SUSPICIOUS TRANSACTIONS Abroad

Businesses that are required Suspicious Activity

Reports (SAR) include:
Depository Institutions (i.e. Banks, Credit Unions,
US Branches of Offshore Banks and Savings and
Loans)
Precious metals dealers and dealer in gems
Insurance companies
Mortgage companies and brokers
Mutual fund brokers
Money service Businesses
Casinos and Card Clubs
Distinctions

In the Philippines, any bank transactions in

excess of P500,000 is automatically reported
to the AMLC based on the provisions of AMLA.
This is the "covered transaction."
A A suspicious transaction is, regardless of
amount, a transaction where there is no
underlying legal or trade obligation, purpose
or economic justification.
What is the duty of the "covered persons'?

Covered persons shall report to the ALMC all

covered transactions and suspicious
transactions within five (5) working days from
the occurrence thereof, unless the AMLC
prescribes a different period of not exceeding
fifteen (15) working days, which thereby shall
not be a violation of the Secrecy of Bank
Deposit Act, FCDU, and the General Banking
Law of 2000.
 Are lawyers and accountants required to report
covered and suspicious transactions?

Lawyers and accountants acting as independent

legal professionals are not required to report
covered and suspicious transactions if the
relevant information was obtained in
circumstances where they are subject to
professional secrecy or legal professional in
privilege.
What are the limitations on the duty to report?
Covered persons and their officers and employees are
prohibited from communicating directly or
indirectly, in any manner r by any means, to any
person or entity or the media the fact that a covered
or suspicious transaction has been reported or is about
to be reported, the contents of the report or any other
information relating 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 and employee ofthe covered person
and media shall be criminally liable.
What is the effect of breaching the confidentiality?

In case of breach of confidentiality that is

published or reported by media, the
responsible reporter, writer, president,
publisher, manager and editor-in-chief shall
be liable under the Act.
As amended by RA 10365, what does "Unlawful
Activity" refer to?

Unlawful activity refers to any act or omission or

series or combination thereof involving or having
direct relation to the following: (there are 34
listed unlawful activities or predicate crimes)
Kidnapping for ransom under Article 267 of RPC;
Sections in RA 9165 or Comprehensive Dangerous
Drugs Act of 2002;
Section 3 of RA 3019 Anti-Graft and Corrupt
Practices Act;
Plunder (at least 50M) under RA 7080;
Robbery and Extortion under RPC;
 As amended by RA 10365, what does "Unlawful
Activity" refer to?
Jueteng and Masiao punished as illegal
gambling under PD 1602;
Piracy on high seas under RPC;
Qualified theft under Art. 310 of RPC;
Swindling and otherforms of swindling of RPC;
Smuggling under RA Nos. 455 and 1937;
Violations of RA 8792 or the E-Commerce Act;
Hijacking and otherviolations under RA 6235
and Destructive arson and murder of RPC;

Terrorism and conspiracy to commit terrorism

of RA 9372;
Financing of Terrorism of RA 10168 or
or
Terrorism Financing Prevention and
Suppression Act of 2012;
Bribery of RPC;
Frauds and llegal exactions and Transactions of
RPC;
Malversation of Public Funds and Property of
RPC;
Forgeries and counterfeiting of RPC;
Violations of Sections 4-6 of RA 9208 or Anti-
Trafficking in Persons Act of 2003;
Violation of Sections 78-79 of PD 705 or the
Revised Forestry Code of the Philippines;
Violations of Sections 86-106 of RA 8550 or the
Fisheries Code of 1998;
Violations of RA 7942 or the Philippine Mining
Act of 1995;
 As amended by RA 10365, what does "Unlawful
Activity" refer to?
Violations of RA 9147 or the Wildlife Resources
Conservation and Protection Act;
Violation of Section 7 (b) of RA 9072 or the
NationalCaves and Cave Resources
Management Protection Act;
Violation of RA 6539 or the Anti-Carnapping
Act of 2002;
Violations of PD 1866 or the Laws on lllegal
Possession, Manufacture, Dealing in,
Acquisition of Firearms;

Violations of PD 1612 orthe Anti-Fencing Law;

