Amla For CCLRB May 2013

The Anti-Money
Laundering Act of 2001,

as amended & its RIRRs
1
Course Objectives
1. To introduce the concept of money laundering
having in mind the recent amendments to the
AMLA.
2. To be able to know what are covered PERSONS

and what are their duties under the law.
3. To discuss recent regulations under BSp Circular

No. 706 and relevant features of Republic Act No.
10168, “The Terrorism Financing Prevention and
Suppression Act of 2012”
2
Course Outline
I. The concept of Money Laundering (ML)

II. Stages of ML
III. Principal duties of covered persons
IV. Bank inquiry, freeze orders & forfeiture
V. The AMLC and its Secretariat
3
I. The Concept of Money
Laundering
4
I. The Concept of Money Laundering
1. What is Money Laundering?
In layman’s term
- is an act to disguise “dirty

money” (criminal proceeds) as
“clean money” (legitimate
earnings/lawful income)
- to “launder” means to “wash”
5
2. Money Laundering, in legal parlance

(Sec. 4, RA No. 10365)
- is committed by any person who

- knowing that any MI/P
- represents, involves or relates to
the proceeds of any unlawful
activity:
6

a. transacts SAID MI/P;
b. converts, transfers, disposes of,
moves, acquires, possesses or uses
said MI/P;
c. conceals or disguises the true
nature, source, location,
disposition, movement or
ownership of or rights over said
MI/P;
7

d. attempts or conspires to commit
ML;
PENALTY
imprisonment = 7 - 14 years AND
fine = not<3M,not>2x the value of
MI/P
8

e. aids, abets, assists in or counsels
the commission of ML
f. performs or fails to perform any
act as a result of which he
facilitates the offense of ML
PENALTY
imprisonment = 4 - 7 years AND
fine = not<1.5M,not>3M
9

ML is also committed by 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.
PENALTY
imprisonment = 6mos. - 4 years OR
fine = not<100K,not>500K
10
3.1 Illustration of Money Laundering
Knowledge
2
UA/Proceeds
ML activity
1 3
Renato Renato Renato
kidnapped demanded deposit
Juan, the and ed the
son of received 5M money
pesos
Miriam. in his
ransom
money. bank
account
.
11
3.2 Illustration of Money Laundering
1
Illegal Drug Operations
(Unlawful Activity/Proceeds)
2
5M pesos income
(Knowledge)
3
Money was invested in a hotel and
restaurant business
(ML Activity) 12
4. Unlawful Activity (a.k.a. predicate offense)
(Section 2, RA No. 10365)
1. Kidnapping for ransom

2. Drugs Offenses
3. Graft & Corruption
4. Plunder
5. Robbery & Extortion
6. Jueteng and Masiao
7. Piracy
8. Qualified theft
9. Swindling
10.Smuggling
13
… Unlawful Activity
11. Violation of E-Commerce Act

12. Hijacking; destructive arson/murder
13. Terrorism
14. Financing of Terrorism
15. Bribery & Corruption of Public Officers
16. Frauds & Illegal Exactions
17. Malversation
18. Forgeries & Counterfeiting
19. Trafficking in Persons
20. Violation of the Forestry Code 14
11. Violation of E-Commerce Act

12. Hijacking; destructive arson/murder
13. Terrorism
14. Financing of Terrorism
15. Bribery & Corruption of Public Officers
16. Frauds & Illegal Exactions
17. Malversation
18. Forgeries & Counterfeiting
19. Trafficking in Persons
20. Violation of the Forestry Code 15
21. Violation of the Fisheries Code
22. Violation of the Mining Act
23. Violation of the Wildlife Resources
Conservation & Protection Act
24. Violation of the National Caves & Cave
Resources Management Protection Act
25. Violation of the Anti-Carnapping Act
26. Illegal Possession of Firearms
27. Violation of the Anti-Fencing Law
28. Violation of the Migrant Workers &
Overseas Filipinos Act 16
30. Violation of the Anti-Photo and Video

