Anti-Money Laundering

AMLA Regulations
1. R.A. 10365 (Latest amendment of AMLA
Act of 2001) Amending RA 10167, RA
9194 and RA 9160 “Anti-Money
Laundering Act”
2. R.A. 10168 (The Terrorism Financing
Prevention and Suppression Act of 2012)
3. BSP Cir. No. 706, Updated Anti-Money
Laundering Rules & Regulations
4. AMLA Reporting Format 1.0
Overview of AML/CFT Regime
R.A. No. 9160 (2001) • Anti – Money Laundering Act of 2001

R.A. No. 9194 (2003) • Define ‘Covered Transaction’ as a transaction with a total amount in excess of
P500,000.00 within one (1) banking day;
• Inclusion of Suspicious Transaction;
• Inclusion of penalty on the Breach of Confidentiality

R.A. No. 10167 (2012) • Court of Appeals shall act on the petition to freeze within 24 hours from filing
the petition;
• Only the Supreme Court can issue a TRO or writ of injunction;
• AMLC may inquire into or examine any particular deposit or investment,
including related accounts upon order of any competent court based on an ex
parte application in cases of violations of this act.

R.A. No. 10168 (2012) • The Terrorism Financing Prevention and Suppression Act of 2012;
• Humanitarian Exemptions

R.A. No. 10365 (2013) • Expands the definition of Money Laundering as a crime;
• Expands coverage of covered persons;
• Covers more predicate crimes from 14 to 34 (including environmental
crimes);
• Effectivity of Freeze Order – max of 6 months;
• Land Registration Authorities and Registries of Deeds are required to submit
Money Laundering
Money laundering is committed by any person who, knowing that any monetary
instrument or property represents, involves, or relates to the proceeds of any
unlawful activity:
(a) transacts said monetary instrument or property
(b) converts, transfers, disposes of, moves, acquires, possesses or uses said
monetary instrument or property
(c) conceals 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 to commit money laundering offenses referred to in
paragraphs (a), (b) or (c)
(e) aids, abets, assists in or counsels the commission of the money laundering
offenses referred to in paragraphs (a), (b) or (c) above; and
(f) performs or fails to perform any act as a result of which he facilitates the
offense of money laundering referred to in paragraphs (a), (b) or (c) above.
"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.”
Stages of Money Laundering
Covered Persons (Section 3(a) of RA 10365)
Covered Persons (Section 3(a) of RA
10365)
Anti-Money Laundering Council
the Philippines’ Financial Intelligence Unit (FIU) tasked to implement the AMLA.
Composition
(1)Chairman of AMLC - BSP Governor
(2)Members: SEC Chairperson and IC Commissioner
Functions of the AMLC
1.To require submission of and receive covered or suspicious transaction reports from covered persons.
2.To issue orders 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 or STR or request assistance from a foreign state, or believed by
the Council on substantial evidence to be related to an unlawful activity.
3.Institute civil forfeiture proceedings and all other remedial proceeding through the Office of the Solicitor General.
4.Cause the filing of complaints with the Department of Justice of the Ombudsman for the prosecution of money
laundering offenses.
Anti-Money Laundering Council
5. Investigate suspicious transactions and covered transactions deemed suspicious after an investigation by
AMLC, money laundering activities, and other violations of AMLA.

6. 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.
◦Court of Appeals must act on the petition to freeze w/in 24 hours from filing.
◦The freeze order issued, upon determination that the monetary instrument or property is related to an unlawful
activity, is effective for a period not exceeding 6 months. It is deemed lifted if no case is filed within that period.
(Covered Person shall not lift the effects of the freeze order without securing official confirmation from the
AMLC)

7. To impose administrative sanctions for the violation of laws, rules, regulations and orders and resolutions
issued pursuant thereto.

