BANKING

PART V

AMLA, AS AMENDED
and the
2016 RIRR of RA 9160, as amended
 GUIDE QUESTIONS

1. Give an example of how a person who was not involved in an unlawful

activity may be prosecuted for money laundering?
2. Why is the issuance of an ex parte bank inquiry order not a violation of due
process nor a general warrant?
3. Does the attorney client privilege protect a lawyer from being charged with
facilitating money laundering by a client?
4. What are the various ways by which a bank officer or employee may commit
money laundering?
5. What was the unlawful activity and the circumstances found in the case of
PDIC v Gidwani that warranted the filing of a charge of money laundering?
POLICY OF THE LAW
 POLICY OF THE AMLA

1. Protect and preserve the integrity and confidentiality of bank accounts

2. Ensure that the Philippines shall not be used as a money laundering site
for the proceeds of any unlawful activity

3. Consistent with foreign policy, the State shall extend cooperation to

transnational investigations and prosecutions of persons involved in
money laundering activities whenever committed.
COVERED PERSONS
AND
THEIR OBLIGATIONS
 WHO ARE COVERED PERSONS?

Natural or juridical persons that are:

• Banks, non-banks, quasi banks, trust entities, fx dealers, pawnshops, money
changers, remittance and transfer companies and other similar entities and
others under BSP regulation
• Insurance companies, pre-need companies and others under IC regulation
• Securities dealers, brokers, salesmen, investment houses and others managing
securities or rendering services as investment agent, advisor or consultant;
mutual funds, close-end investment companies, common trust funds, and other
similar persons, and other entities administering or otherwise dealing in
currency, commodities or financial derivatives based thereon, valuable objects,
cash substitutes or property under SEC regulation
 WHO ARE COVERED PERSONS?

(CON’T)
• Jewelry dealers in precious metals, who as a business trade in precious metals
in excess of p1 million
• Jewelry dealers in precious stones who as a business trade in precious stones
in excess of p1 million
• Company service providers which as a business provide services:
• Formation agent of juridical persons
• Acting as director or corporate secretary, partner in a partnership, or similar position
• Providing a registered office, business address or accommodation, correspondence or
administrative address for a company, partnership or legal person
• Acting as nominee shareholder for another person
 WHO ARE COVERED PERSONS* ?
Persons who provide any of the following services:
• Managing of client money, securities or other assets
• Management of bank, saving or securities accounts
• Organization of contributions for creation, operation or management of companies
• Creation, operation or management of juridical persons or arrangement and buying and
selling business entities
[Excluding lawyers and accountants ,authorized to practice in the Philippines, acting as independent
legal professionals in relation to information concerning their clients or where disclosure of information
would compromise client confidences or attorney-client relationship]

• Casinos, including internet and ship based casinos with respect to their casino
cash transactions related to their gaming operations

* Very recently, the AMLA was amended to include real estate brokers and
developers as covered persons.
 WHAT ARE THE OBLIGATIONS OF COVERED PERSONS?
CUSTOMER IDENTIFICATION
• Establish true identity of clients
• Based on official documents
• Maintain system of verifying true identity, legal existence, organizational
structure as well as authority and identification of persons acting on their behalf
RECORD KEEPING
• Maintained and stored for 5 years from transaction date
• Re closed accounts, id, account files and correspondence 5 years from date of
closure
REPORTING OF COVERED AND SUSPICIOUS TRANSACTIONS
• Within 5 working days from occurrence
• Unless AMLC prescribes different period not more than 15 working days
 WHAT ARE THE LIABILITIES OF COVERED PERSONS WHEN
REPORTING COVERED OR SUSPICIOUS TRANSACTIONS?

• Not liable under any of the bank secrecy laws e.g. RA 1405, as amended, RA
6426, as amended, and other similar laws
• Prohibited from communicating to any person fact that a CTR or STR was
made, contents or any other information in relation thereof otherwise
criminally liable
• No administrative, criminal or civil liability for submitting a CTR or STR in
regular performance of duties in good faith, whether or not the report resulted
in criminal prosecution (safe harbor provision)
• When reporting to AMLC, prohibited from communicating in any manner to
any person or media fact of reporting, contents or any other information;
publishing or airing in any form by mass media, email or similar devices
otherwise criminally liable
WHAT ARE THE LIABILITIES OF COVERED PERSONS WHEN
REPORTING COVERED OR SUSPICIOUS TRANSACTIONS?
• Covered persons, its directors, officers or personnel who knowingly participated
in the commission of the crime of money laundering are criminally liable

• They may also be imposed administrative sanctions in addition to criminal

charges for violating this Act, IRR or for failure or refusal to comply with AMLC
orders, resolutions and other issuances

