be “clean
money,” thereby concealing their true nature as the proceeds of the said “predicate crimes.” Once
deposited in banks, the laundered money could be used to pay for land, buildings, shares of stock, or
worse, to fund illegal drug dealings or terrorist activities.
Example: Kidnapping is a crime under our Penal Code. Depositing in a bank the ransom or cash received
by the kidnappers is another crime under the AMLA. Kidnapping is the predicate crime, and laundering
the ransom by depositing it in a bank is another crime punishable under AMLA.
The kidnappers are prosecuted and penalized separately from the money launderers. Moreover,
additional malefactors could be prosecuted for money laundering only, like the bank officials who may
not have participated in the kidnapping but who knew, or could have known, that the funds deposited
were the ransom.
Not all laundering is illegal. It is illegal only when the proceeds come from the predicate crimes
identified in the AMLA. These are: kidnapping for ransom, drug trafficking and related offenses, graft
and corruption, plunder, bribery, malversation, carnapping, robbery and extortion, jueteng and masiao,
piracy, qualified theft, swindling, smuggling, violations of the Electronic Commerce Act of 2000,
hijacking, destructive arson, violations of the Securities Regulation Code, terrorism as defined under RA
9372, terrorism financing plus other crimes defined under the Terrorism Financing Act of 2012, and
other crimes under special laws.
Is depositing funds derived from tax evasion money laundering? No, because tax evasion is not among
the “unlawful activities” or predicate crimes under the AMLA. Of course, tax evasion can be prosecuted
as a separate offense under other laws.
ANTI-MONEY LAUNDERING COUNCIL (AMLC) – primary concern is the prevention of money laundering.
Examination by AMLC
Authority to Inquire into Bank Deposits – the AMLC may inquire into or examine any particular deposit
or investment, including related accounts with any banking institution or non-bank financial institution
upon order of ANY COMPETENT COURT based on an EX PARTE APPLICATION in cases of violations of
this Act, when it has been established that there is a PROBABLE CAUSE that the deposits or investments,
including related accounts involved, are related to an unlawful activity.
The Court of Appeals shall act on the application to inquire into or examine any deposit or investment
with any banking institution or non-bank financial institution within twenty-four (24) hours from filing of
the application.
A court order EX PARTE must first be obtained before the AMLC can inquire into these related accounts:
provided, that the procedure for the ex parte application of the ex parte court order for the principal
account shall be the same with that of the related accounts.
When there is conviction for money laundering, 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 an unlawful activity.
Claim on Forfeited Assets – the offender or any other person claiming 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.
Criminal Case not necessary – a finding of guilt for an unlawful activity is not an essential element of civil
forfeiture. Thus, regardless of the absence, pendency or outcome of a criminal prosecution for the
unlawful activity or for money laundering, an action for civil forfeiture may be separately and
independently prosecuted and resolved.
Prohibitions against political harassment – “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.”
Sequestration – the deposits are seized, sequestered, and frozen in order to prevent their use, transfer,
or conveyance for purposes that are inimical to the safety and security of the people or injurious to the
interest of the State. Under the New Civil Code, sequestration or judicial deposit takes place when an
attachment or seizure of property in litigation is ordered.