Voyeurism Act
31. Violation of the Anti-Child
Pornography Act
32. Violation of the Anti-Child Abuse Law
33. Fraudulent practices & other violations
under the Securities Code
34. Felonies or offenses of a similar
nature that are punishable under the laws
of other countries
17
5. The AMLA
Republic
Republic Republic Act No.
Republic
Act No. Act No.
Act No. 10365
9160 (took 9194 (took
effect on effect on 23
10167 (took (took
effect on 6
17 October March
July 2012)
effect on
2001) 2003) 7 March
2013)
18
II. Stages of Money Laundering
1.Placement
2.Layering
3.Integration
19
1. Placement Stage
a. Deposit in banks
b. Sending money thru money
remittance
c. Payment of credit card bills
d. Purchase of securities / money
market instruments
e. Payment of insurance premiums
f. Commingling of funds
g. Purchase of properties 20
2. Layering Stage
a. Electronic fund transfers

b. Credit / Debit memos in
banks
c. Wire transfers
d. Use of multiple companies /
entities
e. “Back to Back” schemes
21
3. Integration Stage
a. Purchase of properties
b. Setting up of a business
c. Bills payment
22
III. Principal duties of Covered Persons
(formerly Covered Institutions) (Sec.1, RA No.10365)
1. Who are Covered Persons (CPs)?
CPs are those mandated to comply with the

obligations and requirements under the
AMLA, as amended, such as follows:
23
III. Principal duties of CPs
…Covered Persons
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.
24
…Covered Persons
2. insurance companies, pre-

need companies and all
other persons supervised
or regulated by the
Insurance Commission.
25
…Covered Persons
3. (i) securities dealers, brokers,

salesmen, investment houses and
other similar persons managing
securities or rendering services as
investment agent, advisor, or consultant,
(ii) mutual funds, close-end investment
companies, common trust funds, and other similar persons, and
(iii) other entities administering or otherwise dealing in
currency, commodities or financial derivatives based
thereon, valuable objects, cash substitutes and other similar
MI/P supervised or regulated by the Securities and Exchange
Commission. 26
2. Duties of CPs under the AMLA
1. Customer Identification
• (Know-Your-Customer Rule)
2. Record Keeping
• (Record Keeping Rule)
3. Reporting of Covered and

Suspicious Transactions
• (Transaction Reporting Rule)
27
Money Laundering and Terrorist Financing Prevention
Program (MLPP)
[Sec. 18, AMLA/X805.2, BSP Circular No. 706(UARRS)]
- comprehensive and risk-based standards to prevent

bank from being misused for ML & TF
- in writing and approved by the BOD
-disseminated to all officers and staff
-submitted within 180 days from 27 January 2011
- update once every two (2) years

28
Money Laundering and Terrorist Financing Prevention
Program (MLPP)
[Sec. 18, AMLA/X805.2, BSP Circular No. 706(UARRS)]
Minimum contents of the MLPP
1. Detailed procedure for KYC, RC and TR;

2. Training program;
3. Screening & recruitment process;
4. Internal audit system;
5. Independent audit program;
6. Mechanism to address deficiency;
7. Cooperation with the AMLC; and
8. Designation of an AML Compliance Officer.
29
a. Customer Identification
(Know-Your-Customer “KYC” Rule)
Components of the KYC Rule

[Sec.9(a) AMLA/Rule 9.a.1,RIRRs]
1. Identification
2. Recording
3. Verification
4. System & control
NB. Failure to observe complete KYC will give rise to

a corresponding liability
30
…Customer Identification
Minimum Information/Documents Required
INDIVIDUAL (Rule 9.a.3, RIRRs)
1. Name
2. Present address
3. Permanent address
4. Date and place of birth
5. Nationality
6. Nature of work and name of employer or nature of self-
employment/business
7. Contact numbers
8. TIN, SSS or GSIS number
9. Specimen signature
10.Source of fund(s)
11.Names of beneficiaries in case of insurance contracts and
whenever applicable
31
CORPORATION (Rule 9.a.5, RIRRs)
1. Certificates of Business Registration (SEC);

2. Articles of Incorporation or Association and By-
Laws;
3. Principal business address;
4. Board or Partners’ Resolution duly certified by the
Corporate/Partners’ Secretary authorizing the
signatory to sign on behalf of the entity;
5. Latest GI Sheet (with names of stockholders owning
at least 20% of the OCS);
32
6. Contact numbers;
7. Source of funds and nature of business;
8. Information on beneficial owner/s; and
9. For entities registered outside the Philippines,
similar documents and/or information shall be
obtained duly authenticated by the Philippine
Consulate where said entities are registered.
33
Customer Acceptance Policy (Rule 9.a.9, RIRRs)
Factors: Profiling of customers (low,normal,high)