• A bank, quasi bank, financial institution or any person commits a discriminatory

act (against certain customer types such as PEPs as well as their relatives, or
against a certain religion, race or ethnic origin, or other attributes or profiles
denying them access to services provided by the covered persons) shall be
subject to sanctions as may be deemed fit by their respective regulators.
 WHO ARE POLITICALLY EXPOSED PERSONS (PEPS)?
PEP refers to an individual who is or has been entrusted with prominent public
position in
(a) The Philippines with substantial authority over policy, operations or the use or
allocation of government-owned resources;
(b) A foreign state; or
(c) An international organization.
The term PEP shall include immediate family members, and close relationships
and associates that are reputedly known to have:
1. Joint beneficial ownership of a legal entity or legal arrangement with the
main/principal PEP; or
2. Sole beneficial ownership of a legal entity or legal arrangement that is
known to exist for the benefit of the main/principal PEP.
(See 2016 RIRR, Rule III, J)
 PREVENTIVE MEASURES FOR PEPS

Preventive Measures for Specific Customers and Activities

1. PEP – covered persons shall establish and record the true and full
identify of PEPs, as well as their immediate family members and
entities related to them.
a. In case of domestic PEPs or persons who have been entrusted with
a prominent function by an international organization, in addition to
performing the applicable due diligence measures under Rule 9,
covered persons shall:
i. Take reasonable measures to determine whether a customer or the
beneficial owner is a PEP and
ii. In cases when there is a higher risk business relationship, adopt measures
under pars. b.ii to b.vi below.
 PREVENTIVE MEASURES FOR PEPS

b. In relation to foreign PEP, in addition to performing the applicable

customer due diligence measures under Rule 9, covered persons shall
i. Put in place risk management systems to determine whether a customer or
the beneficial owner is a PEP
ii. Obtain senior management approval before establishing (or continuing for
existing customers) such business relationships
iii. Take reasonable measures to establish the source of wealth and the source
of funds of customers and beneficial owners identified as PEPs; and
iv. To conduct enhanced ongoing monitoring on that relationship.
(See 2016 RIRR Rule IX-A, Rule 9-A [1]
COVERED AND SUSPICIOUS
TRANSACTIONS
 WHAT ARE COVERED AND SUSPICIOUS TRANSACTIONS?
• COVERED TRANSACTIONS – in cash or other equivalent monetary instrument involving
a total amount in excess of P500,000 within one banking day; for covered persons
under Section3 (8) a single casino cash transaction involving an amount in excess of P5
million or its equivalent in any other currency

• SUSPICIOUS TRANSACTIONS – with covered institutions regardless of the amounts,

where any of the following circumstances exist:
• No underlying legal or trade obligation, purpose or economic justification
• Client is not properly identified
• Amount is not commensurate with business or financial capacity of the client
• Taking into account all known circumstances, it may be perceived that client’s transaction is
structured in order to avoid being reported
• Any circumstance retaing to the transaction which is observed to deviate from the profile of the
client and/or the client’s past transactions with the covered institution
• Transaction is related to an unlawful activity or offense that is about to be or is being or has been
committed
• Any transaction that is similar or analogous to any of the foregoing
 ANALOGOUS SUSPICIOUS TRANSACTIONS

• Using a corporation with fraudulent registration (fictitious incorporators,

forged signatures, principal place of business cannot be located, etc.)
• Using frequently a money remittance center to transfer funds of maximum
allowable amounts or staggered basis
• Withdrawing funds by way of a loan after an immediately preceding deposit
of substantially same amount.
• Maintaining several accounts through dummies with several broker dealers
authorized to engage in high frequency trading or wash sales and
transferring funds between and among those accounts with no apparent
business purpose
• Transferring funds from or to financial institutions in many different
countries
MONEY LAUNDERING: HOW
COMMITTED
 HOW IS MONEY LAUNDERING COMMITTED?
When any person knowing that any monetary instrument or property represents,
involves or relates to the proceeds of any unlawful activity:

• Transacts said monetary instrument or property;

• Converts, transfers, disposes of, moves, acquires, possesses or uses said

monetary instrument or property;

• Conceals or disguises the true nature, source, location, disposition, movement

of ownership of or rights with respect to said monetary instrument or property;
or

• Attempts or conspires to commit money laundering offenses referred to above.

 HOW IS MONEY LAUNDERING COMMITTED?
Money laundering may also be committed by a person who did not
participate in the unlawful activity but:

• Aids, abets, assists in or counsels the commission of the money laundering

offenses referred to the first three paragraphs of Sec 4 of AMLA (see
immediately preceding slide);

• Performs or fails to perform any act as a result of which he facilitates the

offense of money laundering referred to in said three paragraphs;

