REPUBLIC ACT NO.

9160

AN ACT DEFINING THE CRIME OF MONEY

LAUNDERING, PROVIDING PENALTIES
THEREFOR AND FOR OTHER PURPOSES

I. FULL TEXT OF R.A. 9160

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.