Introduction

to the AMLA
by

Atty. __
 •  The Financial Action Task Force (FATF), an inter-governmental body
that set standards and promote effective implementation of legal,
regulatory and operational measures for combating money laundering,
terrorist financing and other related threats to the integrity of the
international financial system, issued a warning that it will impose
sanctions on the if no anti-money laundering law (AML) is passed by
September 30, 2001 by countries identified in the Non-Cooperative
Country and Territories (NCCT) List including the Philippines.

• The Philippines, while not a member of the FATF, is a member of the

History Asia/Pacific Group on Money Laundering (APG), an affiliate of FATF and
created pursuant to FATF’s mandate. APG’s role is to ensure the
adoption, implementation and enforcement of internationally accepted
anti-money laundering and counter-terrorist financing standards as set
out in the FATF Forty Recommendations and FATF Eight Special
Recommendations.

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 • The sanctions to be imposed include countermeasures by FATF member
countries and affiliates to heavily scrutinize all transactions from NCCT
countries.

• To illustrate the effect of the sanctions, former BSP Gov. Gen. Buenaventura
said that ordinary/normal transactions on deposit accounts, remittances,
import and export trade would now be flagged for further verification and
result in significant delays. Such flagging would force the country to handle
transactions manually instead of automatically which, in the long run, will

History prove the Philippines to be uncompetitive and unattractive to investors.

• On September 29, 2001, Republic Act No. 9160 or the “Act defining the Crime
of Money Laundering, Providing Penalties therefor and Other Purposes” or
AMLA was signed into law and became effective on October 17, 2001.

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 • Despite the passage of the law, the Philippines was not delisted from the
NCCT because the AMLA (1) only required reporting of P4Million and
above suspicious transactions and (2) was made inapplicable to deposits
and investments prior to 2001, provisions which were inconsistent with the
FATF standards.

• FATF gave another ultimatum to the Philippines to make the adjustments

by March 15, 2003 otherwise additional countermeasures would be enacted.

History • Sen. Magsaysay, Chairman of the Committee on Banks, stressed the urgency
of amendments. Atty. Aquino, then ED of the AMLC, gave the example that
the Republic of the Marshall Islands was sanctioned by the international
banking community such that they could not send money through
remittances but only through mail, which could be devastating for the
Philippines that relies heavily on remittances.

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 RA 9194 (First Amendment in 2003)
•The major amendments, among others, included lowering the threshold
amount for single covered transactions (cash or other equivalent monetary
instrument) from P4 million to P500, 000 within one banking day; expanded
financial institution reporting requirements to include the reporting of
suspicious transactions/activities and authorized AMLC to inquire into or
examine any particular deposit or investment, with any banking institution or
non-bank financial institution and their subsidiaries and affiliates upon order of
any competent court in cases of violation of the law, when it has been
established that there is probable cause that the deposits or investments are
History related to an unlawful activity.

•In February 2005, FATF de-listed the Philippines from its NCCT list but
continued to monitor the country as part of the FATF’s standard monitoring
process for de-listed NCCTs. The monitoring officially ended in February 2006.

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 RA 10167 (Second Amendment in 2012)

•In light of the case of AMLC vs. Antonio Eugenio, Jr., (2008), secs.
10 [Authority to Freeze. – Upon determination that probable cause
exists that any deposit or similar account is in any way related to an
unlawful activity, the AMLC may issue a freeze order, which shall be
History effective immediately x x x] and 11 [the AMLC may inquire into or
examine any particular deposit or investment with any banking
institution or non-bank financial institution upon order of any
competent court in cases of violation of this Act when it has been
established that there is probable cause] were amended to require
ex parte bank inquiries and that the freeze order was only for six (6)
months.

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 RA 10365 (Third Amendment in 2012)
•The amendments, among others, (1) expanded the term “covered
persons” which covers not only institutions but also single
proprietorships, GPPs and partnerships; (2) included jewelry dealers in
covered persons for precious gems P1M and above; and (3) required the
LRA to report real estaste purchases above P500k.

RA 10927 (Fourth amendment in 2015)

History •The amendments, among others, expanded the term “covered persons”
to casinos, including internet and ship-based casinos, with respect to
their casino cash transactions related to they gaming operations among
covered persons and expanded the term “covered transactions” to a
single casino transaction involving an amount in excess of Five million
pesos (₱5,000,000.00) or its equivalent in any other currency.