• Any covered persons knowing that a CTR or STR is required to be submitted

under this Act, fails to do so.
 MONEY LAUNDERING

In this case, the PDIC reportedly discovered that there was only one beneficial
owner of the 471 bank accounts in the names of 86 individual depositors —
the respondent. It was found out that 142 of these 471 accounts, with the
total amount of P20,966,439.09, were in the names of helpers and rank-and-
file employees of the respondent and his wife. These employees did not have
the financial capacity to deposit the amounts recorded under their names.
Moreover, these employees resided at, were employed in Bacolod City but
maintained bank accounts in Legacy Bank branches located in different parts
of the country. That these employees reported at respondent's office or
business address further aroused serious suspicion on the true ownership of
the funds deposited. It gives the impression that they had been used by
respondent as dummies, and their purported ownership a mere subterfuge, in
order to increase the amount of his protected deposit. (continued in next slide)
 MONEY LAUNDERING
Respondent claimes that he and the individual depositors had entered into a fund
management scheme to facilitate their transactions with Legacy Bank; he did not
deny opening and funding some of these accounts , and even admitted to
receiving advance interests on the subject bank accounts that were meant the
indiviudal depositors. This claim of a fund management scheme was found by the
Surpeme Court to be barren and self-serving, and that, in any event, such scheme
partakes the nature of an investment contract that ought to have been registered
first with the Securities and Exchange Commission before it can be given
effect. The Supreme Court held that whether or not there indeed existed an
agreement between respondent and the individual depositors is a matter best left
ventilated during trial proper, where evidence can be presented and appreciated
fully. Suffice it to state that the Court found probable cause to charge respondent
for estafa and money laundering.
 (Philippine Deposit Insurance Corp. v. Gidwani, G.R. No. 234616, [June 20, 2018])
 MONEY LAUNDERING

The Compliance and Investigation Staff of the AMLC conducted an intelligence

database search on the financial transactions of certain individuals involved in
the award of the NAIA 3 Project whose PBAC Technical Committee was chaired
by Pantaleon Alvarez. Alvarez later charged with violation of Sec 3 (j) of RA
3019. The search revealed he maintained 8 bank accounts with 6 different
banks. Moreover, it was found that amounts were transferred from a HK bank
account owned by Jetstream Pacific Ltd account to bank accounts in the
Philippines maintained by Liongson and Cheng Yong. The AMLC filed a petition
for bank inquiry into said accounts as well as those of three other persons
linked to the “financial trail of corruption”.

Republic v Eugenio Jr. GR 174629 Feb 14, 2008

 FACILITATION OF MONEY LAUNDERING
This case shows acts and omissions by an Acting Branch Manager of a bank that
could be the basis of a criminal complaint for facilitation of money laundering
(linked to an unlawful activity). A bank manager has the duty to ensure that bank
rules are strictly complied with, not only to ensure efficient bank operation, but also
to serve the bank's best interest. His responsibility over the functions of the
employees of the branch cannot simply be overlooked as their acts normally pass
through his supervision and approval. He should serve as the last safeguard against
any pretense employed to carry out an illicit claim over the bank's money.
First, the respondent allowed, even prodded, his employees to bypass bank
procedures that were in place to secure the bank's funds. Through the respondent's
assurances as to Bonsalagan's identity, Ramirez blindly opened a current account
despite the client's submission of incomplete identification requirements. The
respondent even approved and authenticated Bonsalagan's specimen signature
cards to facilitate the opening of Bonsalagan's current account. (continued in next
slide)
 FACILITATION OF MONEY LAUNDERING
Second, the respondent permitted the issuance of a check booklet to Bonsalagan without
waiting for the latter's check to pass through the three-day clearing requirement. We take
judicial notice of the required bank procedure of forwarding a check for clearance before
funds are allowed to be withdrawn from it. In this case, Bonsalagan was issued a check
booklet within the same day that he presented his check to the respondent and without
his check being forwarded to and cleared by the Philippine Clearing House Corporation.
Bonsalagan did not even pay for the issuance of his check booklet, as the respondent
generously paid the P150.00 fee out of his own pocket. 
We consider the respondent's act of tagging Bonsalagan's account as insufficient
safeguard to prevent unauthorized withdrawals of the check's funds as it would not really
have prevented Bonsalagan, who was already in possession of the check booklet, from
issuing and circulating in the market checks that would subsequently be dishonored for
being spurious and unfunded. Knowledge that Bonsalagan's account was tagged by the
respondent was only internal with the branch or, possibly within the LBP bank system, but
not with respect to third persons who would get hold of the checks issued by Bonsalagan.
(continued in next slide)
 FACILITATION OF MONEY LAUNDERING
Third, the respondent failed to exert prompt efforts in confirming the genuineness and
source of Bonsalagan's P26-Billion check.
Due to the nature of his Bank Manager position, it was inevitable for the respondent to
encounter and process, on a daily basis, checks of enormous amounts, ranging from
thousands to millions of pesos. However, we find the enormity of the amount of
Bonsalagan's check, i.e., P26 Billion, to be exceptional and far from the usual bank
transactions. This kind of unusual, even suspicious, transaction warranted a more guarded
and prompt response from the respondent.
We recall that it was through Ramirez's initiative, and not the respondent's, that the
unusually enormous check was immediately reported to the LBP Area Head Office.
Strangely, the respondent, with apparent insensitivity to the circumstances of the
situation, wanted to wait until the next working day to report the check. Such relaxed
response cannot but be a confirmation of his disregard of and lack of concern for the
bank's interests, which he was duty-bound to protect. 
(Land Bank of the Phils. v. San Juan, Jr., G.R. No. 186279, [April 2, 2013], 707 PHIL 365-381)
UNLAWFUL ACTIVITIES OR PREDICATE
CRIMES
 UNLAWFUL ACTIVITIES