1. Background and source of funds;
2. Country of origin/residence/operations;
3. Public or high profile position;
4. Linked accounts;
5. Watch lists (eg. OFAC, UN Sanctions List);
6. Business activities; and
7. Type of services/products/transactions
NB: Profiling must be documented
34
III. Principal duties of CIs
Low Risk Customers (X806.1.a, UARRs)
INDIVIDUALS
1. Customer with regular employment or
economically productive activity;
2. Small account balance/transactions;
3. Resident in the area of the covered
institution’s office or branch;
35
….. Customer Identification
Low Risk Customers (X806.1.a, UARRs)
ENTITIES
1. Banking institutions;
2. Trust entities and quasi-banks authorized by the
BSP to operate as such;
3. Publicly listed companies;
4. Government agencies including GOCCs.
36
I
II. Principal duties of CPs

Reduced Due Diligence (Low-risk customers)
INDIVIDUAL
- a covered institution may defer acceptance of the
minimum information, specifically information
numbers 1 to 7 of § X806.2.a
- Information numbers 8 to 11 may be obtained

within a reasonable time but not exceeding ninety
(90) days from account opening.
37
Reduced Due Diligence
INDIVIDUAL
1. Name
2. Present address
3. Permanent address
4. Date and place of birth
5. Nationality
6. Nature of work and name of employer or nature of self-
employment/business
7. Contact numbers
8. TIN, SSS or GSIS number
9. Specimen signature
10. Source of fund(s)
11. Names of beneficiaries in case of insurance contracts and whenever
applicable
38
Reduced Due Diligence (Low-risk customers)
…but, under Rule 9.a.9.a.1, RIRRs
CP may open an account upon presentation of

an acceptable ID only.
39
Reduced Due Diligence
- ENTITIES (X806.1.d(B), UARRs) (same with RIRRs)
- a covered institution may open an account under

the official name of these entities with only no. 4
of those required under § X806.2.b
- X806.2.b(4). Board Resolution duly certified by the

Corporate Secretary authorizing the signatory to
sign on behalf of the entity
40
High Risk Customers
-Pertain to customers that are assessed by the covered

institution or by the UARRs as high risk for money
laundering and terrorist financing based on the
customer acceptance policy and specific criteria of the
covered institution. (X806.1.a, UARRs)
-Persons in the watchlist (Rule 9.a.9.b, RIRRs)
-Customer of a country not compliant with int’l
standards against ML & TF (Rule 9.a.9.b, RIRRs)
-Consequence: Enhanced due diligence shall be
applied
41
Enhanced Due Diligence
Enhanced due diligence; when to apply?

(X806.3.a,UARRs)
1. High risk customers;
2. Doubtful accuracy of any info or document;
3. Justifies re-classification;
4. Suspicious transaction;
5. . Dummies (X806.2.e, UARRs); and
6. Shell companies (X806.2.n, UARRs).
42
Enhanced Due Diligence (EDD)
Minimum measures for EDD

(Rule 9.a.9.a, RIRRs)
1. Obtain senior management approval;
2. Establish source of wealth/fund;
3. Conduct enhanced ongoing monitoring
43
Minimum Validation Procedures
Individual (X806.1.c, UARRs)

1. Confirming the date of birth from a duly
authenticated official document;
2. Verifying the permanent address through
evaluation of utility bills, bank or credit card
statement or other documents showing
permanent address or through on-site
visitation;
44
3. Contacting the customer by phone, email

or letter (such as sending of “thank you
letters”); and
4. Determining the authenticity of the
identification documents through validation
of its issuance by requesting a certification
from the issuing authority or by any other
means.
45
Juridical Entities (X806.1.c, UARRs)

1. submission of audited financial statements;
2. Inquiring from the SA the status of the entity;
3. Obtaining bank references;
4. On-site visitation; and
5. Contacting the entity by phone, email or letter
(such as “thank you letters”).
46
… Customer Identification
When to deny banking relationship? (X806.1.b, UARRs)
1. Additional information cannot be obtained

2. Any information or document provided is
false or falsified
3. the validation process is unsatisfactory
Note: this is w/o prejudice to the reporting of

a suspicious transaction to the AMLC when
warranted
47
…Customer Identification (Rule 9.a.4, RIRRs)
What are valid identification cards for purposes of

financial transactions?
- valid IDs are valid photo-bearing identification

document issued by official authority (BSP
Circular No. 608 as amended by BSP Circular No. 657)
48
“Official Authority” shall refer to the following:
1. Government of the Republic of the Philippines;

