COMMERCIAL LAW REVIEWER

SAINT LOUIS UNIVERSITY BAR OPERATIONS

ANTI-MONEY LAUNDERING ACT

(R.A. 9160)
Anti-Money Laundering
- A crime whereby the proceeds of an unlawful
activity are translated thereby making them
appear to have originated from legitimate
sources.

Purposes:
1. integrity & confidentiality of bank accounts shall be
protected and preserved
2. Ensure that the Philippines shall not be used as a money
laundering site for the proceeds of any unlawful activity.
3. Philippines shall not extend cooperation in transnational
and prosecutions of persons involved in money laundering
activities wherever committed.

Three stages:
1. Placement/infusion
- physical and actual delivery of cash proceeds
that originated from an illegal activity such as:
a. smuggling of bulk currency
b. illegal-sourced money with legitimate deposits
c. cash deposits in small denominations
d. cash deposits with several banks
2.

3.

Layering
- Process of separating the illicit proceeds from
their source by creating "layers" of transactions
with the end in view of disguising the source and
make it appear as insignificant.

Integration
- Layered accounts are then re-introduced into the
economy under the stamp of legitimacy; through
the re-entry into the financial system it would
appear that the laundered money is normal or
legitimate business funds.

DEFINITIONS
transaction
- any act establishing any right or obligation or
giving rise to any contractual or legal relationship
between the parties; includes any movement or
activity concerning funds by any means with a
covered institution
proceeds
- Amount taken from an unlawful activity; includes
material results, profits, effect and any amount
realized from any illegal activity.
- All monetary, financial or economic means,
documents, papers, things or devices used in
having or having any relation to any unlawful
activity and all moneys, expenditures, payments,
disbursements, costs, outlays, charges, accounts
for the financing operations and maintenance of
any illegal activity.
monetary instrument
- coins, currency of legal tender in the Philippines,
or of any other country
- drafts, checks and notes

securities or negotiable instruments, bonds,

commercial papers, deposit certificates, trust
certificates, custodial receipts or deposit
substitute instruments, trading orders, transaction
tickets and confirmation of sale or investments
and money market instruments

client
-

any person or corporate entity that maintains an

account or transacts business with any financial
institution on whose behalf an account is
maintained or a transaction is conducted, as well
as the beneficiary of said transaction.
suspicious transaction
- one that merits closer examination, in order to
verify that it is from a legitimate source such as
a. no underlying legal/trade obligation
b. client is not properly identified
c. amount involved is not commensurate with the
business or financial capacity of the client
d. client's transaction is structured in order to avoid
being the subject of reporting requirements
e. 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 institution
f. transaction is in a way related to an unlawful
activity under this Act that is about to be, is being
or has been committed
g. Any transaction that is similar OR ANALOGOUS
to any of the foregoing.
unlawful activities
a. drug trafficking or violation of RA No. 9165
(Comprehensive Dangerous Act of 2002)
b. kidnap for ransom
c. anti-graft and corrupt practices act
d. plunder
e. robbery and extortion
f. jueteng and masiao ( illegal gambling)
g. piracy on the high seas
h. qualified theft
i. swindling
j. smuggling (under RPC and RA Nos. 455 &1937)
k. violations of E-commerce Act of 2000
l. hijacking
covered institutions
- banks, non-banks, quasi-banks, trust entities
- insurance companies
- those supervised by SEC
threshold
- Highest/significant level of deposit or placement
an account may reach on a transactional basis.
covered transaction
- Transaction in cash or other equivalent monetary
instrument involving a total amount in excess of
P500, 000.00 within one banking day.

ANTI-MONEY LAUNDERING COUNCIL (AMLC)

Composition:
1. Governor of Bangko Sentral ng Pilipinas as Chairman
2. Insurance Commissioner
3. Chairman of Security & Exchange Commissioner

Prepared by the COMMERCIAL LAW SECTION Chief MARLON CORPUZ Assistant Chief MA. LOURDES COMTIAG Members MARLON
BACUNO, VOLTAIRE GARCIA, JEANNYLENE ISIP, BEVERLY MANZANO, KATHRYN BOLINAS, LOTTA OBADO, GRESIL SANTOS
and VENUS DUGAYON. All Rights Reserved by the SAINT LOUIS UNIVERSITY COLLEGE OF LAW BAR OPERATIONS 2003.

