RFBT:

Special Topics
MATALUBOS, REYDEN MEIR.
BS ACCOUNTANCY 4
1. Anti-Money Laundering Law
(AMLA) – R.A. 9160
 Declaration of Policy
 It is hereby declared the policy of the state to protect and
preserve the integrity and confidentiality of bank accounts and
to ensure that the Philippines shall not be used as a money
laundering site for the proceeds of any unlawful activity.
 Definition
 Money Laundering – is committed by any person who knowingly
that any monetary instrument or property represents, involves, or
relates to the proceeds of any unlawful activity.
I. Covered Transactions
 A transaction in cash or other equivalent monetary
instrument exceeding Five Hundred Thousand pesos (Php
500,000.00).
 A transaction exceeding One Miliion pesos (Php
1,000,000.00) in cases of jewelry dealers in precious meatals
and dealers in precious stones.
II. Suspicious Transactions
 1.) No underlying legal or trade obligation or economic
justification
 2.) The client is not properly identified
 3.) The amount involved is not commensurate with
business financial capacity
  4.) the transaction is structured to avoid being the
subject of reporting requirements in AMLA.
 5.) Transactions which is observed to deviate from the
profile of the client
 6.) Any transactions that is similar , analogous or identical
to any of the foregoing.
III. Covered persons required to report AMLC
 1. ) Banks , Pawnshops, Money Changers, Remittance
Centers, and all other entity regulated by BSP.
 2.) Insurance Companies, Holdings, Insurance Brokers
and other entity regulated by Insurance Commissions.
 3.)Securities Dealers , brokers, salesmen, investment
houses, and other entity regulated by SEC.
IV. Persons excluded to report
transactions to AMLC
 1. Lawyers, if acting as independent legal professionals
in relation to its client.
 2. Certified Public Accountants, if acting as independent
legal professionals in relation to its client.
V. Transaction Reporting
 Covered persons shall report to the AMLC all covered
transactions and suspicious transactions within five (5)
working days , unless the AMLC prescribes any period
not exceeding fifteen (15) working days from
occurrence (date discovery not date of transaction)
VI. Freeze Order
 The Court of Appeals may issue a freeze order which shall be
effective immediately and shall not exceed six (6) months .
 Notwithstanding with R.A. 1405, AMLC may inquire or
examine any particular deposit or account upon order of
Court of Appels based on exparte application.
VII. Can AMLC may inquire into bank account without court
order ?
 Predicate crimes may authorize AMLC to inquire bank accounts
even without Court order from Court of Appeals such as the ff.:
 1. Kidnapping for Ransom
 2. R.A. 9165
 3. Hijacking, destructive arson, murder
 4. Felonies
 5. Terrorism, Financing and conspiracy to commit terrorism.
QUIZ
 1. Which of the following is a covered person, therefore required to
report to AMLC reportable or suspicious transactions.
 A. Stock Brokers
 B. Lawyers acting as independent legal counsel
 C. CPA, acting as independent external auditor
 D. None of the Above
 ANSWER: A. Stock Brokers
 2. Quasi banks , insurance agents , dealers of securities and brokers
are not required to report to AMLC any suspicious transactions since
they are covered persons to report.
 FALSE. They are required.
 3. Regional Trial Court shall have the jurisdiction of money
laundering cases committed by public officers.
 False. Sandiganbayan have jurisdiction in this case.
2. Financial Rehabilitation and
Insolvency Act (FRIA) – R.A. 10142
 Definition of Insolvency
 Insolvency shall refer to (1) the financial condition of the debtor
that is generally unable to pay its liabilities as they fall due in the
ordinary course of business or (2) financial condition of a debtor
when he has liabilities greater than his assets.

