MONEY LAUNDERING

An act committed by any person:

 Who, knowing that any monetary instrument or property relates to the proceeds of any
unlawful activity.
a) Transacts said monetary instruments or property
b) Converts, transfers, disposes of, moves, acquires, possesses or uses said monetary instrument
or property
c) Conceals (hide) 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 (plot; secret plan) to commit money laundering offenses referred to in
(a), (b), or (c).
e) Aids, abets (encourage or assist someone to do something wrong) assists in or counsels the
commission of the money laundering offenses referred to in (a), (b), or (c).
f) Performs or fails to perform any act as result of which he facilitates (to make easier or less
difficult) the offense of money laundering referred to in (a), (b), or (c).

Section 4, Amended AMLA, R.A. 10365 23 July 2012

The Concept of Money Laundering

 It starts with illegal or dirty money.

 Then put through a cycle of transaction or washed.
 So that the dirty money comes out the other end as legal or clean money.
 The source of illegally obtained funds is obscured (to describe something that is difficult to
understand, unclear) through a succession of transfers so the same funds can eventually appear
as LEGITIMATE INCOME.
The Basic Structure of Money Laundering

A crime, does not pay unless you enjoy its fruits when dirty money becomes clean money through the
so called money laundering.
Philippine Policy on Money Laundering

 The philippines shall protect and preserve the integrity and confidentiality of Bank Accounts.
 The State shall not be used as a Money Laundering Site for the proceeds of any unlawful
activity.
 The State shall extend cooperation in Transnational Investigations and prosecutions of persons
involved in Money Laundering activities wherever committed, in the implementation of
targeted Financial Sanctions related to the financing of the proliferation (rapid increase in
numbers) of Weapons of Mass Destruction, Terrorism, and financing of terrorism, persuant (in
accordance) to the resolution of the United Nations Council.

Section 1, Amended AMLA, R.A 11521 , 8 February 2021

Section 2, Anti-Money Laundering Act, R.A. 9160 17 October 2001

Covered Institutions

Person refers to any natural or juridical person.

1. Persons supervised or regulated by BSP, such as:

a) Banks
b) Non-banks - a business that is not an officially established bank but offers many similar services.
c) Quasi-banks - entities engaged in the borrowing of funds through the issuance, endorsement
or assignment with recourse or acceptance of deposit substitutes
d) Trust entities - is a legal entity with separate and distinct rights, similar to a person or
corporation. In a trust, a party known as a trustor gives another party, the trustee, the right to
hold title to and manage property or assets for the benefit of a third party, the beneficiary.
e) Pawnshops
f) Non-stock saving and loan associations - are engaged exclusively in the business of collecting
savings from their members and financing their personal loans. Profits are generated primarily
from lending and investing activities, which are given back to members through net income
distribution.
g) Electric money issuers - are the digital alternative of banks, operating through an online
platform and licensed to manage transactions and issue debit cards. EMI clients can use either
the platform or their issued debit card to carry out payment transactions.
h) All other persons and their subsidiaries and affiliates supervised or regulated by the BSP
RIRR – foreign exchange dealers (any person who engages in the business of buying and selling
foreign currencies) money changers, and remittance and transfer companies
2. Persons supervised or regulated by IC, such as:

a) Insurance companies
b) pre-need companies - any corporation registered with the Commission and
authorized/licensed to sell or offer to sell pre-need plans.
 Pre-need plans refers to contracts that provide for the performance of future service, payment
of monetary consideration or delivery of other benefits at the time of actual need or agreed
maturity date of the contract. This includes life, pension, education, interment, and other plans,
instruments or contracts.
c) insurance agents - a person employed to sell insurance policies
d) insurance brokers - is a professional who acts as an intermediary between a consumer and an
insurance company, helping the former find a policy that best suits their needs. Insurance
brokers represent consumers, not insurance companies
e) professional reinsurers - a company that provides financial protection to insurance companies.
Reinsurers handle risks that are too large for insurance companies to handle on their own and
make it possible for insurers to obtain more business than they would otherwise be able to.
f) reinsurance brokers - is an intermediary individual or firm who is paid a fee or commission to
find and place new business on behalf of both the insured client and insurer. This can involve
negotiating rates or contracts while sourcing the best-suited policies on the market.
g) holding companies - a company created to buy and possess the shares of other companies,
which it then controls.
h) holding company systems - means an entity comprising two or more affiliated persons.
i) mutual benefit assocoiations - is an organized mutual benefit association that provides security,
protection and meaningful financial solutions for the uniformed services of the Philippines and
their families.
j) all other person and their subsidiaries and affiliates supervised or regulated by the IC.