2. Its political subdivisions and instrumentalities;
3. Government-Owned and/or Controlled
Corporations;
4. Private entities or institutions registered with or
supervised or regulated either by the BSP, SEC or
IC.
49
How many ID document must be presented?
clients who engage into financial transaction with CIs for

the first time shall submit at least one (1) of the
following valid IDs, namely:
a. Passport (including those issued by foreign

governments);
b. Driver’s License;
50
c. Professional Regulation Commission (PRC) ID;

d. National Bureau of Investigation (NBI) Clearance;
e. Police Clearance;
f. Postal ID;
g. Voter’s ID;
h. Barangay Certification;
i. Government Service Insurance System (GSIS) e-
card;
j. Social Security System (SSS) ID;
k. Senior Citizen’s Card;
l. Overseas Workers Welfare Administration (OWWA)
ID;
51
m. OFW ID;
n. Seaman’s Book;
o. Alien Certification of Registration/Immigrant Certificate of
Registration;
p. Government Office and GOCC ID, e.g. Armed Forces of the
Philippines (AFP) ID, Home Development Mutual Fund
(HDMF) ID;
q. Certification from the National Council for the Welfare of
Disabled Persons (NCWDP);
r. Department of Social Welfare and Development (DSWD)
Certification;
s. Integrated Bar of the Philippines (IBP) ID;
t. Company IDs issued by private entities or institutions
registered with or supervised or regulated either by the BSP,
SEC or IC.
u. Tax Identification Number (X806.2.c, UARRs)
v. Maritime Industry Authority ID
52
In case where:
1. the ID do not bear any photo; or
2. The photo does not clearly show the face of
the customer or authorized signatory
Remedy: the CI may utilize its own technology to

take the photo of the customer or authorized
signatory
53
What about students?
Students who are beneficiaries of

remittances/fund transfers who are not yet of
voting age may be allowed to present the
original and submit a clear copy of one (1) valid
photo-bearing school ID duly signed by the
principal or head of the school.(AMLC Resolution
No. 08 dated 20 February 2008)
54
Rules on KYC
#1. account name
CIs shall maintain accounts only in the true

and full name of the account owner or
holder
55
Rules on KYC
#2 face-to-face contact
No new accounts shall be opened and created

without face-to-face contact and full
compliance with the minimum
information/documents required for customers
56
Rules on KYC
Face-to-face contact: Can it be done by another

party for the CI?
Yes. CIs, w/o prior Monetary Board approval, may
rely either by:
a. Outsourcing arrangement(X806.1.e.2, UARRs);
or
b. Third-party reliance (X806.1.e.3, UARRs),
in the conduct of face-to-face contact with the
customer.
57
Rules on KYC
#3 Absolutely prohibited accounts:
a. anonymous accounts
b. Accounts under fictitious names
c. All other similar accounts
(Sec.9(a), AMLA)
58
Customer Identification
Rules on KYC
#4. Numbered accounts
Peso and foreign currency non-checking

numbered accounts shall be allowed
(Sec.9(a), AMLA)
59
Rules on KYC
With respect to numbered accounts..

- The BSP may conduct annual testing solely for the
determination of the existence and true identity of
the owners of such accounts.
- The SEC and IC may conduct similar testing more

often than once a year and covering such other
related purposes as may be allowed under their
respective charters. (Rule 9.1.g, RIRRs)
60
Rules on KYC
#5. Dealings with customers who are acting as:
- trustee; nominee; agent; or in any capacity for and on

behalf of another
- covered institutions shall verify and record the true
and full identity of the person(s) on whose behalf a
transaction is being conducted.(Rule 9.a.13-14,
RIRRs)
61
Rules on KYC
#6. Dummies
In case a covered institution has doubts as to

whether such persons are being used as dummies in
circumvention of existing laws, it shall immediately
make the necessary inquiries to verify the status of
the business relationship between the parties.
62
Rules on KYC
#7. Politically Exposed Person (PEP)
Who is a PEP? (X803(k), UARRs)

Is an individual who is or has been entrusted with
prominent public positions in the Philippines or in a
foreign state, including:
- heads of state or of government;
- senior politicians;
- senior national or local government;
- judicial or military officials;
- senior executives of government or GOCCs; and
- important political party officials. 63
Customer Identification
Rules on KYC
Corresponding duty of the CI (PEPs)
- establish and record the true and full identity of