Violation of Section 6 of RA 8042 or the
Migrant Workers and Overseas Filipino Act of
1995, as amended by RA 10022;
Violation of RA 8293 or the Intellectual
Property Code of the Philippines;
Violation of Section 4 of RA 9995 or the Anti-
Photo and Video Voyeurism Act of 2009;

Violation of Section 4 of RA 9775 or the Anti-Child

Pornography Act of 2009;
Violations of RA 7610 or the Special Protection of
Children Against Abuse, Exploitation and
Discrimination;
Fraudulent practices and other violations of RA
8799 or the Securities Regulation Code of 2000;
Felonies or offenses of a similar nature that are
punishable under the penal laws of of other
countries.
 May a person be charged of both offense of money
laundering and of unlawful activity?

Yes. As amended by RA 10365, Sec. 6 (a)

provides that any person may be charged with
and convicted of both the offense of money
laundering and unlawful activity.
It further states that the prosecution of any
offense or violation under the law shall
proceed independently of any proceeding
relating to the unlawful activity.

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 AMLA or any other
Philippine Law. (BSP Circular dated January 5, 2011)

What is the composition* of the AMLC/Council

It composed of (1) Governor of Bangko

Sentral ng Pilipinas as chairman, the (2)
Commissioner of Insurance Commission
and the (3) Chairman of the Securities and
Exchange Commission.
The AMLC shall act unanimously in the
discharge of its functions.
 What are the powers of the Anti-Money Laundering
Council (AMLC)?
Under RA 9194, there eleven powers given to the
AMLC, such as:
To require and receive covered or suspicious
transactions from covered institutions;
To institute civil forfeiture proceedings though
the Solicitor General;
To cause the filing of the complaints with the
DOJ or the Ombudsman for the prosecution of
money laundering offenses;
To investigate suspicious transactions and
covered transactions;

Implement measures to counteract money laundering

and enlist assistance of government agencies;
To issue implementing rules and regulations and impose
administrative sanctions for the violation of this law;
Seek court order to inquire or examine bank accounts;
T o issue orders to determine the true identity of owner
of the monetary instrument or property subject of a
covered transaction or suspicious transaction;
Assist foreign governments and seek assistance in the
anti-money laundering activities.

What are the other powers of the Anti-Money

Laundering Council (AMLC)?
(1) Apply before the CA, ex parte, for the freezing of any
monetary instrument or property alleged to be
laundered, proceeds from, or instrumentalities used
or intended for use in any unlawful activity;
(2) Require the Land Registration Authority and all its
Registries of Deeds to submit to the AMLC, reports
on real estate transactions involving an amount in
excess of Five Hundred Thousannd pesos
(P500,000.00) within fifteen (15) days from the date
of the registration of the transaction and submit all
other relevant documents of all real estate
transactions.
 How is the freeze order of monetary instrument or
property related to unlawful activity made?
Sec. 10 of RA 9194 amended Sec. 10 of RA 9160,
and it was further amended
10167:
by Section 10 of RA

Verified ex parte petition by the AMLC;

I f there is probable cause, CA will issue a freeze
order effective immediately;
The freeze order shall not exceed 6 months;
A case must be filed against the person, if none,
the freeze order shall be deemed ipso facto lifted;
This new rule will not apply to pending cases in
COurt
Which court has the jurisdiction
to issue the freeze order?

Only the Court of Appeals has the sole

authority to issue the freeze order.
No court shall issue a temporary
restraining order or a writ of injunction
against any freeze order, except the
Supreme Court.
Period to Resolve Petition /Effectivity

The Court of Appeals shall resolve the resolve

the petition to freeze within twenty-four (24)
hours from filing thereof.

The freeze order shall be effectively immediately

and shall not exceed six (6) months.
What are related accounts?