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 RA 9160 - AMLA
(as amended by RA 9194, RA 10167, RA 10365, and RA 10927)

Sec. 1 – Short Title - This Act shall be known as the "Anti-Money

Laundering Act of 2001
Sec. 2- Declaration of State Policies
Sec. 3 – Definition of Terms
AMLA Sec. 4 – Money Laundering as defined
Sec. 5 – Jurisdiction of Money Laundering Cases
Sec. 6 – Prosecution of Money Laundering
Sec. 7 - Creation of Anti-Money Laundering Council (AMLC)
Sec. 8 - Creation of a Secretariat
Sec. 9 - Prevention of Money Laundering; Customer Identification
Requirements and Record Keeping

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 Money Laundering is an act, series or combination of acts whereby
proceeds of an unlawful activity, whether in cash or in property or
other assets, are converted, concealed, or disguised to make them
appear to have originated from legitimate sources. Money laundering is
also committed by any covered person who, knowing that a covered or
suspicious transaction is required under AMLA to be reported to the
Anti Money Laundering Council (AMLC) fails to do so. (AMLA, Sec. 4)
The stages of money laundering involve:

AMLA 1.Placement – disposal of cash proceeds derived from illegal activity

[i.e. deposit into different accounts, multiple cash deposits of smaller
amounts, buying of monetary instruments, international fund transfers
et al.]
2.Layering – involves separating the illicit proceeds from their source
by creating complex layers of financial transactions designed to
disguise trail audit and provide anonymity
3.Integration – provides appearance of legitimacy to criminally-derived
wealth.

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AMLA

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 “Covered Persons” refers to:
(a)The following financial institutions:

1) Persons supervised and/or regulated by BSP, including their subsidiaries

and affiliates, which are also covered persons, supervised and/or regulated
by the BSP such as: (a) Banks; (b) Quasi-banks; (c) Trust entities (d)
Pawnshops; (e) Non-stock savings and loan associations; (f) Other Non-
bank financial institutions which under special laws are subject to BSP
supervision and/or regulation; (g) Electronic money issuers; and (h)
Foreign exchange dealers, money changers, and remittance and transfer
companies.
AMLA 2) Persons supervised or regulated by IC, such as: (a) Insurance companies;
(b) Pre-need companies; (c) Insurance agents; (d) Insurance brokers; (e)
Professional reinsurers; (f) Reinsurance brokers; (g) Holding companies;
(h) Holding company systems; (i) Mutual benefit associations; and (j) All
other persons and their subsidiaries and affiliates supervised or regulated
by the IC. (Rule 4, Sec. 1, 2018 IRR)

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 “Covered Persons” refers to:
(a)The following financial institutions:

(3) Persons supervised or regulated by SEC, such as: (a) Securities dealers, brokers,
salesmen, investment houses, and other similar persons managing securities or rendering
services, such as investment agents, advisors, or consultants; (b) mutual funds or open-
end investment companies, close-end investment companies or issuers, and other similar
entities; and (c) other entities, administering or otherwise dealing in commodities, or
financial derivatives based thereon, valuable objects, cash substitutes, and other similar
monetary instruments or properties, supervised or regulated by the SEC

(4) The following DNFBs: (1) Jewelry dealers. (2) Dealers in precious metals, and dealers
AMLA in precious stones. (3) Company service providers, which, as a business, provide any of
the following services to third parties: (a) acting as a formation agent of juridical persons;
(b) 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; (c) providing a registered office; business address or accommodation,
correspondence or administrative address for a company, a partnership or any other
juridical person or legal arrangement; and (d) acting as (or arranging for another person
to act as) a nominee shareholder for another person. (Rule 4, Sec. 1, 2018 IRR)

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 “Covered Persons” refers to:
(a)The following financial institutions:

(5) Persons, including lawyers, accountants and other

professionals, who provide any of the following services: (a)
Managing of client money, securities or other assets; (b)
Management of bank, savings, securities or other assets; (c)
AMLA Organization of contributions for the creation, operation or
management of companies; and (d) Creation, operation or
management of juridical persons or arrangements, and buying
and selling business entities.

(6) Casinos, including internet-based casinos and ship-based

casinos, with respect to their casino cash transactions related
to their gaming operations. (Rule 4, Sec. 1, 2018 IRR)

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 “Suspicious Circumstance” refers to a transaction, regardless of
amount, where any of the suspicious circumstances exist:
1.There is no underlying legal or trade obligation;

2.The client is not properly identified;

3.The amount involved is not commensurate with the business or capacity

of the client;
4.Taking everything in consideration, client’s transaction is to avoid AMLA
reporting

AMLA 5.Past transactions do not justify /deviate from the current transaction

6.Transaction relates to an unlawful activity or any money laundering

activity about to be committed, is being or has been committed;
7.Analogous circumstances (Rule 2, Sec. 1, 2018 IRR)

“Suspicious Transaction” refers to a transaction, regardless of

amount, where any of the suspicious circumstances, as herein defined, is
determined, based on suspicion or, if available, reasonable grounds, to be
existing.” (Rule 2, Sec. 1, 2018 IRR)