8. 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 offenders.
Elements of the Crime Money Laundering
Proceeds - (monetary instrument or property)
Overt act - (transaction, conversion, transfer, etc. / conspiracy to convert, transfer, etc. /
attempt to convert, transfer, etc.)
Knowledge - (that the proceeds represents, involves, or relates to the proceeds of the unlawful
activity.
Unlawful Activities/Predicate Crimes
(Section 3(i) of RA 10365)
1. Kidnapping for ransom 12. Hijacking, destructive arson and
murder
2. Drug Trafficking
13. Terrorism and conspiracy to commit
3. Graft and Corrupt Practices Act terrorism
4. Plunder under Republic Act No. 7080, as 14. Terrorism Financing
amended
15. Bribery
5. Robbery and extortion 16. Frauds and Illegal Exactions
6. Jueteng and Masiao 17. Malversation of public funds and
property
7. Piracy on the high seas
18. Forgeries and counterfeiting
8. Qualified theft
19. Human Trafficking
9. Swindling
10. Smuggling
11. Violations of Electronic Commerce Act of
2000
Unlawful Activities/Predicate Crimes
(Section 3(i) of RA 10365)
20. Violations of the Revised Forestry Code of the Philippines
21. Violations of the Philippine Fisheries Code of 1998
22. Violations of the Philippine Mining Act of 1995
23. Violations of the Wildlife Resources Conservation and Protection Act
24. Violation of the National Caves and Cave Resources Management Protection Act
25. Car napping
26. Illegal/Unlawful Possession, Manufacture, Dealing In, Acquisition or Disposition of Firearms, Ammunition or Explosives
27. Violation of Presidential Decree No. 1612, otherwise known as the Anti-Fencing Law
28. Violation of the Migrant Workers and Overseas Filipinos Act of 1995, as amended by RA 10022
29. Violation of the Intellectual Property Code of the Philippines
30. Photo and Video Voyeurism
31. Child Pornography
32. Children Abuse, Exploitation and Discrimination
33. Fraudulent practices and other violations under Republic Act No. 8799, otherwise known as the Securities Regulation Code of 2000
34. Felonies or offenses of a similar nature that are punishable under the penal laws of other countries.
AMLA’s 3 Major Requirements
on Banks
AMLA’s 3 Major Requirements
For Compliance by Covered Persons
Customer Identification and due
diligence or Know Your Customer
(KYC)

Reporting of Covered and Suspicious

Transactions (Section 8(c) of RA 10365)
◦ All covered persons shall report to the
AMLC all covered and suspicious
transactions.

Record-keeping
AMLA Requirements on Banks
Adequate KYC
AMLA Minimum Information Requirement – Individual

1. Name;
2. Present address;
3. Date and place of birth;
4. Nature of work, name of employer or nature of self-
employment/business;
5. Contact details;
6. Specimen signature;
7. Source of funds;
8. Permanent address;
9. Nationality;
10. Tax identification number, Social Security System number or
Government Service Insurance Number, if any; and
11. Name, present address, date and place of birth, nature of work
and source of funds of beneficial owner or beneficiary, whenever
applicable
AMLA Requirements on Banks
Adequate KYC
AMLA Minimum Information Requirement – Corporate & Juridical

1. Certificates of Registration issued by the Department of Trade and Industry for single proprietors, or by the
Securities and Exchange Commission, for corporations and partnerships, and by the BSP, for money
changers / foreign exchange dealers and remittance agents;

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 General Information Sheet which lists the names of directors / trustees / partners, principal
stockholders owning at least twenty percent (20%) of the outstanding capital stock and primary officers such
as the President and Treasurer;

6. Contact numbers of the entity and authorized signatory/ies;

7. Source of funds and nature of business;

8. Name, present address, date and place of birth, nature of work and source of funds of beneficial owner or
beneficiary, if applicable; 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.
AMLA Requirements on Banks
Adequate KYC
Valid Identification Cards (IDs)

Valid photo-bearing identification document issued by an official authority. 

“OFFICIAL AUTHORITY” refers to any of the following:

i.Government of the Republic of the Philippines;

ii.Its political subdivisions and instrumentalities;
iii.Government-owned and/or Controlled Corporations (GOCCs); and
iv.Private Entities or Institutions Registered with or Supervised or Regulated either by the
Bangko Sentral ng Pilipinas (BSP) or Securities & Exchange Commission (SEC) or Insurance
Commission (IC).

Latest BSP Circulars: BSP Circular No. 792, 706, 657 and 608
AMLA Requirements on Banks
Adequate KYC
BSP Circular 706/792: Acceptable IDs with photograph
(series of 2011 and 2013 respectively):

Others:
•Photo-bearing school ID duly signed by
principal – for STUDENTS
•Similar IDs duly signed by foreign
government where the customer is resident /
citizen – for FOREIGN CUSTOMERS
AMLA Requirements on Banks
Adequate KYC
1. Adequate KYC Policies & Procedures
Customer Risk Assessment

High Risk Enhanced Due Diligence

Medium Risk Average Due Diligence

Low Risk Reduced Due Diligence

In no case shall reduced diligence be applied to high risk customers.