• Kidnapping for ransom

• Sec 4 to 6, 8 to 16 of the Comprehensive Dangerous Drugs Act
• Sec 3 (B), ( C), (E ), (G), (H) and (I) of RA 3019 Anti-graft and
Corrupt Practices Act
• Plunder
• Robbery and extortion
• Jueteng and masiao
• Piracy on the high seas
• Qualified theft
 UNLAWFUL ACTIVITIES

• Swindling under Art 315 and other forms of swindling under Art 316 of the
RPC
• Smuggling under RA 455 and 1937
• Violations of RA 8792 or the Electronic Commerce Act
• Hijacking and other violations under RA 6235; destructive arson and murder
under the RPC
• Terrorism and conspiracy to commit terrorism under Sec 3 and 4 of RA 9372
• Financing of terrorism under Sec 4 and offenses under Sec 5 to 8 of RA 10168
the Terrorism Financing Prevention and Suppression Act of 2012
• Bribery under Art 210, 211 and 211-A of the RPC and corruption of public
officers under Art 212 of the RPC
 UNLAWFUL ACTIVITIES

• Frauds and illegal exactions and transactions under Art 213 to 216 of the
RPC
• Malversation of public funds and property under Art 217 and 222 of the
RPC
• Forgeries and counterfeiting under Art 163, 166 to 169 and 176 of the
RPC
• Violations of Sec 4 to 6 of RA 9208 Anti-Trafficking in Persons Act of 2003
• Violations of Sec 86 to 106 of Chapter VI of RA 8550 or Philippine
Fisheries Code of 1998
• Violations of Sec 101 to 107, and 110 of RA 7942 Philippine Mining Act of
1995
 UNLAWFUL ACTIVITIES
• Violations of Sec 27 (c ), (f), (g) and (i) of RA 9147 Wildlife Resources
Conservation and Protection Act
• Violation of Sec 7(b) of RA 9072 National Caves and Cave Resources
Management Protection Act
• Violation of RA 6539 Anti-Carnapping Act of 2002
• Violations of Sec 1, 3 and 5 of PD 1866 Codifying the Laws on Illegal
Possession, Manufacture, Dealing in, Acquisition or Disposition of
Firearms, Ammunition or Explosives
• Violation of PD 1612 Anti-Fencing Law
• Violation of Sec 6 of RA 8042 Migrant Workers and Overseas Filipinos
Act of 1995 as amended
 UNLAWFUL ACTIVITIES*
• Violation of RA 8293 Intellectual Property Code of the Philippines
• Violation of Sec 4 of RA 9995 Anti-Photo and Video Voyeurism Act of 2009
• Violation of Sec 4 of RA 9775 Anti-Child Pornography Act of 2009
• Violations of Sec 5, 7 to 10 Special Protection of Children against Abuse,
Exploitation, and Discrimination
• Fraudulent practices and other violations under RA 8799 or Securities
Regulation Code of 2000
• Felonies or offenses of a similar nature that are punishable under the penal
laws of other countries
* Recently two more unlawful activities were added one on terrorism and
another, tax evasion where the deficiency tax involved on an annual basis is
Php25M or higher.
AMLC: FUNCTIONS
 WHAT IS THE AMLC
• It is an inter-agency body composed of the
• BSP Governor,
• SEC Chairperson and
• Insurance Commissioner

• It acts unanimously in the discharge of its functions

• It is assisted by a secretariat headed by an Executive Director appointed by

the Council for a term of five years.

