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VI. LAW ON OTHER BUSINESS TRANSACTIONS

D. ANTI-MONEY LAUNDERING ACT

(RA 9160, as amended by RA 11521)

D.1. PURPOSE, POLICIES AND PRINCIPLES

▪ Policy - The law declared that it is the policy of the State

1) To protect and preserve the integrity and confidentiality of bank accounts;
2) To ensure that the Philippines shall not be used as a money laundering site for the proceeds
of any unlawful activity.

The Philippines shall extend cooperation in transnational investigations and prosecutions of

persons involved in money laundering activities wherever committed. (s2)

D.2. DEFINITION OF TERMS

• Monetary Instrument –
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 marked instruments; and
4) other similar instruments where title thereto passes to another by endorsement, assignment
or delivery.

• Offender – any person who commits a money laundering offense.

• Person – any natural or juridical person.

• Proceeds – an amount derived or realized from an unlawful activity.

• Proliferation financing – when a person:

1) Makes available an asset; or
2) Provides a financial service; or
3) Conducts a financial transaction; and the person knows that, or is reckless as to whether,
the asset, financial service or financial transaction is intended to, in whole or in part,
facilitate proliferation of weapons of mass destruction in relation to UN Security Council
Resolution Number 1718 0f 2006 and 2231 of 2015.

• Real estate developer – any natural or juridical person engaged in the business of developing
real estate development project for the account of the developer and offering them for sale or
lease.

• Real estate broker – a duly registered and licensed natural person who, for a professional fee,
omission or other valuable consideration, acts as an agent of a party in a real estate transaction
to offer, advertise, solicit, list, promote, mediate, negotiate, or effect the meeting of the minds
on the sale, purchase, exchange, mortgage, lease or joint venture, or other similar transaction
on real estate or any interest therein.

• Supervising Authority – the appropriate supervisory or regulatory agency, department or

office supervising or regulating the covered persons.
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• Targeted financial sanctions – both asset freezing and prohibition to prevent funds or other
assets from being made available, directly or indirectly, for the benefit of any individual,
natural or legal persons or entity designated pursuant to relevant United Nations Security
Council resolution and its designation processes.

• Transaction – 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.

D.3. UNLAWFUL ACTIVITIES

▪ Unlawful activity refers to any act or omission or series or combination thereof involving or
having direct relation to any of the acts specifically mentioned in S3(i) of RA9160 as amended
by S2 of RA 10365.
1) Kidnapping for ransom; (RPC)
2) Drug Offenses - Violation of the Comprehensive Dangerous Drugs Act of 2002;
3) Graft and corrupt practices - Violation of the Anti-Graft and Corrupt Practices Act;
4) Plunder;
5) Robbery and extortion; (RPC)
6) Jueteng and Masiao punished as illegal gambling under PD 1602;
7) Piracy on the high seas; (RPC)
8) Qualified theft; (RPC)
9) Swindling and other forms of swindling; (RPC)
10) Smuggling;
11) Violations of the Electronic Commerce Act of 2000;
12) Hijacking and other violations under RA 6235;
13) Destructive arson and murder; (RPC)
14) Terrorism and conspiracy to commit terrorism;
15) Financing of terrorism;
16) Bribery; (RPC)
17) Frauds and illegal exactions and transactions; (RPC)
18) Malversation of public funds and property; (RPC)
19) Forgeries and counterfeiting (RPC)
20) Human trafficking - Violation the Anti-Trafficking in Persons Act of 2003;
21) Forestry violations - Violation of the Revised Forestry Code of the Phils., as amended;
22) Fisheries violations - Violation of the Philippine Fisheries Code of 1998;
23) Mining laws - Violation of the Philippine Mining Act of 1995;
24) Wildlife protection - Violation of the Wildlife Resources Conservation and Protection Act;
25) Caves protection law - Violation of the National Caves and Cave Resources Management
Protection Act;
26) Carnapping - Violation of the Anti-Carnapping Act;
27) Firearms violations - Violations of the Laws on Illegal/Unlawful Possession, Manufacture
of Firearms, Ammunition or Explosives;
28) Fencing- Violation of the Anti-Fencing Law;
29) Migrant workers and OFWs - Violation of the Migrant Workers and Overseas Filipinos
Act;
30) IPL violations - Violation of the Intellectual Property Code of the Philippines;
31) Voyeurism - Violation of the Anti-Photo and Video Voyeurism Act;
32) Child porno - Violation of the Anti-Child Pornography Act of 2009;
33) Child abuse - Violations of the Special Protection of Children Against Abuse, Exploitation
and Discrimination;
34) Fraudulent practices and other violations under the SRC of 2000; and
35) Felonies or offenses of a similar nature that are punishable under the penal laws of other
countries;
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D.4. COVERED PERSONS