Clients are now being assessed using the internally developed

Customer Risk Scoring.
AMLA Requirements on Banks
Adequate KYC
1. Adequate KYC Policies & Procedures

Customer Risk Scoring

A process of evaluating individual or business clients' risk
classification. This risk scoring includes parameters / criteria
such as, but not limited to the clients' background, source of
funds, location, and type of products / transactions to be
availed with the Bank.

This process also document on how a customer was profiled

and what standard of due diligence to be applied.
AMLA Requirements on Banks
Adequate KYC
1. Adequate KYC Policies & Procedures
Customer Identification Process
As a general rule, no new account shall be opened and be created w/o face-
to-face contact and personal interview except through the following:

•Account opened through a trustee, nominee, agent, or

intermediary (Subsec. 806.1.e.1)
•Outsourcing arrangement (Subsec. 806.1.e.2)
• Formally documented; Ultimate responsibility lies with the
counterparty

•Third Party Reliance (Subsec. 806.2.e.1.a)

• Covered person shall obtain from 3rd party a Written Sworn
Certification that the 3rd party conducted Customer Identification
process, including face-to-face requirements; and the covered
person can obtain the identification documents upon request w/o
delay.
AMLA Requirements on Banks
Adequate KYC
Politically Exposed Persons (PEP) (X806.2.g)

A single individual who is or has been

Things to do when dealing with a PEP:
entrusted with prominent public positions
in the Philippines or in foreign state 1.Endeavor to establish the true and full identity of PEP
including: 2.Endeavor to establish the true and full identity of immediate family members

Head of state or of government; 3.Endeavor to establish the true and full identity of entities related to him

Senior politicians; 4.Apply the type of due diligence taking into consideration his position & risk
attendant thereto.
Judicial or military officials;
Senior executives of GOCC’s;
Important officials of political parties
AMLA Requirements on Banks
Adequate KYC
Correspondent Banking (X806.2.h)
• A correspondent bank is a financial institution that provides services on behalf of another,
equal or unequal, financial institution. It can conduct business transactions, accept deposits
and gather documents on behalf of the other financial institution.
• Correspondent banking customers shall be subject to enhanced due diligence.

Shell companies / Shell banks (X806.2.n)

• A shell bank is a term that describes a financial institution that does not have a physical
presence in any country. No actual business. A non-trading company used as a vehicle for
various financial maneuvers or kept dormant for future use in some other capacity.
• A covered institution shall refuse to enter into, or continue, correspondent banking
relationship with them.
AMLA Requirements on Banks
Adequate KYC
Fund / Wire Transfer (X806.2.i)
• Beneficiary Institution shall not accept shall not accept instructions to pay-out fund transfers to non-
customer beneficiary, unless conducted the necessary customer due diligence to establish the true and
full identity and existence of said beneficiary.
• Originating institution shall not accept instructions to fund/wire transfer from a non-customer originator,
unless conducted the necessary customer due diligence to establish the true and full identity and
existence of said originator.
• Cross border and domestic fund / wire transfers and related message amounting to P50,000 or more or its
equivalent shall include accurate and meaningful originator information;
a) Name of the originator;
b) Address or in its absence the national identity number or date and
place of birth of the originator; and
c) Account number of the originator or in its absence, a unique
reference number
• Should any wire transfer amounting to P50,000 or more or its equivalent be unaccompanied by the
required originator information, the beneficiary institution shall exert all efforts to establish the true and
full identity and existence of the originator by requiring additional information from the originating
institution or intermediary institution.
AMLA Requirements on Banks
Adequate KYC
Buyers of cashiers, managers, or certified checks (X806.2.j)
• Existing customers
(1) True and full name of the buyer or the applicant if buying on behalf of an entity;
(2) Account number; (3) Date of issuance and the number of the check; (4) Name of the payee; (5) Amount; and (6)
Purpose of such transaction.

• Other than existing customers

Obtain all the identification documents and minimum information required to establish the true and full identity and
existence of the applicant. In no case shall reduced due diligence be applied to the applicant and, where
circumstances warrant, enhanced due diligence should be applied.

