Amlac: What Is Money Laundering?

AMLAC
What is Money Laundering?

-RA 9160 (Anti-Money Laundering Act of 2001 [AMLA]) Sec. 4: Money laundering is a
CRIME whereby the proceeds of an unlawful activity as herein defined are
TRANSACTED, thereby making them appear to have originated from legitimate sources
What is Anti-Money Laundering?
-Anti-money laundering (AML) refers to all policies and pieces of legislation that force
financial institutions to monitor their clients to prevent money laundering. AML laws
require that financial institutions report any financial crime they detect to relevant
regulators.
Financial Action Task Force
-was responsible for the creation of most anti-money laundering standards, and it made
a framework for countries to follow.
Combating the Financing of Terrorism (CFT)
-refers to a set of standards and regulatory systems intended to prevent terrorist groups
from laundering money through the banking system or other financial networks
The Anti-Money Laundering Act
-The Anti-Money Laundering Act of 2001 (AMLA) is the primary AML/CFT law in the
Philippines. The AMLA investigates money laundering and other financial crimes to
protect financial institutions and deter criminals from making the Philippines a money
laundering site for criminal proceeds.
As a member of the Asia/Pacific Group, the FATF-style body for the region, the
Philippines is committed to implementing FATF’s Recommendations through the
provisions set out in the Act. Accordingly, fintechs are required to develop and
implement a risk-based AML program, conducting risk-assessments of their customers
and deploying an AML/CFT response commensurate with that risk.
AML Transaction Monitoring
-The Anti-Money Laundering Act 2001 generally requires fintechs and other obligated
institutions to monitor customer transactions on an ongoing basis in order to detect
suspicious activity and prevent money laundering.
The transaction monitoring process mandated by the Anti-Money Laundering Act should
focus on a range of specific characteristics, including:
 Suspicious transaction patterns
 Unusually complex transactions that do not fit a customer’s usual financial
behavior.
 Transactions deliberately structured to avoid reporting thresholds.
 Transactions involving high-risk countries.
 Transactions involving politically exposed persons (PEPs) or persons on
sanctions/watch lists.
Payment Sanctions Screening
-Under the Anti-Money Laundering Act, fintechs must screen customers and their
transactions against international sanctions lists and watchlists to ensure that they are
not involved in terrorism or connected to terrorist organizations.
Covered Institutions
-Banks, offshore banking units, quasi-banks, trust entities, nonstock savings and loan
associations, pawnshops, and all other institutions, including their subsidiaries and
affiliates supervised and/or regulated by the Bangko Sentral ng Pilipinas (BSP)
-Insurance companies, insurance agents, insurance brokers, professional reinsurers,
reinsurance brokers, holding companies, holding company systems and all other
persons and entities supervised and/or regulated by the Insurance Commission (IC).
Covered Transactions
is a transaction in cash or other equivalent monetary instrument involving a total amount
in excess of five hundred thousand pesos (php500,000.00) within one (1) banking day.
Suspicious transaction
1. There is no underlying legal or trade obligation, purpose or economic justification;
2. The client is not properly identified;
3. The amount involved is not commensurate with the business or financial capacity of
the client;
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 act;
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;
6. The transaction is in any way related to an unlawful activity or any money laundering
activity or offense under this act that is about to be, is being or has been committed; or
7. Any transaction that is similar, analogous or identical to any of the foregoing.
Money Laundering Offenses/Penalties
-Knowingly transacting or attempting to transact any monetary instrument/property
which represents, involves or relates to the proceeds of an unlawful activity. Penalty is 7
to 14 years imprisonment and a fine of not less than 3 Million Pesos but not more than twice the
value of the monetary instrument/property.
-Any person knowing that any monetary instrument or property involves the proceeds of any
unlawful activity, performs or fails to perform any act as a result of which he facilitates the
offense of money laundering. The penalty of imprisonment from four (4) to seven (7) years and
a fine of not less than One Million Five Hundred Thousand Philippine Pesos (Php1,500,000.00)
but not more than Three Million Philippine Pesos (Php3,000,000.00), shall be imposed upon a
person convicted under Section 4 (b) of the AMLA.
-Any person knowing that any monetary instrument or property is required under this Act to be
disclosed and filed with the Anti-Money Laundering Council (AMLC), fails to do so. The penalty
of imprisonment from six (6) months to four (4) years or a fine of not less than One Hundred
Thousand Philippine Pesos (Php100,000.00) but not more than Five Hundred Thousand
Philippine Pesos (Php500,000.00), or both, shall be imposed on a person convicted under
Section 4(c) of the AMLA
Other Offences under RA 9160
Failure to Keep Records. - The penalty of imprisonment from six (6) months to one (1)
year or a fine of not less than One Hundred Thousand Philippine Pesos
(Php100,000.00) but not more than Five Hundred Thousand Philippine Pesos
(Php500,000.00), or both, shall be imposed on a person.
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 shall be subject to a penalty of six (6) months to four (4) years
imprisonment and a fine of not less than One Hundred Thousand Philippine Pesos
(Php100, 000.00) but not more than Five Hundred Thousand Philippine Pesos (Php500,
000.00), at the discretion of the court
Breach of Confidentiality. - The punishment of imprisonment ranging from three (3) to
eight (8) years and a fine of not less than Five Hundred Thousand Philippine Pesos
(Php500,000.00) but not more than One Million Philippine Pesos (Php1,000,000.00),
shall be imposed on a person convicted for a violation.
Jurisdiction of Money Laundering
REGIONAL TRIAL COURTS shall have jurisdiction to all try cases on money
Laundering
SANDIGANBAYAN shall try and decide violations committed by the public officers and
private persons who are in conspiracy with such public officers
Onboarding and Monitoring
AML in the Philippines requires fintechs to verify their customers’ identities and ensure
they are being truthful about the nature of their business. In practice, this means that
firms should implement suitable customer due diligence measures (CDD).
Upcoming Regulations
In addition to the proposed revisions to the Anti-Money Laundering Act, the Philippines
government is in the process of rolling out a national ID system.
Anti-Money Laundering Council (AMLC) - was created pursuant to Republic Act No.
9160, otherwise known as the “Anti-Money Laundering Act of 2001” (AMLA), to protect
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.
AMLC Vision - To be a world-class financial intelligence unit that will help establish and
maintain an internationally compliant and effective anti-money laundering regime which
will provide the Filipino people with a sound, dynamic, and strong financial system in an
environment conducive to the promotion of social justice, political stability, and
sustainable economic growth. Towards this goal, the AMLC shall, without fear or favor,
investigate and cause the prosecution of money laundering offenses.
Mission -
To protect and preserve the integrity and confidentiality of bank accounts
To ensure that the Philippines shall not be used as a money laundering site for
proceeds of any unlawful activity
To extend cooperation in transnational investigation and prosecution of persons