I. Suspension of Payments
 An individual debtor who has sufficient property to cover all his
debts but foresees the impossibility of meeting them may file a
petition that he should be declared in the State of Suspension of
Payments by the court of the city or province attaching his
 1. Schedule of Debts and Liabilities 2. Inventory of Assets
 3. Proposed agreement with Creditors
I.A. Effect of Suspension of payments
 1.) Creditors will be called for meeting and be directed to
present written evidence of their claims.
 2.) Publication, within 7 days from issuance of order, in a
newspaper in general circulation once a week for two
consecutive week,.
 3.) Forbidding the individual debtor from disposing of his
property and making any payment outside of the necessary
expenses.
 4.) The creditor cannot sue to collect claims from debtor
except for the secured creditors (secured property are not
subject to suspension order.
 5.) The order shall lapse when three (3) months have passed,
no proposed agreement have been accepted or such is
denied.
I.B. Approval and Rejection of Suspension Order
 1. The presence of creditors holding at least three-fifths (3/5) of
the liabilities shall constitute a quorum for approval of order.
 2. Double Majority Rule: To approve the proposal of insolvent
debtor the vote of a.) at least 2/3 of the creditors are required
and b.) the claims represented by said majority constitute at
least 3/5 of the total liabilities of the debtor.
 3. The proposed agreement is deemed rejected when the
quorum for meeting was not met or if it was met, double
majorities for the approval of proposed agreement have not
been met achieved.
 4.) If approved, the court shall order that the agreement shall
be carried and creditors shall be bound by its terms.
 5.) If rejected , all rights which the creditors had before the order
shall revert to them and the creditor may be made subject to
the insolvency proceedings established by this act.
II. Voluntary Liquidation by Insolvent
Individual Debtor
 Voluntary Liquidation is initiated by the debtor itself. An
individual debtor whose properties are not sufficient to
cover his liabilities and owing debts exceeding Five
Hundred Thousand pesos (Php 500,000.00) , may apply
to be discharged from his debts by filling a petition with
the court of the province he resided by attaching
 a.) schedule of his debts and liabilities and
 b.) inventory of his assets.
 If the court finds the petition sufficient in form and
substance, it shall issue the Liquidation Order within five
(5) working days.
III. Involuntary Liquidation by Insolvent Debtor
 This application is initiated by any creditor or group of
creditors with a claim , or with claims aggregating at least Five
Hundred thousand pesos (Php 500,000.00) may file a verified
petition for liquidation with court of the province or city in
which the individual debtor resides.
iii.1. Acts of Insolvency which must be alleged by the creditors
in the petition
 1. The creditor is about to depart or being absent with intent to defraud his creditors
 2. That he conceals himself to avoid the service of legal process or is removing any of
his property to avoid being attached on legal process.
 3. That he has suffered his property for purpose of hindering or delaying the liquidation.
 4. That he has transferred by gift, sale, assignment grant or transfer to his estate his
properties in contemplation of insolvency.
 5. That being a tradesman, he has generally defaulted in the payment of his
obligations for a period of (30) days.
iii.2. Effects of Involuntary Liquidation
 Upon filling such creditor’s petition, the court shall issue a
Show Cause order requiring the individual debtor to
show cause, at a time any place fixed by the court, why
he should not be adjudged an insolvent.
 Upon showing of good cause, the court may issue Order
forbidding the individual debtors from making any
payments of any debts and transferring his property. This
order shall not impair the rights of a secured creditor to
enforce his lien.
 If after trial , the issues are found in favor of creditors , the
court shall issue the Liquidation Order.
IV. Corporate Rehabilitation
 Definition of Terms
 Rehabilitation shall refer to the restoration of the debtor to a
condition of successful operation and solvency, if it was shown
that its continuance of operation is economically feasible and its
creditors can recover by way of the present payments projected
in the plan, more if the debtor continues as a going concern
than if it is immediately liquidated.
 Rehabilitation Plan shall refer to any plan by which the financial
well-being and viability of an insolvent debtor can be restored
using various means such as Debt forgiveness, debt restructuring,
reorganization, dacion en pago and sale of business or setting
up a new business or other similar arrangements as may be
approved by the court or creditors.
IV.1. Court-Supervised Rehabilitation
 1. Voluntary Court-Supervised Rehabilitation
 Must approved by the owner or by majority of the partners or
majority of BOD , authorized by stockholder rep. 2/3 outstanding
capital stock.
 GROUNDS
 1. The debtor is generally unable to pay its or his liabilities as they
fall due in ordinary course of business
 2. The debtor has liabilities that are greater than his assets
 2. Involuntary Court supervised Rehabilitation
 Any group of creditors with a claim of aggregate of at least One
Million Pesos (Php 1,000,000.00) or at least 25% of the subscribed
capital or partners contribution , may initiate involuntary
proceedings against the debtor by filing petition for
rehabilitation.
IV.2. Court Action on Petition for
Rehabilitation
 If the court finds the petition for rehabilitation to be
sufficient in form and substance , it shall issue a
Commencement Order within 5 working days from filling
of petition. The rehabilitation proceeding shall
commence upon the issuance of the Commencement
Order.
 The rehabilitation proceedings of an insolvent debtor
shall commence upon issuance by the rehabilitation
court of Commencement order which shall include
among other a Stay order or suspension order.
IV.3. Effects of Issuance by Rehabilitation
court of stay or suspension order
 It shall suspend all actions or proceedings for the
enforcement of claims against the debtor.
 It shall suspend all actions to enforce any judgement ,
attachment or other provisional remedies against the
debotor.
 It shall prohibit the debtor from alienating his property.
 It shall prohibit the debtor from making any payment ,
except for the right of a secured creditor which would
not be impair by this act.
Approval of the Rehabilitation Plan
 The plan shall be deemed rejected unless approved by all
classes of creditors whose right are adversely modified or
affected by the plan.
 The plan is said to be deemed approved by class of creditors
if members of said class holding more than fifty (50%) of the
total claims of said class vote for its favor.