PEPs as well as their immediate family members
and the entities related to them; and
- establish a policy on what standard of due

diligence will apply to them taking into
consideration their position and the risks attendant
thereto.(X806.2.g, UARRs)
64
Rules on KYC
#8. Shell companies are corporations or

legal entities which have no business
substance in their own right but through
which financial transactions may be conducted
Rule: dealings with shell companies should

be undertaken with extreme caution and
always apply enhanced due diligence (Rule
9.a.19, RIRRs)
65
2. Record Keeping
(Sec.9b, AMLA)(Rule 9.b, RIRRs)
Rule #1
All records of all transactions of covered

institutions shall be maintained and safely
stored for five (5) years from the dates of
transactions.
66
…Record Keeping
Rule #2
With respect to closed accounts, the records on

customer identification, account files and
business correspondence, shall be preserved
and safely stored for at least five (5) years from
the dates when they were closed.
67
…Record Keeping
Rule #3
The records and files shall contain the full and

true identity of the owners or holders of the
accounts involved in the covered
transactions and all other customer
identification documents.
68
…Record Keeping
Rule #4
If a money laundering case based on any record

kept by the covered institution concerned has been
filed in court, said file must be retained beyond the
period stipulated under the rules until it is
confirmed that the case has been finally resolved or
terminated by the court. (Rule 9.b.4, RIRRs)
69
…Record Keeping
Rule #5
Records shall be retained as originals on such

forms as are admissible in court pursuant to
existing laws and the applicable rules
promulgated by the Supreme Court (Rule 9.b.5,
RIRRs)
70
…Record Keeping
Rule #6
CPs shall designate at least two (2) officers

who will be jointly responsible & accountable in
the safekeeping of all records & documents.
(X808.3, UARRs)
71
…Record Keeping
Penalty for failure to keep records:

[Sec. 14(b), AMLA]
Imprisonment = 6 mos. - 1 yr OR
fine = not < 100k but not > 500k OR both.
72
3. Transaction Reporting
[Sec. 9(c), AMLA]
2 types of reports under the AMLA
1. Covered Transaction Report (CTR)
2. Suspicious Transaction Report (STR)
73
…Transaction Reporting
Covered transactions
are single transactions in cash or other equivalent

monetary instrument involving a total amount in
excess of Five hundred thousand pesos (P500,000)
within one (1) banking day
74
Non-Cash,No/Low Risk CT – Deferred reporting
(AMLC Reso No.58, 25 May 2005) (AMLC Reso No. 24, 18 March 2009)
(AMLC Reso No. 10, 24 January 2013- specific transactions)
1. Transactions b/w banks & the BSP;

2. Transactions b/w banks operating in the Phils;
3. Internal operating expenses of the banks;
4. Transactions b/w banks and govt. agencies;
5. Transfer of funds b/w accounts of the same owner
within the same bank;
6. Roll-overs of placements of time deposits; and
7. Loan interest/principal payment debited against
borrower’s deposit acct maintained with the lending
bank 75
AMLC Resolution No. 10-A, 24 January 2013
All CPs must file CTRs, regardless of the mode

of payment used in the settlement thereof,
including transactions in checks, fund
transfers, and/or the debiting or crediting of
accounts.
76
AMLC Resolution No. 10-B, 24 January 2013
All CPs must file CTRs, regardless of the mode

of payment used in the settlement thereof,
including transactions in checks, fund
transfers, and/or the debiting or crediting of
accounts.
77
Suspicious transactions
are transactions with covered institutions,

regardless of the amounts involved, where
any of the following circumstances exists:
(Red Flags/Suspicious Transaction Indicators)
1. there is no underlying legal or trade obligation,

purpose or economic justification;
78
Red Flags/Suspicious Transaction Indicators
2. the client is not properly identified;
3. the amount involved is not commensurate with

the business or financial capacity of the client;
79
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 the AMLA; (smurfing)
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 institution;
80
6. the transaction is in any way related to an unlawful
activity or offense under the AMLA that is about to be, is
being or has been committed; or
7. transactions similar or analogous to the foregoing.
8. Also, other Suspicious Transaction Indicators as

mentioned under AMLC Resolution No. 59, dated 01 June
2005
81
What report must be filed should the transaction
was determined as both a covered and a
suspicious transaction?
The covered institution shall be required to report

the same as a suspicious transaction.
82
Who decides When to file report?
The ultimate decision on When to file a report to the