involved in money laundering activities, wherever committed
Organization - The AMLC is composed of the Governor of the Bangko Sentral ng

Pilipinas as Chairman, and the Commissioner of the Insurance Commission and the
Chairman of the Securities and Exchange Commission as members. It acts
unanimously in the discharge of its functions.The AMLC is assisted by a Secretariat
headed by an Executive Director.

The Council
BENJAMIN E. DIOKNO, PhD -Chairman, AMLC
ATTY. DENNIS B. FUNA -Member, AMLC
ATTY. EMILIO B. AQUINO - Member, AMLC
ATTY. MEL GEORGIE B. RACELA - Executive Director (Secretariat)
Powers of the AMLC

Authority to Initiate Investigations on the Basis of Voluntary Citizens’ Complaints and
Government Agency Referrals.
Authority to Initiate Investigations on the Basis of Covered Transaction Reports.
Authority to Freeze Accounts
Authority to Inquire into Accounts
Authority to Institute Civil Forfeiture Proceedings
Authority to Assist the United Nations and other International Organizations and Foreign
States
Authority to Develop and Implement Educational Programs
Authority to Issue, Clarify and Amend the Rules and Regulations Implementing R. A.
No. 9160
Authority to Establish Information Sharing System
Freeze Order
The AMLC may file a freeze order on an account or property related to an unlawful
activity. The freeze order shall last for a period of 20 days unless extended by the court.

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AMLAC

What is Money Laundering?

To extend cooperation in transnational investigation and prosecution of persons

Organization - The AMLC is composed of the Governor of the Bangko Sentral ng

BENJAMIN E. DIOKNO, PhD -Chairman, AMLC

ATTY. DENNIS B. FUNA -Member, AMLC

ATTY. EMILIO B. AQUINO - Member, AMLC

ATTY. MEL GEORGIE B. RACELA - Executive Director (Secretariat)

Powers of the AMLC

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