• All members of the secretariat must have served for at least 5 years in the IC,
SEC or BSP and shall old full-time permanent position within the BSP.
 WHAT ARE THE FUNCTIONS OF THE AMLC
• Require and receive covered or suspicious transaction reports from covered
institutions
• Issue orders addressed to appropriate Supervising Authority or the covered
institutions to determine the true identity of the owner of any monetary
instrument or property subject of a covered transaction or suspicious
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
• Institute civil forfeiture proceedings and all other remedial proceedings
through the OSG
• Cause the filing of complaints with the DOJ or Ombudsman for the
prosecution of money laundering offenses
 WHAT ARE THE FUNCTIONS OF THE AMLC
• Investigate suspicious transactions and covered transactions deemed suspicious
after an investigation by AMLC, money laundering activities and others violations of
this Act
• Apply before the CA ex parte for the freezing of any monetary instrument or
property alleged to be laundered, proceeds from, or instrumentalities used in or
intended for use in any unlawful activity as defined in Sec 3(i)
• Implement such measures as may be necessary and justified under this Act to
counteract money laundering
• 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
• Develop educational programs on the pernicious effects of money laundering, the
methods and techniques used in the money laundering, the viable means of
preventing money laundering and the effective ways of prosecuting and punishing
offenders
 WHAT ARE THE FUNCTIONS OF THE AMLC
• Enlist the assistance of any branch, department, bureau, office, agency or
instrumentality of the government including GOCCs in undertaking any and
all anti-money laundering operations which may include the use of its
personnel, facilities and resources for the more resolue prevention, detection
and investigation of money laundering offenses and prosecution of offenders
• Impose administrative sanctions for the vioatin of laws, rules, regulations,
and orders and resolution issued pursuant thereto
• Require the LRA and all it Registries of Deeds to submit to the AMLC reports
on all real estate transactions involving an amount in excess of Php500,000
within 15 days from the date of registration of the transaction in a form to be
prescribed by the Council. The Council may also require the LRA and all its
Registries of Deeds to submit copies of relevant documents of all real estate
transactions.
SAFE HARBOR PROVISIONS
 SAFE HARBOR PROVISIONS
When reporting covered or suspicious transactions to the AMLC, covered
institutions and their officers and employees shall not be deemed to have
violated RA 1405 as amended, RA 8791 and other similar laws but are
prohibited from communicating, directly or indirectly, in any manner or by an
y means, to any person, the fact that a covered or suspicious transaction
report was made. In case of violation, the concerned officer and employee
shall be criminally liable.
HOWEVER,
No administrative, criminal or civil proceedings shall lie against any person for
having made a CTR or STR in regular performance of duties in good faith,
whether or not the report resulted in any criminal prosecution under AMLA or
any other law.
AUTHORITY TO INQUIRE INTO BANK
DEPOSITS
 WHAT IS A BANK INQUIRY ORDER?
The AMLC may inquire into or examine any particular deposit or investment,
including related accounts, with any banking institution or non-bank financial
institution upon order of any competent courts based on an ex parte application in
cases of violations of this Act, when it has been established that said deposit or
investment including related accounts are related to an unlawful activity as
defined in Sec 3 (i) or a money laundering offense under Sec 4 hereof; except no
court order required in:
• Kidnapping for ransom under RPC Art 267
• Comprehensive Dangerous Drugs Act Sec 4, 5, 6, 8 to 16
• Anti-Graft and Corrupt Practices Act Sec 3 pars B, C, E, G, H and I
• Felonies or offenses of a nature similar that are punishable under penal laws of
other countries
• Terrorism and conspiracy to commit terrorism under RA 9372
 WHAT ARE THE SAFEGUARDS BEFORE
A BANK INQUIRY ORDER MAY BE ISSUED?
We clarify that the AMLC, in investigating probable money laundering activities, does not exercise quasi-
judicial powers, but merely acts as an investigatory body with the sole power of investigation similar to the
functions of the National Bureau of Investigation (NBI). Hence, the ex parte application for the bank inquiry
order cannot be said to violate any person's constitutional right to procedural due process. Also, the source of
the right to privacy respecting bank deposits is statutory, not constitutional; hence, the Congress may validly
carve out exceptions to the rule on the secrecy of bank deposits, as illustrated in Section 11 of RA 9160.
Furthermore, the AMLC's inquiry and examination into bank accounts are not undertaken whimsically based
on its investigative discretion. The AMLC and the CA are respectively required to ascertain the existence of
probable cause before any bank inquiry order is issued. Section 11 of RA 9160 even with the allowance of an
ex parte application therefor, cannot be categorized as authorizing the issuance of a general warrant. This is
because a search warrant or warrant of arrest contemplates a direct object but the bank inquiry order does
not involve the seizure of persons or property.
Lastly, the holder of a bank account subject of a bank inquiry order issued ex parte is not without recourse.
He has the opportunity to question the issuance of the bank inquiry order after a freeze order is issued
against the account. He can then assail not only the finding of probable cause for the issuance of the freeze
order, but also the finding of probable cause for the issuance of the bank inquiry order. (continued in next
slide)
 WHAT ARE THE SAFEGUARDS BEFORE
A BANK INQUIRY ORDER MAY BE ISSUED?
We thus subjected Section 11 of the AMLA to heightened scrutiny and found nothing arbitrary in the
allowance and authorization to AMLC to undertake an inquiry into certain bank accounts or deposits.
Instead, we found that it provides safeguards before a bank inquiry order is issued, ensuring adherence
to the general state policy of preserving the absolutely confidential nature of Philippine bank accounts: 
(1) The AMLC is required to establish probable cause as basis for its ex-parte application for bank
inquiry order;
(2) The CA, independent of the AMLC's demonstration of probable cause, itself makes a finding of
probable cause that the deposits or investments are related to an unlawful activity under Section 3 (i)
or a money laundering offense under Section 4 of the AMLA;
(3) A bank inquiry court order ex-parte for related accounts is preceded by a bank inquiry court
order ex-parte for the principal account which court order ex-parte for related accounts is separately
based on probable cause that such related account is materially linked to the principal account inquired
into; and
(4) The authority to inquire into or examine the main or principal account and the related accounts shall
comply with the requirements of Article III, Sections 2 and 3 of the Constitution.
[Estrada v SB GR 217682 Jul 17, 2018]
 WHAT ARE THE SAFEGUARDS BEFORE
A BANK INQUIRY ORDER MAY BE ISSUED?
The foregoing demonstrates that the inquiry and examination into the bank account are not
undertaken whimsically and solely based on the investigative discretion of the AMLC. In
particular, the requirement of demonstration by the AMLC, and determination by the CA, of
probable cause emphasizes the limits of such governmental action. We will revert to these
safeguards under Section 11 as we specifically discuss the CA's denial of SPCMB's letter request
for information concerning the purported issuance of a bank inquiry order involving its accounts.
• First. The AMLC and the appellate court are respectively required to demonstrate and ascertain
probable cause.  Ret Lt Gen Ligot et al v Republic which dealt with the adjunct provisional
remedy of freeze order under Section 10 of the AMLA, defined probable cause, thus: 
• The probable cause required for the issuance of a freeze order differs from the probable cause
required for the institution of a criminal action, . . . .
• As defined in the law, the probable cause required for the issuance of a freeze order refers to
"such facts and circumstances which would lead a reasonably discreet, prudent or cautious man
to believe that an unlawful activity and/or money laundering offence 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.” (continued in next slide)
 WHAT ARE THE SAFEGUARDS BEFORE
A BANK INQUIRY ORDER MAY BE ISSUED?
Second. As regards SPCMB's contention that the bank inquiry order is in the nature of a general
warrant, Eugenio already declared that Section 11, even with the allowance of an ex-
parte application therefor, "is not a search warrant or warrant of arrest as it contemplates a direct
object but not the seizure of persons or property." It bears repeating that the "bank inquiry order"
under Section 11 is a provisional remedy to aid the AMLC in the enforcement of the AMLA.
Third. Contrary to the stance of SPCMB, the bank inquiry order does not contemplate that SPCMB
be first impleaded in a money laundering case already filed before the courts: x x x
Guided as we are by prior holdings, and bound as we are by the requirements for issuance of a bank
inquiry order under Section 11 of the AMLA, we are hard pressed to declare that it violates SPCMB's
right to privacy. 
Nonetheless, although the bank inquiry order ex-parte passes constitutional muster, there is
nothing in Section 11 nor the implementing rules and regulations of the AMLA which prohibits the
owner of the bank account, as in this instance SPCMB, to ascertain from the CA, post issuance of the
bank inquiry order ex-parte, if his account is indeed the subject of an examination. Emphasized by
our discussion of the safeguards under Section 11 preceding the issuance of such an order, we find
that there is nothing therein which precludes the owner of the account from challenging the basis
for the issuance thereof. (continued in next slide)
 WHAT ARE THE SAFEGUARDS BEFORE
A BANK INQUIRY ORDER MAY BE ISSUED?