3. Persons supervised or regulated by SEC, such as:

a) Securities dealers, brokers, salesmen, investment houses, and other similar persons managing
securities or rendering services such as investment agents, advisors, or consultants.
b) mutual funds or open-end companies, close-end investment companies or issuers and other
similar entities;
c) other entities administering or otherwise dealing in commodities, or financial derivatives based
thereon, valuable objects, cash substitutes and other similar monetary instruments or properties
supervised and regulated by the SEC.
4. The following Designated Non-Financial Businesses and Professions (DNFBPs):

a) Jewelry dealers, dealers in precious metals, and dealers in precious stones.

b) Company service providers which, as a business, provide any of the following services to third
parties:
 Acting as formation agent of juridical persons
 Acting as a director or corporate secretary
 Providing a registered office; business address or accommodation, correspondence or
administrative address for a company, a partnership or any other legalperson or
arrangement; and
 Acting as a nominee shareholder for another persons
c) Persons, including lawyers and accountants, who provide any of the following services:
 Managing of client money, securities or other assets;
 Management of bank, savings, securities, assets
 Organization of contributions for the creation, operation or management of companies; and
 Creation, operation or management of juridical persons or and buying arrangements, and
selling business entities.
Independent legal professionals are not covered person
d) Casinos, including internet and ship-based casinos, with respect to their casino cash
transactions related to their gaming operations.

Covered Transactions

 A transaction in cash or other equivalent monetary instrument exceeding 500,000 pesos within
one banking day.
 A transaction exceeding 1,000,000 pesos in cases of jewelry dealers, dealers in precious metals
and dealers in precious stones.

Covered Transactions Report (CTR) – report of covered persons to AMLC

Suspicious Transactions – regardless of the amount

1. There is no underlying legal or trade obligation, purpose or economic justification;

2. The client is not properly identified
3. The amount involved is not commensruate with the business or financial capacity of the client
4. Taking into account all known circumstances, it may be perceived that the client’s transaction is
structured in order to avoid being the subject of reporting requirements under AMLA;
5. Any circumstance relating to the transaction which is observed to deviate from the profile of the
client and/or the client’s past transactions with the covered person;
6. The transaction is any way related to an unlawful activity or any money laundering activity or
offense that is about to be commited, is being, or has been committed; or
7. Any transaction that is similar, analogous, identical to any of the foregoing.

Suspicious Transaction Report (STR) - Report of covered person to AMLC.

Monetary Instruments

1. Coins or currency of legal tender of the Philippines, or of any other country;

2. Credit instruments, including bank deposits, financial interest, royalties, commissions and other
intangible property;
3. Drafts, chechks and notes;
4. Stocks or shares, participation or interest in a corporation or in a commercial enterprise or profit-
making venture and evidenced by a certificate, contract, instrument, whether written or
electronic in character, including those enumerated in Section 3 od the Securities Regulation
Code;
5. A participation or interest in any non-stock, non-profit corporation;
6. 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;
7. Contracts or policies of insurance, life or non-life, contracts of suretyship, pre-need plans and
member certificates issued by mutual benefit association; and
8. Other similar instruments where title thereto passes to another by endorsement, assignment or
delivery.

Unlawful Activities

1. Kidnapping for Ransom

2. Comprehensive Dangerous Drugs Act of 2002
3. Anti-Graft and Corrupt Practices Act
4. Plunder
5. "Robbery" and "Extortion"
6. "Jueteng" (Luzon) and "Masiao" (vis/mmin)
7. Piracy on the High Seas
8. "Qualified Theft"
9. "Swindling"
10. "Smuggling" "Tariff and Customs Code of the Philippines";
11. "Electronic Commerce Act of 2000";
12. "Hijacking" "Anti-Hijacking Law"; "Destructive Arson"; and "Murder", as defined under the
Revised Penal Code, as amended;
13. "Terrorism" and "Conspiracy to Commit Terrorism"
14. "Financing of Terrorism
15. "Bribery" "Corruption of Public Officers"
16. "Frauds and Illegal Exactions
17. "Malversation of Public Funds"
18. "Forgeries" and "Counterfeiting"
19. "Anti-Trafficking in Persons Act of 2003",
20. "Revised Forestry Code of the Philippines
21. "Philippine Fisheries Code of 1998";
22. Philippine Mining Act of 1995";
23. "Wildlife Resources Conservation and Protection Act";
24. National Caves and Cave Resources Management Protection Act";
 25. Anti-Carnapping Act of 2002, as amended";
26. "Codifying the Laws on Illegal/Unlawful Possession, . Manufacture, Dealing In, Acquisition or
Disposition of Firearms, Ammunition or Explosives";
27. "Anti-Fencing Law";
28. "Migrant Workers and Overseas Filipinos Act of 1995", as amended by Republic Act No. 10022;
29. Violation of Republic Act No. 8293, otherwise known as the "Intellectual Property Code of the
Philippines, as amended";
30. "Anti-Photo and Video Voyeurism Act of 2009";
31. "Anti-Child Pornogrophy Act of 2009";
32. "Special Protection of Children Against Abuse, Exploitation and Discrimination";
33. "Securities Regulation Code of 2000";
34. Felonies or offenses of a nature similar to the aforementioned unlawful activities that are
punishable under the penal laws of other countries