• In Blank or payable to cash, bearer or numbered account

a.) amount of each check shall not exceed P10,000;
b.) buyer of the check is properly identified in accordance with its customer acceptance and identification policies
c.) register of said checks indicating all the information require
d.) shall take measure(s) to ensure that said instruments are not being used/resorted to by the buyer or depositor in
furtherance of a money laundering activity
e.) deposit of said instruments shall be subject to the same requirements of scrutiny applicable to cash deposits
f.)Transactions involving said instruments should be accordingly reported to the AMLC if there is reasonable ground
to suspect that said transactions are being used to launder funds of illegitimate origin.
AMLA Requirements on Banks
Adequate KYC
Second endorsed Checks (X806.2.k)

• Shall limit the acceptance of second-endorsed checks from properly identified customers and only
after establishing that the nature of the business of said customer justifies, or at least makes
practical, the deposit of second-endorsed checks.

Handling of client’s engage in Money Service Business (X806.2.l)

Foreign exchange dealers/money changers/
remittance agents

•Shall submit a copy of the certificate of registration issued to them by the Bangko Sentral as part of
their customer identification document.

•Certificate of registration shall be for each head office, branch agent, sub-agent, extension office or
business outlet of foreign exchange dealers, money changers and remittance agents.

•Shall be subject to enhanced due diligence.

AMLA Requirements on Banks
Adequate KYC
Numbered accounts (X806.2.o)
• Peso and foreign currency non-checking numbered accounts are allowed but the covered institution
shall establish the true and full identity and existence of the beneficial owners of such accounts and
applying enhanced due diligence.
Prohibited accounts (X806.2.p)
• Anonymous accounts, accounts under fictitious names, numbered checking accounts, and all other
similar accounts.
On-going monitoring of customers, accounts and Transactions (X806.3)

• Shall ensure that the true and full identity of the customers have been established
• Shall update all identification information and documents required to be obtained by the AMLA, as
amended, its RIRR
• Has a system that will enable it to understand the normal and reasonable account activity of customers
and detect unusual or suspicious patterns of account activity
• Risk and materiality based on-going monitoring of customer’s accounts and transactions should be part
of the customer due diligence
AMLA Requirements on Banks
Reporting (Covered & Suspicious Transactions)
2. Reporting of Covered Transaction (CTR) & Suspicious Transaction (STR)
Covered Transaction (Sec. 3(b) of AMLA, RIRR)
- A single transaction in cash or other equivalent monetary instrument
involving a total amount in excess of Php500 thousand within one
banking day.
- Multiple transactions or series of transactions with an amount of not
more than Php500 thousand each, but whose total amount exceeds the
threshold amount, are NOT reportable as “Covered Transaction.”

Reporting (Sec. X807)

- Submitted to AMLC within 10 working days from occurrence thereof.

Deferred Reporting (Subsec. 807.1)

- The PSE, Philippine Central Depository, Securities Clearing
Corporation of the Philippines and transfer agents are EXEMPT from
filing CTRs but are required to file STRs when the transactions that pass
through them are deemed suspicious.
AMLA Requirements on Banks
Reporting (Covered & Suspicious Transactions)
Suspicious Transactions (Sec. 3(b-1) of AMLA, RIRR)
- Are transactions with covered persons, regardless of the amounts involved, where any of the
following circumstances exist:

a) there is no underlying legal or trade obligation, purpose or economic justification;

b) the client is not properly identified;
• the amount involved is not commensurate with the business or financial capacity of the client;
• 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 act;
a) 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;
b) the transaction is in any way related to an unlawful activity or any money laundering activity or
offense under the AMLA, as amended, is being or has been committed;
• any transaction that is similar, analogous or identical to any of the foregoing.

Reporting (Sec. X807)

a) Submitted to AMLC within 10 working days from occurrence thereof.
AMLA Requirements on Banks
Record Keeping
3. Record Keeping Requirement
(Section X808)
a.Identification records: Maintained and safely stored as
long as the account is active.
b.Transaction records: Maintained and safely store for 5
years from date of transaction.

(Subsec. X808.1)
Closed accounts: Preserve and safely store
1. Records on customer identification, 2. Account files,
and 3. Business correspondences at least 5 years from date
of closure.