Xxx xxx xxx Note further that Rules 10.c.3 and 10.d of the IRR on Authority
to File Petitions for Freeze Order provides that:
Xxx
The foregoing rule, in relation to what Section 11 already provides, signifies
that ex-parte bank inquiry orders on related accounts may be questioned
alongside, albeit subsequent to, the issuance of the initial freeze order of
the subject bank accounts. The requirements and procedure for the
issuance of the order, including the return to be made thereon lay the
grounds for judicial review thereof. X x x
(Subido Pagente Certeza Mendoza and Binay Law Offices v. Court of Appeals,
G.R. No. 216914, [December 6, 2016], 802 PHIL 314-390)
 NO PROBABLE CAUSE TO ISSUE A BANK INQUIRY ORDER

To repeat, the application for the issuance of a bank inquiry order was supported by only two pieces of evidence: Senate Committee
Report No. 54 and the testimony of witness Thelma Espina.
We have had occasion to rule that reports of the Senate stand on the same level as other pieces of evidence submitted by the parties,
and that the facts and arguments presented therein should undergo the same level of judicial scrutiny and analysis.  As courts have the
discretion to accept or reject them,  no grave error can be ascribed to the RTC for rejecting and refusing to give probative value to Senate
Committee Report No. 54.
At any rate, Senate Committee Report No. 54 only provided the AMLC with a description of the alleged unlawful activity, which is the
fertilizer fund scam. It also named the alleged mastermind of the scam, who was respondent Bolante. The entire case of the AMLC,
however, hinged on the following excerpt of Senate Committee Report No. 54:
But Undersecretary Bolante's power over the agriculture department was widely known. And it encompasses more than what the
Administrative Code provided.
In fact, at the time that he was Undersecretary, Jocelyn Bolante was concurrently appointed by the President in other powerful
positions: as Acting Chairman of the National Irrigation Administration, as Acting Chairman of the Livelihood Corporation x x
x.  (Emphasis supplied)
It was this excerpt that led the AMLC to connect the fertilizer fund scam to the suspicious transaction reports earlier submitted to it by
PNB.
However, the RTC* found during trial that respondent Bolante had ceased to be a member of the board of trustees of LIVECOR for 14
months before the latter even made the initial transaction, which was the subject of the suspicious transaction reports. Furthermore,
the RTC took note that according to the Audit Report submitted by the Commission on Audit, no part of the P728 million fertilizer fund
was ever released to LIVECOR.
* N.B. It is now the Court of Appeals no longer the RTC that may issue a bank inquiry order.
(Republic v. Bolante, G.R. Nos. 186717 & 190357, [April 17, 2017], 808 PHIL 601-634)
FREEZE ORDERS
 WHAT IS A FREEZE ORDER?

