I.

POLICY OF THE LAW

R.A. 1960 states that the purpose of this law is:

 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 the proceeds of any unlawful activity. Consistent with its foreign policy,
the State shall extend cooperation in transnational investigations and
prosecutions of persons involved in money laundering activities wherever
committed.

 R.A. 11521 (2021 Amendment) adds the implementation of targeted

financial sanctions related to the financing of the proliferation of weapons of
mass destruction, terrorism, and financing of terrorism, pursuant to the
resolution of the United Nations Security Council."

II. HISTORY OF THE ACT

 Republic Act No. 9160 otherwise known as The Anti-Money Laundering Act
of 2001 was signed into law on September 29, 2001, and took effect on
October 17, 2001.

 The implementing Rules and Regulations took effect on April 2, 2002. On

March 7, 2003, R.A. No. 9194 (An Act Amending R.A. No. 9160) was signed
into law and took effect on March 23, 2003.

 The revised Implementing Rules and Regulations took effect on September

7, 2003.

 The most recent amendments include R.A. No. 10365 in 2012, R.A. No.
10927 in 2016, and R.A. No. 11521 in 2021.

III. SALIENT FEATURES

1. Criminalizes money laundering

2. Creates a financial intelligence unit
3. Imposes requirements on customer identification, record keeping and
reporting of covered and suspicious transactions
4. Relaxes strict bank deposit secrecy laws
5. Provides for bank inquiry and freeze ex parte
petition/seizure/forfeiture/recovery of dirty money/property
6. Provides for international cooperation
IV. DEFINITION

Money Laundering is a crime whereby the proceeds of an unlawful activity as

defined in the AMLA are transacted or attempted to be transacted to make
them appear to have originated from legitimate sources.

V. COVERED INSTITUTIONS & PERSONS:

R.A. 9160 (Original or enacted AMLA)

(a) “Covered institution” refers to:

(1) banks, non-banks, quasi-banks, trust entities, and all other institutions
and their subsidiaries and affiliates supervised or regulated by the Bangko
Sentral ng Pilipinas (BSP);

(2) insurance companies and all other institutions supervised or regulated by

the Insurance Commission; and

(3) (i) securities dealers, brokers, salesmen, investment houses and other
similar entities managing securities or rendering services as investment agent,
advisor, or consultant, (ii) mutual funds, closed-end investment companies,
common trust funds, pre-need companies and other similar entities, (iii) foreign
exchange corporations, money changers, money payment, remittance, and
transfer companies and other similar entities, and (iv) other entities
administering or otherwise dealing in currency, commodities or financial
derivatives based thereon, valuable objects, cash substitutes and other similar
monetary instruments or property supervised or regulated by Securities and
Exchange Commission.

R.A. 10365 (Added the term Covered Persons and thus included natural
persons such as jewelry dealers, company service providers, etc.)

It included natural persons to the abovementioned covered institutions and

reads as “covered persons” natural or juridical refer to:

“(4) jewelry dealers in precious metals, who, as a business, trade in precious

metals, for transactions in excess of One million pesos (P1,000,000.00);

“(5) jewelry dealers in precious stones, who, as a business, trade in precious

stones, for transactions in excess of One million pesos (P1,000,000.00);

“(6) company service providers which, as a business, provide any of the

following services to third parties:
 (i) acting as a formation agent of juridical persons;
(ii) acting as (or arranging for another person to act as) a director or
corporate secretary of a company, a partner of a partnership, or a
similar position in relation to other juridical persons;
(iii) providing a registered office, business address or accommodation,
correspondence or administrative address for a company, a
partnership or any other legal person or arrangement; and
(iv) acting as (or arranging for another person to act as) a nominee
shareholder for another person; and

“(7) persons who provide any of the following services:

(i) managing of client money, securities or other assets;

(ii) management of bank, savings or securities accounts;

(iii) organization of contributions for the creation, operation or management of

companies; and

(iv) creation, operation or management of juridical persons or arrangements,

and buying and selling business entities.

“Notwithstanding the foregoing, the term ‘covered persons’ shall exclude

lawyers and accountants acting as independent legal professionals in relation
to information concerning their clients or where disclosure of information
would compromise client confidences or the attorney-client relationship:
Provided, That these lawyers and accountants are authorized to practice in the
Philippines and shall continue to be subject to the provisions of their respective
codes of conduct and/or professional responsibility or any of its amendments.”

R.A. 10927 (Included Casinos)

“(8) casinos, including internet and ship-based casinos, with respect to their
casino cash transactiotus related to they gaming operations.