Other types of Rehabilitation

 1. Pre-negotiated Rehabilitation
 2. Out-of-Court
QUIZ (True or false)
 An individual debtor who possess insufficient property to cover all his
debts and foresees the impossibility of meeting them may file a
petition that he be declared in the state of suspension of payments.
 False. “sufficient”
 The Involuntary rehabilitation must be approved by the owner in
case of sole business, majority of partners in case of partnership and
majority vote of BOD and authorized vote stockholders representing
2/3 of OC.
 False. Voluntary Rehabilitation
 Besh Corp has total 1.5M worth of debt to A,B,C,D,E and F (each
has collectible of Php 250,000 to Besh Corp). After having acquired
evidence which is a valid ground, A, B and C can initiate for
involuntary proceedings by filing a petition for rehabilitation.
 False. The aggregate debts of A , B, and C is only 750,000 (the 1m
threshold was not met.)
3. Intellectual Property – R.A. 8293
 I. LAW ON PATENTS
 Patents is a exclusive right granted for product , process or
an improvement of a product or process which is new,
inventive and useful. This exclusive rights gives the creditor
the right to exclude others from making, using, or selling the
product invention during the life of patents.
 MODES OF CREATION
 It must be registered with IPO to be protected by law.
 TERM OF PATENTS
 A patent has a term of protection for 20 years providing an
investor significant commercial gain.
Requisites of Patentable Inventions
 1. It must be a technical solution to a problem in any field of human
activity.
 2. It must be new (novelty). An invention is not considered new if it
forms part of the prior art.
 3. It must involve an inventive step. An invention involves an
inventive step when , having regard with prior art , it is not obvious to
a person skilled in the art at the time of filing.
 4. It must be industrially applicable, meaning it can be produced
and used in any industry.
Non-Patentable Inventions
 1. Discoveries, scientific theories and mathematical methods.
 2. Schemes , rules and methods of performing mental acts, playing
games or doing business and programs for computers.
 3. Method for treatment of the human or animal body by surgery or
therapy.
 4. Aesthetic Creations
 5. Anything which is contrary to public order or morality.
 FIRST TO FILE RULE
 If two or more persons have made the invention separately and
independently of each other, the right to the patent shall belong
to the person who filed an application for the same invention
first.

 TEST OF PATENT INFRINGEMENT

 1. Literal Infringement – The court must juxtapose the claims of
the patent and the accused product within the overall context
of the claims and specifications, to determine whether there is
exact identity of all material elements.
 2. Doctrine of Equivalent infringement- Infringement also takes
place when a device appropriates a prior invention by
incorporating its innovative concept and although some
modification and change, it performs substantially the same
function in the same with same results.
II. The on Trademarks and Trade
Names
 DEEINITION
 Trademark – visible sign capable of distinguishing the
goods of an enterprise and shall include a stamped or
marked container of services.
 MODES OF CREATION OF RIGHT
 Trademarks, service mark and collective mark must be
registered with IPO to be protected by law while trade
name need not to be registered.
 TERMS OF TRADEMARK AND SERVICE MARK
 It has a term of 10 years but subject to unlimited renewal .
Therefore it has indefinite life.
Test of Trademark Infringement
 1. Dominancy Test – Infringement takes place when the
competing trademark contains the essential features of
another . Imitation or an effort to imitate is unnecessary.
The question is whether the use of the marks is likely to
cause confusion or deceive purchase.
 2. Holistic Test – it considers the entirety of the marks ,
including labels and packaging , in determining
confusing similarity . The focus is not only on the
predominant words but also on other features
appearing on the labels.
III. The Law on Copyright
 COPYRIGHT – It is a legal protection extended to the
owner of the rights in an original work.
 MODE OF CREATION A RIGHT – From the moment of
creation without the need or form of expression. Works
are protected by sole fact of their creation , irrespective
of their mode or form of expression.
 TERM OF COPYRIGHT – The term of protection of
copyright for original and derivative works is the life of
the author plus (50) years after his death. The terms shall
begin on the first day of January of subsequent year
following the death.
Infringement of Copyright
 It consist in infringing any right secured or protected
under the code. It may also consist in aiding or abetting
such infringement. The law also provides for the liability of
a person who at the time when copyright subsists in a
work, he know or ought to know , the infringing copy of
the work for the purpose of
 1. Selling or exposing the work for trade
 2. Distributing the article for the purpose of trade to the
prejudice the rights of the copyright owner.
 3. Trade exhibit of the article in public.
QUIZ