AMLC lies with:
1. The designated person of Board level;
2. Approved Committee; or
3. The Compliance Officer with notice to the
members of the Board of Directors of his
decision.(X805.2, UARRs)
83
When to file/submit the report?
–Covered institutions shall report to the AMLC all

covered transactions and suspicious transactions
within five (5) working days from occurrence thereof,
unless the Supervising Authority prescribes a longer
period not exceeding fifteen (15) working days.(Sec. 7,
RA No. 10365)
–- within ten (10) days (X807, UARRs)
-- within 5 days (AMLC Res. No. 61- S2016; 9.19.16)
84
Computation of Time
Pursuant to AMLC Resolution No. 2, series of 2005, the

following non-working days are excluded from counting
the prescribed reporting period:
1. Weekend (Saturday and Sunday);

2. Official regular national holiday;
3. Officially declared national holiday (special non-working
holiday nationwide);
4. Officially declared local holiday in the locality where
AMLC Secretariat Office is located; and
5. AMLC declared “non-reporting day”.
85
What forms shall be used in filing the CTRs and

STRs?
- CTRs and STRs shall be in the forms

prescribed by the AMLC.
- To be submitted in electronic form (Rule 9.c.2,

RIRRs)
86
AMLC Resolution No. 93, dated 17 Aug. 2011
-The AMLC deferred, until further advice, the

submission to the AMLC of hard copies of STRs
-only Compliance Officers or duly authorized officers
shall electronically sign the CTRs and STRs
- Electronic copies of CTRs and STRs shall be
preserved and safely stored for at least 5 years from
the dates the same were reported to the AMLC
87
Malicious reporting
- is committed by any person who,
- with malice or in bad faith,
- reports/files a completely unwarranted or false
information
- relative to money laundering transaction against any
person.
• Penalty
• Imprisonment = 6 mos - 4 yrs AND
Fine = not < 100k but not > 500k, at the
discretion of the court. No probation. [Sec.14(c), AMLA]
88
[Sec. 9(c), AMLA/ Rule 9.c.5, RIRRs]
Will it not violate Bank Secrecy Laws?
- No. This is an exemption to the provisions of the Bank

Secrecy Laws.
- When reporting covered or suspicious transactions to

the AMLC, covered institutions and their officers and
employees shall not be deemed to have violated bank
secrecy laws.
89
…T ransaction Reporting
Safe Harbor Provision
Will your answer be the same if the report did not result in the
filing of criminal case? Yes.
Under the Safe Harbor Provisions, 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 good faith,
- whether or not such reporting results in any criminal
prosecution under the AMLA or any other Philippine law.
(Rule 9.c.5, RIRR)
90
Confidentiality of Reports
Officers and employees of the covered institutions

are prohibited from communicating, directly or
indirectly, in any manner or by any means, to any
person, entity or media the fact that a covered or
suspicious transaction report was made, the
contents thereof, or any other information in
relation thereto. [Sec. 9(c), AMLA)
Penalty
imprisonment = 3 - 8 yrs AND
fine = not < 500k but not > 1M
91
IV. Bank Inquiry & Freezing of Assets
Bank Inquiry (Sec. 2, RA No. 10167)
Authority of the AMLC to Inquire into Bank

Deposits
–General Rule: court order is required
–Examines or inquires into bank deposits/
investments upon order of any competent court in
cases of violation of the AMLA, when it has been
established that there is probable cause that the
deposits / investments are related to an unlawful
activity.
92
Bank Inquiry EXCEPTIONS:
No court order is necessary in the following cases

1. Kidnapping for ransom;
2. Narcotics offenses;
3. Hijacking, destructive arson and murder, including those
perpetrated by terrorists against non-combatant persons and
similar targets.
4. Similar to 1, 2 & 3 which are punishable in other countries;
5. Terrorism; and
6. Conspiracy to commit Terrorism (R.A. No. 10167)
7. Terrorism Financing (RA No. 10168 which took effect on July 5,
2012)
93
Bank Inquiry
When no court order is necessary to examine or

inquire into bank deposits/investments--
the AMLC shall issue a Resolution authorizing the