▪ Covered persons: - register with AMLC

1) Banks, non-banks, quasi-banks, trust entities, foreign exchange dealers, pawnshops, money
changers, remittance and transfer companies and other similar entities and all other persons
and their subsidiaries and affiliates supervised or regulated by the BSP;
2) Insurance companies, pre-need companies and all other persons supervised or regulated by
the IC;
3) Entities supervised or regulated by the SEC:
a) Securities dealers, brokers, salesmen, investment houses and other similar persons
managing securities or rendering services as investment agent, advisor or
consultant;
b) Mutual funds, close-end investment companies, common trust funds, and other
similar persons; and
c) 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 SEC;
4) Jewelry dealers in precious metals, who, as a business, trade in precious metals, for
transactions in excess of P1M;
5) Jewelry dealers in precious stones, who, as a business, trade in precious stones, for
transactions in excess of P1M;
6) Company service providers which, as business, provide any of the following services to
third parties: [incl. CPAs and lawyers]
a) Acting as a formation agent of juridical persons;
b) Acting as (or arranging for another person to act as) a director or corporate secretary
of a company, a partner of a partnership, or a similar position in relation to other
persons;
c) Providing a registered office, business address or accommodation, correspondence
or administrative address for a company, a partnership or any other legal person or
arrangement; and
d) Acting as (or arranging for another person to act as) a nominee shareholder for
another person; and
7) Persons who provide any of the following services:
a) Managing of client money, securities or other assets;
b) Management of bank, savings or securities accounts;
c) Organization of contributions for the creation, operation of management of
companies; and
d) Creation, operation or management of juridical persons or arrangements, and
buying and selling business entities.
8) Real estate developers and brokers;
9) Casinos, incl internet and ship-based casinos, with respect to their casino cash transactions
related to their gaming operations.

▪ Covered persons shall exclude lawyers and accountants acting as independent legal
professionals in relation to information concerning their clients or where disclosure of
information would compromise client confidences or the attorney-client relationship. (S3a)

D.5. MONEY LAUNDERING, TERRORISM AND FINANCING AND ASSET

FORFEITURE

▪ Money laundering is committed by

1) Any person who, knowing that any monetary instrument or property represents, involves,
or relates to the proceeds of any unlawful activity:
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a) Transacts said monetary instrument or property;

b) Converts, transfers, disposes of, moves, acquires, possess or uses said monetary
instrument or property;
c) Conceals or disguises the true nature, source, location, disposition, movement or
ownership of or rights with respect to said monetary instrument or property;
d) Attempts or conspires to commit money laundering offenses;
e) Aids, abets, assists in or counsels the commission of the money laundering
offenses; and
f) Performs or fails to perform any act as a result of which he facilitates the offense
of money laundering.
2) Any covered person, who knowing that a covered or suspicious transaction is required
under the law to be reported to the AMLC, fails to do so.

D.6. PREVENTIVE MEASURES AND OBLIGATIONS OF COVERED PERSONS

▪ Obligations of covered persons:

1) Customer identification –shall establish and record the true identity of its clients based on
official docs.
a) Face-to-face contact – covered persons shall conduct f2f contact at the
commencement of the relationship, or as reasonably practicable so as not to
interrupt the normal conduct of business
b) Minimum customer information and identification documents
i. Name of customer;
ii. Date and place of birth;
iii. Name of beneficial owner, if applicable;
iv. Name of beneficiary (in case of insurance contracts or remittance
transactions);
v. Present address;
vi. Permanent addresses;
vii. Contact number of information;
viii. Nationality;
ix. Specimen signatures or biometrics of the customer;
x. Nature of work and name of employer or nature of self-employment
business, if applicable;
xi. Sources of funds or property; and
xii. Tax Identification Number (TIN), Social Security System (SSS) number or
Government Service Insurance System (GSIS) number, if applicable.

PROHIBITED ACCOUNTS:
a) Anonymous accounts and accounts under fictitious names – Covered persons
shall maintain customers’ account only in the true and full name of the account
owner or holder.
b) Numbered accounts – except for non-checking numbered accounts. Covered and
suspicious transaction reports involving non-checking numbered accounts shall
contain true name of the account holder.

2) RECORD KEEPING - Records of all transactions shall be maintained & safely stored for
5yrs from dates of transactions or for closed accounts, for at least 5yrs from the dates when
the related records were closed.

3) Reporting of covered and suspicious transactions –shall report to the AMLC all covered
transactions and suspicious transactions within 5 working days from occurrence thereof,
unless the AMLC prescribes a different period not exceeding 15 working days.
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4) Prohibition against unwarranted disclosure of reports –prohibited from communicating,

directly or indirectly, in any manner or by any means, to any person, the fact that a covered
or suspicious transaction report was made, the contents thereof, or any other information
in relation thereto.

5) Prohibition against malicious reporting – Committed by 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.

▪ The BSP may, in the course of a periodic or special examination, check the compliance of a
covered institution with the requirements of the AMLA and its implementing rules and
regulations. (S11).

▪ Covered transaction
1) Transaction in cash or other equivalent monetary instrument exceeding P500k within 1
banking day (S3b);
2) Transaction with or involving jewelry dealers, dealers in precious metals and dealers in
precious stones in cash or other equivalent monetary instrument exceeding P1M;
3) Casino cash transaction exceeding P5M or its equivalent in other currency (R2S1w, IRR)
4) For real estate developers and brokers engaging in single cash transactions worth more than
P7.5M.

▪ Suspicious transactions are transactions with covered institutions, regardless of the amounts
involved, where any of the following circumstances exist:
1) No underlying legal or trade obligation, purpose or economic justification;
2) Client is not properly identified;
3) Amount involved is not commensurate with the business or financial capacity of the client;
4) Transaction structured in order to avoid being the subject of reportorial requirements;
5) Transaction which deviates from client’s profile and/or the client’s past transactions with
the covered institution;
6) Transaction related to an unlawful activity, incl. those committed or about to committed;
7) Similar or analogous transactions. (s3)

Should a transaction be determined to be both a covered and a suspicious transaction, it is

considered as suspicious transaction.

D.9. SAFE HARBOR

▪ No administrative, criminal, or civil proceedings shall lie against any person for having made
a covered or suspicious transaction report in the regular performance of his duties in GF,
whether or not such reporting results in any criminal prosecution under this Act of any other
law. (s9[c])