“The primary objective of a freeze order is to temporarily preserve

monetary instruments or property that are in any way related to an
unlawful activity or money laundering, by preventing the owner from
utilizing them during the duration of the freeze order. The relief is pre-
emptive in character, meant to prevent the owner from disposing his
property and thwarting the State's effort in building its case and eventually
filing civil forfeiture proceedings and/or prosecuting the owner.”
[Ligot et al v Republic GR 176944 Mar 6, 2013}
 WHAT IS A FREEZE ORDER?
In fine, the only issue to be resolved in this case is whether the freeze order issued against
respondent's bank account should be further extended beyond the thirty (30)-day period granted by
the Court of Appeals and until the appropriate case has been filed against respondent.||| xxx
Congress further amended Section 10 of the Anti-Money Laundering Act of 2001 with Republic Act
NO. 10167 which was made into law on June 6, 2012. The amendment to Section 10 was laid out in
Section 1 of the said law in the following manner:

“SECTION 1. Section 10 of Republic Act No. 9160, as amended, is hereby amended to read as follows:"SEC.
10. Freezing of Monetary Instrument or Property. — Upon verified ex parte petition by the AMLC and after
determination that probable cause exists that any monetary instrument or property is in any way related to an
unlawful activity as defined in Section 3(i) hereof, the Court of Appeals may issue a freeze order, which shall be
effective immediately. The freeze order shall be for a period of twenty (20) days unless extended by the court.”

Recently, Republic Act No. 10365 , which was enacted on February 15, 2013, further amended
Section 10 of Republic Act No. 9160 by mandating that the Court of Appeals may issue a freeze
order the duration of which shall not exceed six months otherwise it would be considered lifted. No
error therefore for the CA to extend the freeze order to a definite period of 30 days.
[Republic v First Pacific Network Inc. GR 156646 Nov 19, 2014 Notice]
 WHAT IS A FREEZE ORDER?
Section 6 of RA 9160, as amended, provides:
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. (emphasis supplied)
Rule 6.1 of the Revised Implementing Rules and Regulations of RA 9160, as amended, states:
Rule 6.1. 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 Rule 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 application ex-parte by the AMLC to the Court of Appeals for a freeze order
with respect to the monetary instrument or property involved therein and resort to other
remedies provided under the AMLA, the Rules of Court and other pertinent laws and rules.
(emphasis supplied)
[REPUBLIC V GLASGOW CREDIT AND COLLECTION SERVICES 542 SCRA 95 (2008)]
FORFEITURE PROVISIONS
 WHEN IS A COMPLAINT FOR CIVIL FORFEITURE
SUFFICIENT IN FORM AND SUBSTANCE
Here, the verified complaint of the Republic contained the following allegations:
(a) the name and address of the primary defendant therein, Glasgow; 
(b) a description of the proceeds of Glasgow's unlawful activities with particularity, as well as the location
thereof, account no. CA-005-10-000121-5 in the amount of P21,301,430.28 maintained with CSBI;
(c) the acts prohibited by and the specific provisions of RA 9160, as amended, constituting the grounds for
the forfeiture of the said proceeds. In particular, suspicious transaction reports showed that Glasgow
engaged in unlawful activities of estafa and violation of the Securities Regulation Code (under Section 3 (i)
(9) and (13), RA 9160, as amended); the proceeds of the unlawful activities were transacted and
deposited with CSBI in account no. CA-005-10-000121-5 thereby making them appear to have originated
from legitimate sources; as such, Glasgow engaged in money laundering (under Section 4, RA 9160, as
amended); and the AMLC subjected the account to freeze order and T
(d) the reliefs prayed for, namely, the issuance of a TRO or writ of preliminary injunction and the forfeiture
of the account in favor of the government as well as other reliefs just and equitable under the premises.
The form and substance of the Republic's complaint substantially conformed with Section 4, Title II of
Rules of Procedure for Civil Cases for Civil Forfeiture
(Republic v GLASGOW , supra)
 WHAT IS A CIVIL FORFEITURE CASE?

Supreme Court Rules of Procedure in Cases of Civil Forfeiture

Sec. 4. Contents of the petition for civil forfeiture. — The petition for civil
forfeiture shall be verified and contain the following allegations:
(a) The name and address of the respondent;
(b) A description with reasonable particularity of the monetary instrument,
property, or proceeds, and their location; and
(c) The acts or omissions prohibited by and the specific provisions of the Anti-
Money Laundering Act, as amended, which are alleged to be the grounds relied
upon for the forfeiture of the monetary instrument, property, or proceeds; and
(d) The reliefs prayed for.
 IS CONVICTION FOR AN UNLAWFUL ACTIVITY OR
MONEY LAUNDERING OFFENSE A PREREQUISITE TO THE
FILING OF A CIVIL FORFEITURE CASE?
Section 27 of the Rule of Procedure in Cases of Civil Forfeiture provides: Sec. 27. No prior
charge, pendency or conviction necessary. — No prior criminal charge, pendency of or
conviction for an unlawful activity or money laundering offense is necessary for the
commencement or the resolution of a petition for civil forfeiture. (emphasis supplied)
Thus, regardless of the absence, pendency or outcome of a criminal prosecution for the
unlawful activity or for money laundering, an action for civil forfeiture may be separately
and independently prosecuted and resolved. xxx While there was admittedly a delay in the
proceeding, it could not be entirely or primarily ascribed to the Republic. That Glasgow's
whereabouts could not be ascertained was not only beyond the Republic's control, it was
also attributable to Glasgow which left its principal office address without informing the
Securities and Exchange Commission or any official regulatory body (like the Bureau of
Internal Revenue or the Department of Trade and Industry) of its new address.

