COLLEGE OF ACCOUNTANCY AND BUSINESS ADMINISTRATION

ANTI-MONEY LAUNDERING ACT

(RA No. 9160, as amended by RA 9194, 10167, 10365, 10927 and 11521)

A. Policy:
1. Protect and preserve the confidentiality and integrity of bank accounts;
2. Ensure that the Philippines shall not be used as a money laundering site for the proceeds of any unlawful
activity; and
3. Extend cooperation in transnational investigations and prosecutions of persons involved in money
laundering activities wherever committed.

B. Definition of Money Laundering

Money laundering is a derivative offense. It is a crime by which the proceeds of unlawful activities are
transacted to make them appear to have come from legal purposes.

C. Stages of Money Laundering

1. Placement – It puts the “dirty money” into the legitimate financial system.
2. Layering – It conceals the source of the money through a series of transactions and bookkeeping tricks.
3. Integration – It is the final steps, the now-laundered money is withdrawn from the legitimate account to be
used for whatever purposes the criminals have in mind for it.

D. Elements of Money Laundering

1. There must be an unlawful activity;
2. There must be monetary instrument/property;
3. There must be attempted or consummated transaction of a money or instrument; and
4. There must be knowledge that the monetary instrument or property represents, involves or relates to the
proceeds of any unlawful activity.

D.1 Unlawful Activities:

1. Kidnapping for Ransom
2. Comprehensive Dangerous Drugs Act of 2002
3. Hijacking, Destructive Arson and Murder
4. Terrorism and Conspiracy to Commit Terrorism; and
5. Felonies or offenses of a similar nature.

D.2 Monetary Instrument or Property

Monetary instrument or property related to an unlawful activity refers to: all proceeds of an unlawful activity;
all monetary, financial or economic means, devises, accounts, documents, papers, items, or things used in or
having any relation to any unlawful activity; and all money, expenditures, payments, disbursements, outlays,
charges, accounts, refunds and other similar items for the financing, operations and maintenance of any unlawful
activity.

D3. How do you establish knowledge?

Knowledge may be established by direct evidence or inferred from the attendant circumstances (Rule 6c,
AMLC Revised Implementing Rules and Regulations)

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E. Preventive Measures
1. Transaction Report
2. Record Keeping
3. Customer Identification

E.1. Transaction Report (TR)

Classification of TR
a. Covered Transaction Report (CTR)
i. In general – a covered transaction involving cash or other equivalent monetary instrument in an
amount in excess of P500,000.00 within one banking day;
ii. Casinos – a covered transaction involving a single casino cash transaction in an amount in excess of
P5,000,000 or its equivalent in any other currency;
iii. Jewelry dealers in precious metals and stones – a transaction in cash or other equivalent monetary
instrument in an amount exceeding P1,000,000.00 whether a single or multiple transaction;
iv. Real estate transactions – the LRA and all its Registries of Deeds should submit to AMLC all real
estate transactions involving an amount in excess of P500,000.00 within 15 days from the date of
registration of the transaction.

b. Suspicious Transaction Report (STR)

i. There is no underlying legal or trade obligation, purpose or economic justification;
ii. Client is not properly identified;
iii. Amount involved is not commensurate with the business or financial capacity of the client;
iv. Taking into account all known circumstances, it may be perceived that the client’s transaction is
structured to avoid being the subject of reporting requirements under the Act;
v. 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;
vi. The transaction is in any way related to an unlawful activity or offense under this Act that is about to
be, is being or has been committed; or
vii. Any transaction that is similar or analogous to any of the foregoing.

Notes:
1. Covered persons shall report to the AMLC all covered transactions and suspicious transaction with five
working days, unless the AMLC prescribes a different period not exceeding 15 working days, from the
occurrence thereof.
2. No liability in reporting covered and suspicious transactions.
3. When reporting covered or suspicious transactions to the AMLC, covered institutions and their officers and
employees shall not be deemed to have violated: 1. The Law on Secrecy of Bank Deposits or Ra 1405,
as amended; 2. Foreign Currency Deposit Act or RA No. 6426, as amended, 3. General Banking Laws or
RA 8791; and 4. Other similar laws.
4. If the reporting is done by any person in the regular performance of his duties in good faith, no
administrative, criminal or civil proceedings shall lie against said person, whether or not such reporting
results in any criminal prosecution under this Act of any other law (Safe harbor provision).