R.A. 11521 (Included Real Estate Developers and Brokers)

(a) Covered persons', natural or juridical refer to:

"(1) x x x;

"(9) Real estate developers and brokers;

"(10) Offshore gaming operation, as well as their service providers, supervised,
accredited or regulated by the Philippine Amusement and Gaming Corporation
(PAGCOR) or any government agency;

VI. COVERED TRANSACTIONS

R.A. No. 9160

Originally provides that a transaction of 4M within 5 banking days is a

covered transaction except if dealing with a properly identified client and
the amount is commensurate with the business or financial capacity of
the client or those with an underlying legal or trade obligation, purpose,
origin or economic justification. It states:

“Covered transaction” is a single, series, or combination of transactions

involving a total amount in excess of Four million Philippine pesos
(Php4,000,000.00) or an equivalent amount in foreign currency based on
the prevailing exchange rate within five (5) consecutive banking days
except those between a covered institution and a person who, at the time
of the transaction was a properly identified client and the amount is
commensurate with the business or financial capacity of the client; or
those with an underlying legal or trade obligation, purpose, origin or
economic justification.

The second paragraph refers to a single, series or combination, or pattern

of unusually large and complex transactions in excess of 4M especially
cash deposits having no credible purpose or origin, underlying trade
obligation or contract. It states:

It likewise refers to a single, series or combination or pattern of

unusually large and complex transactions in excess of Four million
Philippine pesos (Php4,000,000.00) especially cash deposits and
investments having no credible purpose or origin, underlying trade
obligation or contract.

R.A. 9194

Amended it to include a transaction in cash or other equivalent monetary

instrument involving a total amount in excess of Five hundred thousand
pesos (P500,000.00) within one (1) banking day.”

R.A. 11521

Further amended the provision on Covered Transactions stating that

single casino transactions involving an amount in excess of Five million
pesos (P5,000,000.00) or its equivalent in any other currency are deemed
Covered Transactions.

While for Real estate developers and brokers a single cash transaction
involving an amount in excess of Seven million five hundred thousand
pesos (P7,500,000.00) or its equivalent in any other currency are also
deemed Covered Transactions.

SUMMARY:

1. Cash Transactions: Any cash transaction that exceeds PHP 500,000

within a single banking day, whether conducted in a single operation or
in several operations that appear to be linked.
2. Casino Transactions: AMLA also casts its net over casino transactions,
wherein any casino cash transaction that exceeds PHP 5,000,000 or its
equivalent in any other currency is deemed a covered transaction.
3. Transactions with Dealers: Engagements with jewelry dealers, dealers
in precious metals, and dealers in precious stones involving cash or
equivalent monetary instruments exceeding PHP 1,000,000 are also
brought under the AMLA’s scrutiny.
4. Electronic Transfers: Electronic funds transfers that are not conducted
through a physical transfer of currency also fall under the purview of
covered transactions when they surpass the specified threshold.
5. Investment-Related Transactions: Transactions related to investments,
securities, and other financial instruments that exceed the defined
monetary limit are also subject to reporting under AMLA.

VII. SUSPICIOUS TRANSACTIONS:

The amendment under R.A. 9194 and 11521 likewise inserted a provision
for Suspicious Transactions which reads:

SECTION 2. Section 3 of the same Act is further amended by inserting between

paragraphs (b) and (c) a new paragraph designated as (b-1) to read as follows:

“(b-1) ‘Suspicious transaction’ are transactions with covered institutions,

regardless of the amounts involved, where any of the following circumstances
exist:

“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 offense

under this Act that is about to be, is being or has been committed; or

“7. any transaction that is similar or analogous to any of the foregoing.”

VIII. MONEY LAUNDERING OFFENSES AND PENALTIES

1.) Knowingly transacting or attempting to transact any monetary

instrument/property which represents, involves, or relates to the
proceeds of an unlawful activity. The penalty is 7 to 14 years
imprisonment and a fine of not less than P3M but not more than twice
the value of the monetary instrument/property.

2.) Knowingly performing or failing to perform an act in relation to any

monetary instrument/property involving the proceeds of any unlawful
activity as a result of which he facilitated the offense of money
laundering. Penalty is 4 to 7 years 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/property required to be disclosed and filed. Penalty is 6
months to 4 years imprisonment or a fine of not less than P100,000 but
not more than P500,000, or both.