 COMMERCIAL LAW REVIEWER

SAINT LOUIS UNIVERSITY BAR OPERATIONS

@AMLC is a collegial body where Chairman & members of

AMLC are entitled to one vote each

General Rule:
Members of AMLC, Executive Director, all members of
Secretariat, on detail, on secondment shall not reveal in any
manner any information by reason of their office
Exception:
Under any orders of the court, Congress, or any government
offices authorized by law
@MEETING:
AMLC shall meet every first Monday of the month or as often as
may be necessary at the call of Chairman
- through modern technologies such as, but not
limited
to
TELECONFERENCING
&
VIDEOCONFERENING
@BUDGET: appropriated by Congress
- Used to defray operational expenses, including indemnification
for LEGAL COST & EXPENSES.
Functions:
1. To require and receive covered or suspicious transaction
reports from covered institution
2. all covered transactions and suspicious transactions shall
be reported to AMLC within 5 working days from
occurrence thereof, unless the Supervising Authority
prescribes a longer period not exceeding 10 working days.
3. To issue orders addressed to the appropriate supervising
authority or the covered institution 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
4. To institute civil forfeiture proceedings and all other
remedial proceedings through the Office of the Solicitor
General

payment in lieu of forfeiture

any particular money cannot, with due diligence,
be located
b. substantially alleged, destroyed, diminished in
value
c. concealed, removed to prevent the same from
being found
d. located outside the Philippines
e. place or brought outside the jurisdiction of the
court
f. Commingled with other monetary instruments or
property belonging to either the offender himself
or third person.
To cause the filing of complaints with the Department of
Justice or the Ombudsman for the prosecution of money
laundering offenses
To investigate suspicious transactions deemed suspicious
after an investigation by the AMLC, money laundering
activities, and other violations of this Act
To apply before the Court of Appeals, ex parte, for the
freezing of any monetary instrument or property alleged to
be the proceeds of any unlawful activity
- effective immediately upon determination of
probable cause
- shall be for a period of 20 days unless extended
by the court
To implement such measures as may be necessary and
justified under the law to counteract money laundering
To receive and take action in respect to any request from
foreign states for assistance in their own anti-money
laundering operations
- through conventions, resolutions & other
directives of any organizations of which
Philippines is a member. HOWEVER, AMLC may
refuse to comply with such request, when:
a. it contravenes provision of Constitution
b. it prejudices national interest of the Philippines
a.

General Rule:
AMLC acts unanimously in discharge of functions
Exception:
In case of incapacity, absence or disability, any member to
discharge his functions, the officer designated shall act in his
stead.
SECRETARIAT
- Headed by Exec. Director,, appointed by AMLC
for a term of % years
- qualifications:
a. member of Phil. Bar
b. at least 35 years of age
c. of good moral character
d. with unquestionable integrity & known probity
e. Must have served for at least 5 years in
Insurance Commission, SEC or BSP & shall hold
full-time permanent position within the BSP.

the Revised Penal code shall apply when the

court ordered for the seizure of any monetary
instrument or property, in whole or in part,
directly or indirectly

5.
6.
7.

8.
9.

requirements for requests for mutual assistance

from foreign sates:
a. investigation/prosecution
b. grounds
c. identity of said person
d. covered institution believed to have been any
information which may be of assistance to the
investigation
e. all particulars necessary for the issuance of the
order/processes
f. other information
10. To develop educational programs on the pernicious effects
of money laundering, the methods and techniques used in
money laundering, the viable means of preventing money
laundering and the effective ways of prosecuting and
punishing offender
- through nationwide information campaigns
- to heighten awareness of the public of their civic
duty
11. 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,
-

Prepared by the COMMERCIAL LAW SECTION Chief MARLON CORPUZ Assistant Chief MA. LOURDES COMTIAG Members MARLON
BACUNO, VOLTAIRE GARCIA, JEANNYLENE ISIP, BEVERLY MANZANO, KATHRYN BOLINAS, LOTTA OBADO, GRESIL SANTOS
and VENUS DUGAYON. All Rights Reserved by the SAINT LOUIS UNIVERSITY COLLEGE OF LAW BAR OPERATIONS 2003.

 COMMERCIAL LAW REVIEWER

SAINT LOUIS UNIVERSITY BAR OPERATIONS

which may include the use of its personnel, facilities and

resources for the more resolute prevention, detection and
investigation of money laundering offense and prosecution
of offenders
12. To impose administrative sanctions for the violation of
laws, rules, regulations and orders and resolutions
Scope of authority of the AMLC to inquire into bank
deposits;
- inquire into or examine any particular deposit or
investment with any banking institution or nonbank financial institution upon order of any
competent court in cases of violation of the law,
when it has been established that there is
probable cause that the deposits or investments
are related to an unlawful activity or a money
laundering offense except that no court is needed
for cases qualified by the law.
Effect when freeze orders are ordered by the AMLC with the
passage of RA 9194:
- Shall remain in force for a period of 30 days after
the affectivity of RA 9194, UNLESS extended by
the Court of Appeals.
Offenses and their respective penalties:
1.) Crime of money laundering
1. knowledge that any monetary instrument or
property represents, involved or relates the
proceeds of any unlawful activity, transact or
attempts to transact said monetary instrument or
property
- 7-14 years; not less than 3M and not more than
twice the value of monetary instrument or
property involved in the offense
2.

3.

knowledge that any monetary instrument or

property involves proceeds of any unlawful
activity, performs or fails to perform any act as a
result of which he facilitates the offense of
money laundering
4-7 years; not less than 1.5M but not more than
3M
Knowledge that any monetary instrument or
instrument is required to be disclosed and files
with AMLC fails to do so.
6 mos.-4 years; not less than 100,000.00 but not
more than 500,000.00, or both.