E.2. Record Keeping (RK)

a. In general – Covered persons shall maintain and safely store for 5 years from the dates of transactions all
records of customer identification and transaction documents.
b. Court case – If a case has been filed in court involving the account and casino video footage, records must
be retained and safely kept beyond the 5-year period, until it is officially confirmed by the AMLC Secretariat
that the case has been resolved, decided or terminated with finality.
c. Closed Accounts – Covered person shall maintain and safely store for at least 5 years from the dates the
accounts were closed, all records of customer identification and transaction documents.

E.3. Customer Identification (CI)

a. Know Your Customer – It is a process observed by covered persons to establish and record the true
identity of its clients based on official documents;
b. Establish and record the true identity of its clients based on official documents;
c. Maintain a system of verifying the true identity of their clients; and
d. In case of corporate clients, require a system of verifying their legal existence and organizational structure,
as well as the authority and identification of all persons purporting to act on their behalf

F. Covered Persons
Covered persons are any natural or juridical persons that are bound to comply with the provisions of the
Anti-Money Laundering Act (AMLA). The covered persons are:
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 Bangko Sentral ng Pilipinas (BSP);

2. Insurance companies, pre-need companies and all other persons supervised or regulated by the
Insurance Commission (IC);

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 3. Securities dealers, brokers, salesmen, investment houses and other similar persons 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 and
other similar monetary instruments or property supervised or regulated by the Securities and Exchange
Commission (SEC);

4. Jewelry dealers in precious metals, who, as a business, trade in precious metals, for transactions in excess
of One million pesos (P1,000,000.00);

5. Jewelry dealers in precious stones, who, as a business, trade in precious stones, for transactions in excess
of One million pesos (P1,000,000.00);

6. Company service providers which, as a business, provide any of the following services to third parties:
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 juridical 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;

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 or management of companies; and
d) Creation, operation or management of juridical persons or arrangements, and buying and selling
business entities;

8. Casinos, including internet and ship-based casinos, with respect to their casino cash transactions related to
their gaming operations;

9. Real estate developers and brokers who engage in the buying and selling of real estate properties; and

10. Philippine offshore gaming operators and their service providers.

G. Anti-Money Laundering Council (AMLC)

The AMLC is composed of three members, viz:
1. Governor of BSP as Chairman;
2. Commissioner of the Insurance Commission as member; and
3. Commissioner of the Securities and Exchange Commission, as member.

The AMLC Secretariat is the operating arm of the AMLC headed by the Executive Director.

H. Powers of the Anti-Money Laundering Council

1. To cause the filing of complaints with the Department of Justice or the Ombudsman for the prosecution of
money laundering offenses;
2. Institute civil forfeiture proceedings and all other remedial proceedings through the Office of the Solicitor
General;
3. To investigate suspicious transactions and covered transactions deemed suspicious after an investigation
by AMLC, money laundering activities and other violations of this Act;
4. To apply before the Court of Appeals, 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 Section 3(i) hereof;
5. To require and receive covered or suspicious transaction reports from covered institutions;
6. To issue orders addressed to the 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 for 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;
7. To implement such measures as may be necessary and justified under this Act to counteract money
laundering;
8. To receive and take action in respect of, any request from foreign states for assistance in their own anti-
money laundering operations provided in this Act;
9. To develop educational programs on the pernicious effects of money laundering, the methods and
techniques used in the money laundering, the viable means of preventing money laundering and the
effective ways of prosecuting and punishing 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
antimoney laundering operations, which may include the use of its personnel, facilities and resources for
the more resolute prevention, detection, and investigation of money laundering offenses and prosecution
of offenders;
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 11. To impose administrative sanctions for the violation of laws, rules, regulations, and orders and resolutions
issued pursuant thereto; and
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
(P500,000.00) 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.

I. Persons liable for Money Laundering

Any person or any person employed with a covered person.

M. Jurisdiction of Money Laundering

The RTC shall have jurisdiction to try all cases on money laundering. Those committed by public officers
and private persons who are in conspiracy with such public officers shall be under the jurisdiction of the Sandigan
Bayan.