Money Laundering Offenses

A. Any person who, knowing that any monetary instrument or property represents, involves, or relates
to the proceeds of any unlawful activity:
1. transacts said monetary instrument or property;
2. converts, transfers, disposes of, moves, acquires, possesses or uses said monetary instrument
or property;
3. conceals or disguises the true nature, source, location, disposition, movement or ownership of
or rights with respect to said monetary instrument or property;
4. attempts or conspires to commit money laundering offenses referred to in (1), (2) or (3) above;
5. aids, abets, assists in or counsels the commission of the money laundering offenses referred to
in (1), (2) or (3) above; and
6. performs or fails to perform any act as a result of which he facilitates the offense of money
laundering referred to in (1), (2) or (3) above.
B. Any covered person who, knowing that a covered or suspicious transaction is required under the
AMLA to be reported to the AMLC, fails to do so.

Jurisdiction of money laundering cases

A. Regional Trial Court. - The regional trial courts shall have the jurisdiction to try money
laundering cases committed by private individuals, and public officers not covered by the
jurisdiction of the Sandiganbayan.
B. Sandiganbayan. - The Sandiganbayan shall have jurisdiction to try money laundering cases
committed by public officers under its jurisdiction, and private persons who are in conspiracy
with such public officers.

Prosecution of money laundering

 A. Independent Proceedings. - The prosecution of money laundering and the unlawful activity shall
proceed independently.
B. Separate and Distinct Elements. - The elements of money laundering are separate and distinct
from the elements of the unlawful activity. The elements of the unlawful activity, including the
identity of the perpetrators and the details of the commission of the unlawful activity, need not
be established by proof beyond reasonable doubt in the case for money laundering.
C. Knowledge. - The element of knowledge may be established by direct or circumstantial
evidence.
D. Rules of Procedure. - The Rules of Court shall govern all proceedings concerning the
prosecution of money laundering.

Anti-money laundering council (AMLC)

The AMLC is composed of the:

 Governor of the BSP as Chairperson

 Commissioner of the IC
 Chairperson of the SEC, as Members. - Must be a unanimous decision

The AMLC Secretariat

A. Executive Director

 Head of AMLC secretariat-Appointed by AMLC by 5 year term

 Member of philippine bar (CPA-LAWYER can be)-Atleast 35 years of age
 Served atleast 5 years in BSP, IC, SEC
 good moral character, unquestionable integrity and known probity
Compositione.
Detail and Secondment

Functions of AMLC
1. to require and receive covered or suspicious transaction reports from covered persons;
2. to issue orders addressed to the appropriate Supervising Authority or the covered person to
determine the true identity of the owner of any monetary instrument or property subject of a
CTR/STR
3. to institute civil forfeiture proceedings and all other remedial proceedings through the Office of
the Solicitor General;
4. to file complaints with the DOJ or the Office of the Ombudsman for the prosecution of money
laundering offenses and other violations under the AM LA;
5. to investigate suspicious transactions and covered transactions deemed suspicious after
investigation by the money laundering activities and other violations of the AMLA;
6. to file with the Court of Appeals, ex parte through theOffice of the Solicitor General:
a. petition for the freezing of any monetary instrument orproperty that is in any way related to an
unlawful activity; or
b. an application for authority to inquire into or examine any particular deposit or investment,
including related accounts, with any banking institution or non-bank financial institution.
 7. to formulate and implement such measures as may be necessary and justified under the AMLA
to counteract money laundering.
8. to receive and take action in respect of any request from foreign states for assistance in their
own anti-moneylaundering operations as provided in the AMLA.
9. to develop educational programs, including awareness campaign on the pernicious effects,
methods and techniques, prevention, ways of prosecuting offenders
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 moneylaundering
offenses and prosecution of offenders
11. to impose administrative sanctions for the violation oflaws, rules, regulations, orders, and
resolutions issued pursuant thereto.
12. to require the Land Registration Authority and all its Registries of Deeds to submit to the AMLC,
reports on all real estate transactions involving an amount in excess of Five hundred thousand
pesos (P500,OOO.OO) within fifteen (15) days from the date of registration of the transaction, in
a form to be prescribed by the AMLC. The AMLC may also require the Land Registration
Authority and all its Registries of Deeds to submit copies of relevant documents of all real estate
transactions.