Unlawful Activity is the offense which generates dirty money or property. It is

commonly called the predicate crime. It refers to any act or omission or series
or combination thereof involving or having direct relation to the following:

IX. PREDICATE CRIMES/UNLAWFUL ACTIVITIES

 Kidnapping for ransom

 Drug trafficking and related offenses
 Graft and corrupt practices
  Plunder
 Robbery and Extortion
 Jueteng and Masiao
 Piracy
 Qualified theft
 Swindling
 Smuggling
 Violations under the Electronic Commerce Act of 2000
 Hijacking; destructive arson; and murder, including those perpetrated by
terrorists against non-combatant persons and similar targets
 Fraudulent practices and other violations under the Securities
Regulation Code of 2000
 Felonies or offenses of a similar nature that are punishable under the
penal laws of other countries.
 Terrorism financing and organizing or directing others to commit
terrorism financing (R.A. 10168).
 Attempt/conspiracy to commit terrorism financing and organizing or
directing others to commit terrorism financing (R.A. 10168).
 Attempt/conspiracy to commit dealing with property or funds of
designated person.
 Accomplice to terrorism financing or conspiracy to commit terrorism
financing.
 Accessory to terrorism financing.

X. OTHER OFFENSES/PENALTIES

1.) 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 all transactions of said institution, including closed
accounts, for five (5) years from the date of the transaction/closure of the
account. The penalty is 6 months to 1 year imprisonment or a fine of not
less than P100,000 but not more than P500,000, or both.

2.) Malicious reporting is committed by any person who, with malice or in

bad faith, reports/files completely unwarranted or false information
relative to money laundering transactions against any person. The
penalty is 6 months to 4 years imprisonment and a fine of not less than
P100,000 but not more than P500,000, at the discretion of the court. The
offender is not entitled to avail the benefits of the Probation Law.

 If the offender is a corporation, association, partnership or any juridical

person, the penalty shall be imposed upon the responsible officers, as
the case may be, who participated in, or allowed by their gross
negligence, the commission of the crime.
  If the offender is a juridical person, the court may suspend or revoke
their license.

 If the offender is an alien, he shall, in addition to the penalties

prescribed, be deported without further proceedings after serving the
penalties prescribed.

 If the offender is a public official or employee, he shall, in addition to the

penalties prescribed, suffer perpetual or temporary absolute
disqualification from office, as the case may be.

XI. BREACH OF CONFIDENTIALITY

When reporting covered or suspicious transactions to the AMLC, covered

institutions and their officers/employees are prohibited from communicating
directly or indirectly, in any manner or by any means, to any
person/entity/media, the fact that such report was made, the contents thereof,
or any other information in relation thereto.

In case of violation thereof, the concerned official and employee of the

covered institution shall be criminally liable. Neither may such reporting be
published or aired in any manner or form by the mass media, electronic mail or
other similar devices. In case of a breach of confidentiality published or
reported by media, the responsible reporter, writer, president, publisher,
manager and editor-in-chief shall also be held criminally liable. Penalty is 3 to
8 years imprisonment and a fine of not less than P500,000 but not more than
P1M.

XII. SAFE HARBOR PROVISION

No administrative, criminal or civil proceedings shall lie against any person for
having made a CTR (Covered Transactions Report) or an STR(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, as amended, its RIRR or any other law.

XIII. JURISDICTION OF

XIV. FREEZE ORDER

REPUBLIC ACT No. 1405

AN ACT PROHIBITING DISCLOSURE OF OR INQUIRY INTO, DEPOSITS

WITH ANY BANKING INSTITUTION AND PROVIDING PENALTY THEREFOR
(Secrecy of Bank Deposits Law)
I. PURPOSE

To give encouragement to the people to deposit their money in banking

institutions and to discourage private hoarding so that the same may be
properly utilized by banks in authorized loans to assist in the economic
development of the country.

II. PROHIBITED ACTS

1. All deposits of whatever nature may not be examined, inquired into, or

looked into by any person etc. except upon written permission of the
depositor or in case of impeachment or upon order of a competent court
in cases of bribery or dereliction of duty of public officials or in cases
where the money deposited or invested is the subject matter of the
litigation.

Section 2. 1 All deposits of whatever nature with banks or banking

institutions in the Philippines including investments in bonds issued by
the Government of the Philippines, its political subdivisions and its
instrumentalities, are hereby considered as of an absolutely
confidential nature and may not be examined, inquired or looked into
by any person, government official, bureau or office, except upon
written permission of the depositor, or in cases of impeachment, or
upon order of a competent court in cases of bribery or dereliction of
duty of public officials, or in cases where the money deposited or
invested is the subject matter of the litigation.

2. Cannot disclose any information except in those mentioned in the first

section any information concerning said deposits

Section 3. It shall be unlawful for any official or employee of a banking

institution to disclose to any person other than those mentioned in Section two
hereof any information concerning said deposits.

III. DEPOSITS COVERED

All deposits of whatever nature with banks or banking institutions in the

Philippines including investments in bonds issued by the Government of the
Philippines, its political subdivisions and its instrumentalities.