inquiry into or examination of any deposit or
investment with such banking or non-banking
financial institution and their subsidiaries and
affiliates concerned. (Rule 11.b.1, RIRRs)
94
Bank Inquiry
Duty of the banking or non-banking

institution.
Immediately upon receipt of the AMLC

Resolution, it shall allow the AMLC and/or its
authorized representative(s) full access to all
records pertaining to the deposit or investment
account. (Rule 11.b.2, RIRRs)
95
Bank Inquiry
What is the penalty for purposely failing or willfully

refusing to allow bank inquiry?
Payment of fine = not<100k nor >500k

Without prejudice to filing of criminal charges (Rule
11.b.2, RIRRs)
96
V. The AMLC and its Secretariat
(Created under Secs. 7 & 8, RA No. 9160)
The Anti-Money Laundering Council is composed of:

a. the Governor of the Bangko Sentral ng Pilipinas
(BSP) as Chairman;
b. the Chairman of the Securities and Exchange

Commission (SEC) as member; and
c. the Commissioner of the Insurance Commission

(IC) as member.
97
VI. The AMLC and its Secretariat
The AMLC Secretariat
The AMLC is assisted by a Secretariat headed by an

Executive Director and consists of four (4) units;
1. the Compliance and Investigation Group (CIG);
2. the Legal Services Group (LSG);
3. the Information Management and Analysis
Group (IMAG);
4. and the Administrative and Financial Services
Division (AFSD).
98
Contact details
Address
Anti-Money Laundering Council Secretariat

Room 507, 5th Floor, EDPC Building
Bangko Sentral ng Pilipinas (BSP) Complex
Mabini corner Ocampo Street, Malate
Manila, Philippines
Telephone/Fax/E-mail
Trunkline : +63-2-708-7701 local 2619

Fax : +63-2-708-7909
E-mail : secretariat@amlc.gov.ph /
amlc@bsp.gov.ph
99
What are the other offenses punishable under the
AMLA, as amended?
a. Failure to keep records is committed by any
responsible official or employee of a covered
institution who fails to maintain and safely store all
records of transactions for 5 years from the dates the
transactions were made or when the accounts were
closed. The penalty is 6 months to 1 year
imprisonment or a fine of not less than P100,000.00
but not more than P500,000.00, or both.
100
b. Malicious reporting is committed by any person who,
with malice or in bad faith, reports or files a completely
unwarranted or false information regarding a money
laundering transaction against any person. The
penalty is 6 months to 4 years imprisonment and a fine
of not less than P100,000.00 but not more than
P500,000.00. The offender is not entitled to the benefits
of the Probation Law.
101
c. Breach of Confidentiality. For this offense, the
penalty is 3 to 8 years imprisonment and a fine of
not less than P500,000.00 but not more than P1
million. In case the prohibited information is
reported by media, the responsible reporter, writer,
president, publisher, manager, and editor-in-chief
are held criminally liable.
102
d. Administrative offenses. The AMLC, after due
investigation, can impose fines from P100,000.00 to
P500,000.00 on officers and employees of covered
institutions or any person who violates the provisions
of the AMLA, as amended, the Implementing Rules
and Regulations, and orders and resolutions issued
pursuant thereto.
103
Money laundering is also committed by any covered
person who, knowing that a covered or suspicious
transaction is required under this Act to be reported
to the Anti-Money Laundering Council (AMLC), fails
to do so.
104
The Monetary Board on February 23, 2017, approved
amendments to the Anti-Money Laundering
Regulations of the Manual of Regulations for Banks,
through Circular No. 950, Series of 2017.
105
ONGOING MONITORING OF
CUSTOMERS, ACCOUNTS AND
TRANSACTIONS
Ensure that they have established the true and full

identity of their customers and shall, on the basis of
materiality and risk, update, no later than once every
three (3) years, all customer identification information
and documents, including photo, required to be
obtained under the AMLA.
106
REPORTING OF SUSPICIOUS
TRANSACTIONS
Determination of whether a transaction is suspicious or not starts at the

branch level and the Credit Department. A branch head who determines that
the transaction is suspicious must submit a written report within three (3)
banking days from the transaction to the Compliance Officer, stating therein
why the transaction has been determined to be suspicious. The Compliance
Officer shall review and evaluate the report. As soon as practicable, the
Compliance Officer shall report the same to the Board of Directors through
the Audit and Compliance Committee, including the recommendation. The
Audit and Compliance Committee shall present the matter to the Board for
their information and concurrence with the recommendation.
In accordance with the requirements of AMLA, the matter of

presentation and reporting of a suspicious transaction will be handled with
utmost secrecy.
107
IX. Restricted Accounts
To promote financial inclusion and to ensure that the micro-business

owners and the low-income households are able to manage their finances through the
financial system, customers who may not be able to provide any of the required
information or any valid identification document may be allowed to open a restricted
account with the bank provided:
1. the aggregate credits in a year shall not exceed P100,000; and
2. the account shall not be allowed to receive/send foreign remittances.
In lieu of a valid ID, the bank shall obtain the customer’s-