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 “Covered transaction” refers to (1) a transaction in cash or
other monetary equivalent exceeding P500,000.00 (2) a
transaction exceeding P1,000,000.00 in cases of jewelry dealers,
dealers in precious metals or stones (3) a covered transaction is a
single casino cash transaction involving an amount in excess of
P5,000,000.00 or its equivalent in other currency. (Rule 4, Sec. 1,
2018 IRR)

AMLA “Unlawful Activity” refers to any act or omission, or series or

combination thereof, involving or having direct relation, to the
following: Kidnapping for Ransom, Comprehensive Dangerous
Drugs Act, Anti-Graft and Corrupt Practices, Plunder, Robbery,
Jueteng, Robbery and Extortion, Piracy, Qualified Theft,
Swindling, Smuggling, Violations of the E-Commerce Act, Hi-
Jacking, Terrorism, Bribery, offenses similar to the above, et al
(34). (Rule 3, Sec. 1, 2018 IRR)

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 The AMLA, its IRR as well as the Terrorism Financing Prevention
and Suppression Act (TFPSA) of 2012 impose anti-money
laundering obligations on covered persons, to wit:
1.Report to AMLC all covered transactions and all suspicious
transactions within 5 working days;
2.Prohibition of anonymous accounts;

DUTIES 3.Keeping records of all transactions for 5 years;

4.Conducting a KYC or customer due diligence;
OF 5.Provide criteria for customers;
COVERED 6.Monitoring of on-going customers;
PERSONS 7.Registering with AMLC’s electronic reporting system;
8.Recording of immediate family members;
9.Give AMLC full access to all information pertaining to transaction;
10.Provide system of flagging suspicious activities

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 The AMLC was created pursuant to the AMLA, to ensure that the
Philippines shall not be used to as a money laundering site for the
proceeds of any unlawful activity. The AMLC is the Philippines’
Financial Intelligence Unit (FIU) to implement AMLA. The AMLC
is composed of:
1.Governor of the BSP
2.Commissioner of the IC
THE ROLE
3.Chairperson of the SEC
OF AMLC

The AMLC receives CTRs and STRs, issues orders to SA to

determine identity, investigates suspicious transactions, or covered
transactions deemed suspicious, applies ex parte for freeze order,
inquires into deposits in connection with AMLA on the basis of
probable cause and imposes administrative sanctions.

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 1. The Regional Trial Courts shall have jurisdiction to try ML
cases committed by private individuals, and public officers
not covered by the jurisdiction of the Sandiganbayan;
2. The Sandiganbayan shall have jurisdiction to try ML cases
committed by public officers under its jurisdiction, and
private persons who are in conspiracy with such public
officers;
JURISDICTION & 3. All unlawful activities, as defined herein, are the predicate
PROSECUTION offenses to ML;
UNDER AMLA 4. The prosecutions of ML and the associated unlawful
activity shall proceed independently. Any person may be
charged with and convicted of both ML and the associated
unlawful activity; and
5. No case for ML may be filed against a candidate for an
electoral office during an election period 

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 https://iclg.com/practice-areas/anti-money-laundering-laws-and-regulations/philippines
http://www.amlc.gov.ph/images/PDFs/Final%20RIRR%20as%20of%201%20December%20%20-%20C
LEAN_final.pdf
http://www.sec.gov.ph/wp-content/uploads/2019/03/2019Notice_UpdatedAnti-MoneyLaunderingModul
efortheSECCertificationExamination.pdf
http://www.ctb.com.ph/wp-content/uploads/2011/01/ra9160-amla-as-amended-18aug03.pdf
http://www.amlc.gov.ph/laws/money-laundering/2015-10-16-02-50-56/republic-act-10167
https://www.lawphil.net/judjuris/juri2008/feb2008/gr_174629_2008.html
http://www.amlc.gov.ph/laws/money-laundering/2015-10-16-02-50-56/republic-act-10365
http://www.amlc.gov.ph/laws/money-laundering/2015-10-16-02-50-56/ra-10927-designating-casinos-as

References
-covered-persons-under-ra-9160-amla-2001
https://www.lawphil.net/statutes/repacts/ra2012/ra_10168_2012.html
http://www.amlc.gov.ph/16-news-and-announcements/161-amlc-approves-2018-implementing-rules-
and-regulations-of-the-amla
http://www.amlc.gov.ph/images/PDFs/FINAL%202018%20IRRv1.pdf
•Anti-Money Laundering/Combating Financing of Terrorism: A Philippine Perspective on a Donor-
Driven Initiative; Mary Jude V. Cantorias; Arellano Law and Policy Review (August, 2009)
•http://www.bsp.gov.ph/regulations/laws/RA9194.pdf
•http://www.amlc.gov.ph/2-uncategorised/20-amlaglance

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