Related Accounts shall refer to accounts, the

funds and sources of which originated from
and/or are materially linked to the monetary
instrument(s) or property(ies) subject of the
freeze order. (RA 10167, Sec. 2)
A court order ex parte must first be obtained
before the AMLC can inquire into related
accounts.
 Numbered Accounts (IRR 2018)
Peso and foreign currency non-checking numbered accounts shall be allowed:
Provided, That the true identity of the customers of all peso and foreign
currency non-checking numbered accounts are satisfactorily establisheed
based on official and other reliable documents and records, and that the
information and documents required under the provisions of these Rules are
obtained and recorded by the covered institution. No peso and foreign
currency non-checking accounts shall be allowed without the establishment
of such identity and in the manner herein provided. Provided, further, That
covered and suspicious transaction reports involving peso and foreign
currency non-checking numbered accounts submitted to the AMLC pursuant
to Rule 7.b.1 of these Rules shall contain the true name of the account holder.
The BSP may conduct annual testing for the purpose of determining the
existence and true identity of the owners of such accounts. The SEC and the
IC may conduct similar testing more often than once a year and covering such
other related purposes as may be allowed under their respective charters.

Risk-Based ldentification Process (IRR 2018)

A covered institution shall develop clear, written and

graduateed customer acceptance policies and
procedures including a set of criteria for customers
that are likely to pose low, normal or high risk to their
operations as well as the standards in applying
reduced, average and enhanced due diligence
includinga set of conditions for the denial of account
opening. These policies and procedures shall ensure
that the financially or socially disadvantaged are not
denied access to financial services while at the same
time prevent suspicious individuals or entities from
opening an account.

"Risk-Based Approach" refers to the process by

which countries, competent authorities, and and
covered persons identify, assess, and understand
the ML/TF risks to which they are exposed, and take
the appropriate mitigation measures in accordance
with the level of risk. This includes prioritization and
efficient allocation of resources by the relevant key
players and stakeholders in applying AML/CTF
measures in their operations in a way that ensures
that they are commensurate with the risks involved.
 Materially-linked Accounts shall include the following: cALE
1 All accounts or monetary instruments underthe name of the person
whose accounts, monetary instruments, or properties are the subject of
the freeze order or an order of inquiry;
2 All accounts or monetary instruments held, owned, or controlled by
the owner or holder of the accounts, monetary instruments, or
properties subject of the freeze order or order of inquiry, whether such
accounts are held, owned or controlled singly or jointly with another
person;
3. All "In Trust For" accounts where either the trustee or the trustor
pertains to a person whose accounts, monetary instruments, or
properties are the subject of the freeze order or order of inquiry;
4. All accounts held for the benefit or in the interest of the person
whose accounts, monetary instruments, or properties are the subject of
the freeze order or order of inquiry; and
5. All other accounts, shares, units, or monetary instruments that are
similar, analogous, or identical to any

Freeze Order for Related and

Materially-Linked Accounts

Considering the intricate and diverse web of

interlocking accounts that a person may create
in different covered persons, and the high
probability that these accounts are utilized to
divert, move, conceal, and disguise the
monetary instrument or property subject of the
freeze order, the AMLC may include in its
petition the freezing of related and materially-
linked accounts.
What is the remedy of a person whose account has
been frozen?

File a motion to lift the freeze order and

the cOurt must resolve this motion
before the expiration of the freeze orde
Is AMLC authorized to inquire into bank deposits?

Yes. AMLC may inquire into or examine upon

order of any competent court when there is
probable cause that the deposit or investments
involved are in any way related to a money
laundering offense. (Section 11, RA 9160) upon
ex parte application in cases of violation of
AMLA.

The Court of Appeals shall resolve the application

within 24 hours from filing thereof.
 Under what circumstances is AMLC authorized to
inquire into bank deposits?

Only upon order of competent court in case

violation of the law, when there is probable
cause that the deposits or investments are
related to an unlawful activity or money
laundering offense.
That no court order shall be required in cases
involving unlawful activities as defined in Sec
(1) 1, (2) and (12).
Nocourt order shall be required for the examination of bank
deposits by AMLC in cases involving:
Kidnapping for ransom under Article 267 of RPC;
Sections 4, 5, 8, 9, 10, 12, 13, 14, 15 and 16 of RA 9165,
otherwise known as the Comprehensive Dangerous Drugs Act
of 2002;
Hijacking and other violations under RA 6235; destructive arson
and murder as defined under RPC, including those perpetrated
by terrorists against non-combatant persons and similar targets;
Felonies and Offenses of nature similar to those mentioned in
Section 3 (i) (1), (2) and (12) of AMLA which are punishable
under penal laws of other countries;
Terrorism and conspiracy to commit terrorism (RA 9372);
Financing of Terrorism under RA 10168

What are the penal provisions under RA 9160?