1. complete name
2. birth date
3. source of funds
4. present and/or permanent address
5. nationality
6. a clear photograph
7. signature or thumbprint
108
The restricted account shall be subject to the condition
that the customer shall obtain a valid ID within 12
months from opening, otherwise, the account shall be
closed and the remaining balance shall be returned to
the customer. However, it may be extended for another
12 months provided the customer can show proof that
he applied for a valid ID.
The bank shall ensure that all of the above

conditions are complied with, otherwise complete
information and valid ID shall immediately be required to
the account shall be closed accordingly.
109
X. Relief in Case of Calamity
In case of a disastrous calamity and subject to a declaration by the

Bangko Sentral on the applicability of this relief, any requirement for the
presentation of a valid ID shall be relaxed, subject to the following conditions:
1. The amount of transactions shall not exceed P50,000 per day;
2. The customer is either a permanent or temporary resident or who
conducts business in a severely affected area which has been declared to be
under a state of calamity by a competent authority;
3. The customer shall submit a written certification, which need not be
notarized, that he/she is a victim of the subject disastrous calamity and has lost
his/her valid IDs; and
4. The customer’s account activities shall be subject to strict
monitoring by the bank to identify potential abuse of the relaxed requirement and
any suspicious transactions shall be reported to the AMLC within the prescribed
period.
110

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The Anti-Money

Laundering Act of 2001,

2. To be able to know what are covered PERSONS

3. To discuss recent regulations under BSp Circular

I. The concept of Money Laundering (ML)

1. What is Money Laundering?

- is an act to disguise “dirty

- to “launder” means to “wash”

2. Money Laundering, in legal parlance

- is committed by any person who

2. Money Laundering, in legal parlance

2. Money Laundering, in legal parlance

2. Money Laundering, in legal parlance

2. Money Laundering, in legal parlance

1. Kidnapping for ransom

11. Violation of E-Commerce Act

11. Violation of E-Commerce Act

30. Violation of the Anti-Photo and Video

a. Electronic fund transfers

1. Who are Covered Persons (CPs)?

CPs are those mandated to comply with the

1. banks, non-banks, quasi-banks,

2. insurance companies, pre-

3. (i) securities dealers, brokers,

3. Reporting of Covered and

- comprehensive and risk-based standards to prevent

- in writing and approved by the BOD

-disseminated to all officers and staff

-submitted within 180 days from 27 January 2011

- update once every two (2) years

Minimum contents of the MLPP

1. Detailed procedure for KYC, RC and TR;

Components of the KYC Rule

NB. Failure to observe complete KYC will give rise to

1. Certificates of Business Registration (SEC);

Factors: Profiling of customers (low,normal,high)

II. Principal duties of CPs

- Information numbers 8 to 11 may be obtained

…but, under Rule 9.a.9.a.1, RIRRs

CP may open an account upon presentation of

- ENTITIES (X806.1.d(B), UARRs) (same with RIRRs)

- a covered institution may open an account under

- X806.2.b(4). Board Resolution duly certified by the

-Pertain to customers that are assessed by the covered

Enhanced due diligence; when to apply?

Minimum measures for EDD

Individual (X806.1.c, UARRs)

3. Contacting the customer by phone, email

Juridical Entities (X806.1.c, UARRs)

1. Additional information cannot be obtained

Note: this is w/o prejudice to the reporting of

What are valid identification cards for purposes of

- valid IDs are valid photo-bearing identification

1. Government of the Republic of the Philippines;

clients who engage into financial transaction with CIs for

a. Passport (including those issued by foreign

c. Professional Regulation Commission (PRC) ID;

Remedy: the CI may utilize its own technology to

What about students?

Students who are beneficiaries of

#1. account name

CIs shall maintain accounts only in the true

No new accounts shall be opened and created