 The first to file rule is also applicable for registration of trademarks

and copyrights.
 False. There’s no such thing
 The court founds out that the entire trademarks of JOLLYME Products
including the packaging , labelling and business structure are very
similar to registered trademarks of JOLLIBEE. Neneng, a loyal
customer of JOLLIBEE even confused with two fast foods that she
unintentionally had dined in at JOLLYME . A holistic test had aided
the court to test the infringement.
 True.
Philippine Deposit Insurance
Corporation Law (R.A. 10846)
 PDIC is a government instrumentality created by bvirtue
of this act to insure the deposits of all banks which are
entitle to the benefits of the insurance.
 INURABLE DEPOSITS
 1. Savings Deposit
 2. Special Savings
 3. Demand/ Checking Account
 4. Certificate of Time Deposits
 5. Negotiable Order of Withdrawal
 MAXIMUM DEPOSIT INSUARNCE COVERAGE
 PDIC shall pay deposit insurance on all valid deposits up to
the maximum deposit insurance coverage of Php 500,000
per depositor of a closed bank.
 If a depositor has single accounts and joint accounts , the
insured deposits is up to Php 1,000,000.00
 PERIOD OF FILLING
 Deposits have two (2) years from PDIC’s takeover of
the closed bank to file their deposit insurance claims.
LAW ON BANK SECRECY – R.A. 1405
 All deposits of whatever nature in banks or banking institutions
in the Philippines and investment in government bonds are
absolutely confidential.
 Confidentially of the domestic bank deposits is not absolute
under exceptions of R.A. 1505, AMLC, criminal laws, etc.

FOREIGN CURRENCY DEPOSIT ACT –

R.A. 6426
 All foreign currency deposits are absolutely confidential
and cannot be examined.
 Foreign currency deposits are also exempt from
attachment , garnishment or any other order or process
of any court.
General Banking Law – R.A. 8791
 SINGLE BORROWERS LIMIT (SBL)
 The total amount of loans , credit accommodations and
guarantees may be extended by a bank to any person,
partnership or corporation shall not exceeded twenty percent
(20%) of the net worth of such bank.
 ADDITIONAL LIMIT OF LOAN
 The total amount of loans , credit accommodations and
guarantees may be increased by additional by an additional ten
percent (10%) of the net worth of such bank.
 DILIGENCE REQUIRED BY LAW TO BE OBSERVED BY BANKS
 For demand deposits , savings , time deposit – HIGH STANDARD
OF INTEGRITY OR EXTRA-ORDINARY DILIGENCE.
 For other services – DILIGENCE OF A GOOD FATHER OF FAMILY.
Conservatorship of Banks
 GROUNDS FOR PLACING A BANK UNDER
CONSERVATORSHIP
 The monetary board finds that a bank or quasi-bank is in
the state of continuing inability or unwillingness to maintain
a condition of liquidity deemed adequate to protect the
interest of the depositors.
 PERIOD – The conservatorship shall not exceed one (1)
year.
BANK RECEIVERSHIP
 GROUNDS FOR BANK RECEIVERSHIP
 The bank is unable to pay its liabilities as they become due
in the ordinary course of business.
 Bank has insufficient realizable assets, as determined by
BSP
 Bank cannot continue in business without involving
probable losses to its depositors or creditors
 Bank has willfully desist order
QUIZ (CPAR)
 1. (PDIC) in case of bank closure , may the PDIC go directly to
liquidation proceedings without the 90- day receivership
proceedings?
 A. No because it violates the right to due process of the closed bank.
 B. Yes, in order to speed up and enhance the recovery rate for creditors
 C. No , because PDIC law and General Banking law requires 90 day
receivership.
 D. Yes, but only if there is consent by at least majority of BOD and
ratification by at least 2/3 of the outstanding of a closed bank.
 2. (PDIC) A has two separate single bank deposits with 2M and 3M ,
respectively, in the same bank closed by BSP. Aside from that, A has
single joint account of P1M with B in the same bank . How much is
the maximum insured amount by PDIC?
 A. 1,500,000 c. 500,000
 B. 750,000 d. 1,250,000
 3. (GENRAL BANKING LAW) What is the maximum limit of loan to be
granted by a bank to a single borrower?
 A. It shall at no time exceed 20% of the net worth of such bank.
 B. It shall at no time exceed 30% of the net worth of such bank.
 C. It shall at no time exceed 40% of the net worth of such bank.
 D. It shall at no time exceed 15% of the net worth of such bank.

 TRUE OR FALSE
 A bank has its buying and selling foreign exchange transactions. Under
the General Banking Law , the bank is required to exercise extra-
ordinary diligence.

 A depositor has three separate banks accounts with 1M, 2M and 3m

balance respectively in a closed bank. He can only recover Php500,000
as insured by PDIC.