IV.

REPUBLIC ACT NO. 8792

AN ACT PROVIDING FOR THE RECOGNITION AND USE OF ELECTRONIC
COMMERCIAL AND NON-COMMERCIAL TRANSACTIONS, PENALTIES
FOR UNLAWFUL USE THEREOF, AND OTHER PURPOSES

I. Legal Recognition of Electronic Data Messages:

SECTION 6(6). Legal Recognition of Electronic Data Message. — Information

shall not be denied validity or enforceability solely on the ground that it is in
the form of an electronic data message purporting to give rise to such legal
effect, or that it is merely incorporated by reference in that electronic data
message.

SECTION 7(7). Legal Recognition of Electronic Documents

Electronic documents shall have the legal effect, validity or enforceability as
any other document or legal writing, and —

(a) Where the law requires a document to be in writing, that requirement is met
by an electronic document if the said electronic document maintains its
integrity and reliability and can be authenticated so as to be usable for
subsequent reference, in that —

(i) The electronic document has remained complete and unaltered,

apart from the addition of any endorsement and any authorized
change, or any change which arises in the normal course of
communication, storage and display; and

(ii) The electronic document is reliable in the light of the purpose for
which it was generated and in the light of all relevant circumstances.

(b) Paragraph (a) applies whether the requirement therein is in the form of an
obligation or whether the law simply provides consequences for the document
not being presented or retained in its original form.

(c) Where the law requires that a document be presented or retained in its
original form, that requirement is met by an electronic document if —

i) There exist a reliable assurance as to the integrity of the document

from the time when it was first generated in its final form; and

ii) That document is capable of being displayed to the person to whom it

is to be presented: Provided, That no provision of this Act shall apply to
vary any and all requirements of existing laws on formalities required in
the execution of documents for their validity.
For evidentiary purposes, an electronic document shall be the functional
equivalent of a written document under existing laws.

This Act does not modify any statutory rule relating to the admissibility of
electronic data messages or electronic documents, except the rules relating to
authentication and best evidence.

SECTION 8(8). Legal Recognition of Electronic Signatures

An electronic signature on the electronic document shall be equivalent to the

signature of a person on a written document if the signature is an electronic
signature and proved by showing that a prescribed procedure, not alterable by
the parties interested in the electronic document, existed under which
a.) A method is used to identify the party sought to be bound and to indicate
said party’s access to the electronic document necessary for his consent or
approval through the electronic signature;
b.) Said method is reliable and appropriate for the purpose for which the
electronic document was generated or communicated, in the light of all
circumstances, including any relevant agreement;
c.) It is necessary for the party sought to be bound, in order to proceed further
with the transaction, to have executed or provided the electronic signature; and
d.) The other party is authorized and enabled to verify the electronic signature
and to make the decision to proceed with the transaction authenticated by the
same.

SECTION 9(9). Presumption Relating to Electronic Signatures

In any proceedings involving an electronic signature, it shall be presumed that

a.) The electronic signature is the signature of the person to whom it

correlates; and

b.) The electronic signature was affixed by that person with the intention
of signing or approving the electronic document unless the person relying
on the electronically signed electronic document knows or has notice of
defects in or unreliability of the signature or reliance on the electronic
signature is not reasonable under the circumstances.

SECTION 12(12). Admissibility and Evidential Weight of Electronic Data

Messages or Electronic Documents
In any legal proceedings, nothing in the application of the rules on evidence
shall deny the admissibility of an electronic data message or electronic
document in evidence —
a. On the sole ground that it is in electronic form; or

b. On the ground that it is not in the standard written form, and the
electronic data message or electronic document meeting, and
complying with the requirements under Sections 6 or 7 hereof shall be
the best evidence of the agreement and transaction contained therein.

In assessing the evidential weight of an electronic data message or electronic

document, the reliability of the manner in which it was generated, stored or
communicated, the reliability of the manner in which its originator was
identified, and other relevant factor shall be given due regard.

SECTION 31(30). Lawful Access

Access to an electronic file, or an electronic signature of an electronic data

message or electronic document shall only be authorized and enforced in favor
of the individual or entity having a legal right to the possession or the use of
the plaintext, electronic signature or file and solely for the authorized purposes.
The electronic key for identity or integrity shall not be made available to any
person or party without the consent of the individual or entity in lawful
possession of that electronic key.

SECTION 32(31). Obligation of Confidentiality

Except for the purposes authorized under this Act, any person who obtained
access to any electronic key, electronic data message or electronic document,
book, register, correspondence, information, or other material pursuant to any
powers conferred under this Act, shall not convey to or share the same with
any other person.