2.) Failure to keep records

- 6 mos -1 year; not less than 100,000.00 but not
more than 500,000.00, or both
3.) Failure to report covered transactions
- 6 mos-4 years; not less than 100,000.00 but not
more than 500,000.00, or both
4.) 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
6 mos-4 years; not less than100,000.00 but not
more than 500,000.00 at the discretion of the
court, Provided, the offender is not entitled to
avail of the benefits of the Probation Law

if offender is a corporation (who participated in the

commission or shall have knowingly permitted or failed to
prevent its participation)
- penalty shall be imposed upon the responsible
officers

if offender is a juridical person

- penalty: revocation of license

if offender is an alien
- penalty: 6 mos-4 years; not less than 100,000.00
but not more than 500,000.00, at discretion of the
court, and Deportation

if offender is a public official/employee

- penalty: 6 mos-4 years; not less than 100,000.00
but not more than 500,000.00 AND
Perpetual/Temporary Disqualification

5.) Breach of 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
- 3-8 years; not less than 500,000.00 but not more
than 1M
Jurisdiction of Money Laundering cases:
RTC - all cases on money laundering
Sandiganbayan - acts/omissions by public officers and private
persons who are in conspiracy with such public officers
Prosecution of money laundering
1. any person maybe charged with & convicted of both the
offense of money laundering & unlawful activity
2. any proceeding relating to unlawful activity shall be given
precedence over the prosecution of any offense or violation
without prejudice to the freezing order & other remedies
3. knowledge of offender that monetary instrument relates to
proceeds of unlawful activity shall be established by
DIRECT EVIDENCE or inferred from attendant
circumstances
4. No case of money laundering may be filed to the prejudice
of a candidate for an electoral office during an election
period. HOWEVER, this prohibition shall not constitute a
bar to the prosecution of any money laundering case filed
in court before the election period.
5. AMLC may apply for provisional remedies to prevent
monetary instrument or property subject thereof from being
removed, concealed, and converted with other
organizations where there is conviction for money
laundering; the court shall issue judgment of forfeiture in
favor of government of Philippines. HOWEVER, no asset
shall be forfeited to the prejudice of a candidate for an
electoral office during an election period.
6. Restitution for any aggrieved party
Prevention of Money Laundering

Prepared by the COMMERCIAL LAW SECTION Chief MARLON CORPUZ Assistant Chief MA. LOURDES COMTIAG Members MARLON
BACUNO, VOLTAIRE GARCIA, JEANNYLENE ISIP, BEVERLY MANZANO, KATHRYN BOLINAS, LOTTA OBADO, GRESIL SANTOS
and VENUS DUGAYON. All Rights Reserved by the SAINT LOUIS UNIVERSITY COLLEGE OF LAW BAR OPERATIONS 2003.

4
1.

COMMERCIAL LAW REVIEWER

SAINT LOUIS UNIVERSITY BAR OPERATIONS

Customer Identification requirement

- the ff. minimum documents shall be obtained for
Individual customers:
a. name
b. present address
c. date & place of birth
d. nationality
e. nature of work and name of employer or nature
of self-employment/business
f. tax identification number, SSS, GSIS number
g. specimen signature
h. source of funds
i. names of beneficiaries in case of insurance
contracts and whenever applicable
for Corporate and Juridical entities:
articles of incorporation/partnership
by-laws
list of directors/partners
list of principal stockholders owning at least 2%
of the capital stock
e. contact numbers
f. beneficial owners, if any
g. verification of the authority and identification of
the person purporting to act on behalf of the
client
Recordkeeping Requirements
existing and new accounts
- shall be maintained and stored for 5 years from
Oct 17, 2001 from the dates of the accounts or
transactions whichever is later
closed accounts
- shall be preserved and safely stored for at least 5
years from the dates when they were closed
records in case a money laundering case has been filed in
court
- Said file must be retained beyond the period
stipulated in the two preceding subsections, as
the case may be until it is confirmed that case
has finally resolved or terminated by the court.
a.
b.
c.
d.

2.
a.

b.
c.

Key Elements in Fighting Money Laundering

1. The criminalization of money laundering
2. Institution of a system of suspicious transactions
3. Relaxing of bank secrecy laws
4. Creation of an anti-money laundering council or task force
5. Institution of procedures for effective international
cooperation

Prepared by the COMMERCIAL LAW SECTION Chief MARLON CORPUZ Assistant Chief MA. LOURDES COMTIAG Members MARLON
BACUNO, VOLTAIRE GARCIA, JEANNYLENE ISIP, BEVERLY MANZANO, KATHRYN BOLINAS, LOTTA OBADO, GRESIL SANTOS
and VENUS DUGAYON. All Rights Reserved by the SAINT LOUIS UNIVERSITY COLLEGE OF LAW BAR OPERATIONS 2003.