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 (np
3,000,000.00) 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 (Php 1,500,000.00) but not more than Three million Philippine
pesos (Php 3,000,000.00), 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 (Php
100,000.00) but not more than Five hundred thousand Philippine
pesos (Php 500,000.00), or both, shall be imposed on a person
convicted under Section 4(c) of this Act.
 What are the penal provisions under RA 10365?
Penalties for the Crime of Money Laundering. The penalty of
imprisonment ranging from seven (7) to fourteen (14) years anda
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), (b), (c) and
(d) of this Act.
The penalty of imprisonment from four (4) to seven (7) years anda
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(e) and (f) 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 Phil. pesos
(Php100,000.00) but not more than Php500,000.00, or both, shal
be imposed on a person convicted under the last par. of Sec. 4 of
this Act.

What are the penal provisions?

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.
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 (Php 100,000.00)
but not more than Five hundred thousand Philippine pesos (Php
500,000.00), at the discretion of the court: Provided, That the offender
is not entitled to avail the benefits of the Probation Law
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.
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 (Php
500,000.00) but not more than One million Philippine
pesos (Php 1,000,000.00) shall be imposed on a person
convicted for a violation under Section 9(c). In the case of a
breach of confidentiality that is published or reported by
media, the responsible reporter, writer, president,
publisher, manager and editor-in-chief shall be liable under
this Act." uonv n mn vam ona n r u r
 What are the penalties imposable?

Fines and imprisonment for conviction of

money laundering offense;
Civil and criminal forfeiture of monetary
instrument or property;
Convicted offender to pay an amount
equal to the value of monetary
instrument or property ordered forfeited
when order of forfeiture cannot be
effected.
Other pertinent rules
A. AMLA Civil Forfeiture provisions
-
AMLC files though OSG
-
Claim on forfeited assets
-

Payment in lieu of forfeiture

B. Supreme Court's Civil Forfeiture Rules
- Only AMLC, through OSG may institute

Venue is in the RTC where the monetary

instruments are located
-
Petition must be acted upon within 24 hours
AMLA
Prohibitions Against Political Harassment
Not be used for political persecution or
harassment
Not be used to hamper competition in trade and
Commerce

Not be used against a candidate for an electoral

office during an election period (Section 16, RA
9160)
 AMLA
The provision of this law shall not be construed or implemented
in a manner that will discriminate against certain customer
types, such as politically-exposed persons, as well as their
relatives, or againsta certain religion, race or ethnic origin, or
such other attributes or profiles when used as the only basis
to deny these persons access to the services provided by the
covered persons. Whenever a bank, or quasi-bank, financial
institution or whenever any person or entity commits said
discriminatory act, the person or persons responsible for
such violation shall be subject to sanctions as may be
deemed appropriate by their respective regulators."

Human Security Act of 2007 (RA 9372)

It allows examination and sequestration of deposits

based on certain conditions.
The Court of Appeals designated as a special court to
handle anti-terrorism cases may authorize in
writing any police or law enforcement officer and
the members of his/her team to examine or cause
the examination of the deposits, placement, trust
accounts, assets and records in a bank or financial
institution (Section 27, HAS)

Terrorism Financing and Prevention and

Suppression Act (RA 10168)
AMLC is authorized to investigate property or funds
(without a court order) that are in any way related to
financing of terrorism or acts of terrorism OR the
property or funds of any person or persons in relation
to whom there is probable cause that such person is
involved in the acts of terrorism (Sec. 10, RA 10168)
AMLC, either upon its own initiative or at request of the
Anti-Terrorism Council, further authorize to issue an ex
parte order to freeze accounts without delay. Freeze
order shall be for a period of 20 days, unless extended
by the CA up to a period not exceeding six (6) months
upon petition by the AMLC. \ # CarrTTEn TA v a D cDA DeiTDUAo