Prevention of money laundering

A. Customer Due Diligence

B. Record Keeping
Covered persons shall maintain and safely store for five (5) years from the dates of transactions
all records of customer identification and transaction documents of their customers.
 Retention of Records Where the Accountis the Subject of a Case
 Closed Accounts
 Form of Records
C. Transaction Reporting

Reporting of covered and suspicious transactions

Covered persons shall report to the AMLC all covered transactions and suspicious transactions within five
(5) working days, unless the AMLC prescribes a different period not exceeding fifteen (15) working days,
from the occurrence thereof.

 Substance and Form of Reports.

 Confidentiality of Reporting
 Safe Harbor Provision
 Enrollment with the AMLC's Reporting

System
For suspicious transaction, occurrence means it should be made not exceeding 10 calendar days from
date of transaction but it must be reckoned when the person transacting is involved in unlawful activity.

Penalties for the crime of money laundering

A. Penalties for Money Laundering

The following are the penalties to be imposed on persons convicted of money laundering:
1. Penalties for Section 4(a), (b), (c) and (d) of the AMLA.
 7 to 14 yrs. Imprisonment
 a fine of not less than three million pesos (Php3,000,000.00), but not more than
twice the value of the monetary instrument or property involved in the offense
2. Penalties for Section 4(e) and (f) of the AMLA.
 4-7 yrs imprisonment
 a fine of not less than one million five hundred thousand pesos (Php1,SOO,000.00)
but not morethan three million pesos (Php3,000,000.00)
3. Penalties for the Last Paragraph of Section 4 of the AMLA.
 6 months to 4 years
 fine of not less than one hundred thousand pesos (Php100,000.00) but not more
than five hundred thousand pesos (PhpSOO,OOO.OO), or both,
B. Penalties for Knowingly Participating in the Commission of Money Laundering
 4-7 yrs imprisonment
 a fine corresponding to not more than two hundred percent (200%) of the value of
the monetary instrument or property laundered
 shall be imposed upon the covered person, its directors, officers or personnel who
knowingly participated in the commission of the crime of money laundering.
C. Penalties for Failure to Keep Records
 6 months to 1 year
 fine of not less than one hundred thousandpesos (Php100,000.00) but not more
than five hundred thousand pesos (Php5OO,OOO.OO), or both
 shall be imposed on a person convicted under Section 9(b) of the AM LA
D. Penalties for 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

 6 months to 4 years
 a fine of not less than one hundred thousand pesos (Php100,000.00) but not more than five
hundred thousand pesos (Php500,OOO.OO), at the discretion ofthe court:
 Provided, that the offender is not entitled to avail of the benefits of the Probation Law.
 If the offender is a corporation, association, partnership or any other juridical person, the
penalty of imprisonment and/or fine shall be imposed upon the responsible officers, as the case
may be, who participated in, or allowed by their gross negligence the commission of the crime
and 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 testifyand refuses to do the same or
purposely fails to testify shall suffer the same penalties herein prescribed.
E. Penalties for Breach of Confidentiality
 3 to 8 yrs
 fine of not less than five hundred thousand pesos (Php500,OOO.OO) but not more than one
million pesos (Php1,OOO,OOO.OO)
 In case of a breach of confidentiality that is published or reported by the media, the
responsible reporter, writer, president, publisher, manager and editor-inchief shall be
liable under the AM LA.
F. Criminal Liability of Corporate Entities
If the offender is a corporate entity, the penalties herein shall be imposed upon the responsible
officers who participated in, or allowed by their gross negligence the commission of the crime;
and/or directors or trustees who willfully and knowingly voted for or assented to violate the AMLA,
this RIRR, or other AMLC issuances.