Republic v Glasgow Credit and Collection Services 542 SCRA 95 (2008)

 MAY THE AGGRIEVED PARTIES TAKE PART
IN THE CIVIL FORFEITURE CASE FILED BY AMLC?
The Republic through the AMLC filed a complaint for civil forfeiture entitled Republic v RAB Realty Inc, et
al. Subsequently, it filed a second complaint also for civil forfeiture entitled Republic v Ariola Jr. et al.
Republic sought the forfeiture in its favor of certain deposits and government securities in several bank
accounts of defendants (Baladjay, et al) therein, which were related to the unlawful activity of
fraudulently accepting investments from the public in violation of the SRC and the AMLA. Herein
respondents et al filed several motions to intervene with answer in intervention claiming that they have a
valid interest in the bank accounts because in the involuntary insolvency proceedings of Baladjay spouses,
they were appointed as assignees of the spouses’ properties and their conduit companies. The RTC
denied the motions for intervention because under Sec 35 of the Rule of Procedure in cases of Civil
Forfeiture, any person who has not been impleaded nor intervened claiming an interest may apply by
verified petition for a declaration that the same legitimately belongs to him and for segregation of
exclusion of the monetary instrument or property corresponding thereto. The CA granted respondents
petition ruling that they were able to establish their rights as assignees thus they have a valid interest in
the civil forfeiture cases. Nothing in Civil Forfeiture Rules that prohibits an interested party from
intervening in the case before an order of forfeiture is issued. Here the Supreme Court ruled that the
petition was moot and academic because the assets subject of said cases were already all forfeited in
favor of the government. However, aggrieved parties have been allowed to intervene in civil forfeiture
cases filed by the AMLC.
Republic v Manalo et al GR 192303 Jun 4, 2014
 MUTUAL ASSISTANCE AMONG STATES
Request for assistance from a foreign State, the Council
• May execute the request or refuse to execute the same
• In case of the latter, inform the foreign State of any valid reason for not executing the
request or for delaying the execution thereof
• Recognize the principles of mutuality and reciprocity for this purpose at all times
The Council is empowered to act on request and may execute by:
• Tracking down, freezing, restraining and seizing assets alleged to be proceeds of any
unlawful activity under the procedure laid down in AMLA;
• Giving information needed by the foreign State within the procedures of AMLA;
• Applying for an order of forfeiture of any monetary instrument or property in court:
provided, 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 Stat, and
• a certification of an affidavit of a competent officer fo the requesting State stating that the conviction
and the order of forfeiture are final and there is no further appeal.
 MUTUAL ASSISTANCE AMONG STATES
Obtaining assistance from foreign States, the Council may request to any foreign State for
assistance in
• Tracking down, freezing, restraining and seizing assets alleged to be proceeds of any unlawful
activity;
• Obtaining information that it needs relating to any covered transaction, money laundering,
offense or any other matter directly or indirectly related thereof
• To the extent allowed by the law of the Foreign State, applying with the proper court therein for
an order to refer any premises belonging to or in the possession or control of an or all of the
persons named in said request and/or search any or all such persons 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
• 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 RTC ordering the forfeiture of said monetary instrument or property of a convicted
offenser and an affidavit of the clerk of court stating that the conviction and the order of
forfeiture are final and no further appeal.
 MUTUAL ASSISTANCE AMONG STATES
Limitation on request for mutual assistance – the Council may refuse to comply with any request where the action sought
• Contravene 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 inr elation to the money laundering offense.
Requirements for requests for mutual assistance – a request from a foreign state must
• 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
• State the grounds on which any person is being investigated or prosecuted for money laundering or the details of his
conviction
• Gives sufficient particulars sufficient to identify the said person
• Give particulars sufficient to give identify any covered institution believed to have any information, document, material
orobject which may be of assistance for the investigation or protection
• Ask from the covered institution concerned any information , document, material or object which may be of assistance to
the investigation or prosecution
• Specify the manner in which and to whom said information document, material or object detained pursuant ot said request
is to be produced
• 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
• Contain such other information as may assist in the execution of the request.
 MUTUAL ASSISTANCE AMONG STATES
Authentication of documents – for these purposes, 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 of the person administering the government of 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 service of the Philippines stationed in
the foreign State in which the record is kept, and authenticated by the seal of his office.

Extradition - the Philippines shall negotiate for the inclusion of money laundering
offense as defined in the AMLA among extraditable offenses in all foreign treaties.