(Subsec. X808.2)
Money laundering case filed in Court: Retained beyond
5 years.
Until confirmed that the case has been finally resolved or
terminated by the court.
 R.A. No. 10365
Criminal & Administrative Liabilities
R.A. No. 10365 Criminal & Administrative
Liabilities
Money Laundering Offenses / Penalties

1.Knowingly transacting or attempting to transact any monetary instrument or property which represents,
involves or relates to the proceeds of any unlawful activity (Money Launderer himself)
Penalty:
- 7 to 14 years of imprisonment; and
- A fine of not less than P3M, but not more than twice the value of the monetary instrument or
property.

2. Knowingly performing or failing to perform an act to any monetary instrument or property involving the
proceeds of any unlawful activity as a result of which he facilitated the offense of money laundering (The person
assists the money launderer)
Penalty:
- 4 to 7 years of imprisonment; and
- A fine of not less than P1.5M, but not more than P3M.

3. Knowingly failing to disclose and file with the AMLC any monetary instrument or property required to be
disclosed and filed
Penalty:
- 6 months to 4 years of imprisonment; or
- A fine of not less than P100k, but not more than P500k or both
R.A. No. 10365 Criminal & Administrative
Liabilities
For failure to keep records
Penalty:
- 6 months to 1 year of imprisonment; or
- A fine of not less than P100k, but not more than P500k or both.

For malicious reporting

Penalty:
- 6 months to 4 years of imprisonment; and
- A fine of not less than P100k, but not more than P500k; Provided that the offender is
not entitled to avail the benefits of the Probation Law. (Sec. 14(c), AMLA)

For breach of confidentiality

Penalty:
- 3 to 8 years of imprisonment; and
- A fine of not less than P500k, but not more than P1M.
 Administrative Offenses,
Other Offenses, and
Crimes and Losses Report
Administrative Offenses
1. Violations by any covered person, its directors, officers or employees of: (i) the AMLA, as amended;
and (ii) Revised Implementing Rules and regulations.
2. Failure or refusal by any of the said persons to comply with AMLC orders, resolutions and issuances
Sanctions:
1. Warning or reprimand
2. Monetary Penalty of fine that is with the range of not more than Php500 thousand.
3. Fine of 200% of the value of the monetary instrument or property in cases of money
laundering and the covered person participated therein.

Other Offenses under RA 9160,as amended

Safe Harbor Provision
- When reporting covered or suspicious transactions to the AMLC, covered persons and their
officers shall not be deemed to have violated Republic Act No. 1405, as amended, Republic Act
No. 6426, as amended, republic Act No. 8791 and other similar laws.
(Sec. 9, AMLA)

- 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 this Act or any other law.
Crimes and Losses Report (BSP Cir. 587)
- A type of report required to be submitted to BSP for any crime or transaction related loss.

1. To BSP Supervisory Data Center (SDC) & BSP Security, Investigation and Transport
Department (SITD)

2. Shall submit initial report within (10) calendar days from knowledge of the
crime/incident.

3. Shall submit final report not later than twenty (20) calendar days from
termination of investigation.

Reportable under Crimes and Losses

9. Insider
1. Estafa
10. Outsider
2. Theft
11. Perpetrator
3. Robbery
12. Victim
4. Falsification
13. Attempted Crime
5. Credit Card Related
14. Frustrated Crime
6. Other Crimes that may Cause Loss to the Bank
15. Consummated Crime
7. Negligence
16. Termination of the Investigation
8. Non-Crime Related Loss
OFAC
Office of FINANCIAL ASSETS & CONTROL
Office of Financial Assets & Control
(OFAC)
It administers and enforces economic and trade sanctions based on US foreign policy and
national security goals against targeted foreign countries and regimes, terrorists, international
narcotics traffickers, those engaged in activities related to the proliferation of weapons of mass
destruction, and other threats to the national security, foreign policy or economy of the United
States.

Sanctioned Countries
FATF
Financial Action Task Force
Financial Action Task Force (FATF)
An international body based in Paris, France formed by G-7 in 1989 with a mission
of paving the way for the effective prevention and detection of money laundering,
and later to include terrorism financing, by ensuring that appropriate measures
against money laundering, and terrorism financing, are implemented in all nations.

High-Risk and Non-cooperative jurisdictions:

Red font – Call for Action

Orange – On-going Process (Other Monitored Jurisdictions)
 “Compliance is a
Universal Responsibility”
Thank you.