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This article was originally published on March 5, 2021 and has been updated to reflect recent legal developments.

This article is provided for general informational purposes only and does not create, nor shall it be construed as creating, a lawyer-client relationship between Alburo Alburo and Associates Law Offices (or any of its lawyers) and the reader. For advice on specific legal concerns, you are encouraged to engage the services of a qualified lawyer. You may also directly consult Alburo Alburo and Associates Law Offices for proper guidance tailored to your situation.

The views and information presented herein are based on the laws, rules, and jurisprudence prevailing at the time of writing. They do not take into account subsequent legal developments and should not be relied upon as a substitute for professional legal advice.

AT A GLANCE:

Under Section 2 of Republic Act No. 9160, as amended, otherwise known as the Anti-Money Laundering Act of 2001, it is declared the policy of the State to protect and preserve 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. Consistent with its foreign policy, the State likewise extends cooperation in transnational investigations and prosecutions of persons involved in money laundering activities wherever committed.

In an increasingly interconnected financial system, the movement of illicit funds across borders has become a serious concern among nations. Money laundering not only undermines the integrity of financial institutions but also facilitates organized crime, corruption, terrorism financing, and other unlawful activities.

To address these concerns, the Philippines enacted Republic Act No. 9160, as amended, otherwise known as the Anti-Money Laundering Act of 2001 (AMLA).

What is Money Laundering?

Section 4 of the Anti-Money Laundering Act of 2001, as amended defines Money laundering as follows: 

SEC. 4. Money Laundering Offense. — Money laundering is a crime whereby the proceeds of an unlawful activity are transacted, thereby making them appear to have originated from legitimate sources. It is committed by the following:

 

(a) Any person knowing that any monetary instrument or property represents, involves, or relates to, the proceeds of any unlawful activity, transacts or attempts to transact said monetary instrument or property.

 

(b) 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 referred to in paragraph (a) above.

 

(c) 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.

 

Creation of the Anti-Money Laundering Council

The law created the Anti-Money Laundering Council (AMLC), which serves as the primary government agency tasked with implementing the AMLA. 

Section 7 of the AMLA, as amended, creates the Anti-Money Laundering Council which shall be composed of the following: 

1. Governor of the Bangko Sentral ng Pilipinas as chairman; 
2. Commissioner of the Insurance Commission; and 
3. Chairman of the Securities and Exchange Commission as members.

The AMLC shall act unanimously in the discharge of its functions and, in sum, is empowered to investigate suspicious transactions, require covered and suspicious transaction reports, apply for freezing orders, institute civil forfeiture proceedings, coordinate with foreign states, and impose administrative sanctions pursuant to the AMLA..

Jurisdiction of Money Laundering Cases

The Regional Trial Courts shall have jurisdiction to try all cases on money laundering. Those committed by public officers and private persons who are in conspiracy with such public officers shall be under the jurisdiction of the Sandiganbayan. (Section 5, AMLA)

Prosecution of Money Laundering

1. ) Any person may be charged with and convicted of both the offense of money laundering and the unlawful activity as herein defined.
2. ) Any proceeding relating to the unlawful activity shall be given precedence over the prosecution of any offense or violation under this Act without prejudice to the freezing and other remedies provided.  (Section 6, AMLA)

Covered Transactions

As provided for under Section 3(b) of the AMLA, as amended, covered transactions pertains to 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.

Covered Persons

Originally referred to as “covered institutions” under Section 3(a) of the AMLA, the term was later amended to “covered persons” in order to broaden its coverage and include the following: 

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 (BSP);
2. insurance companies, pre-need companies and all other persons supervised or regulated by the Insurance Commission (IC);
3. 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 monetary instruments or property supervised or regulated by the Securities and Exchange Commission (SEC);
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:
8. managing of client money, securities or other assets;
9. management of bank, savings or securities accounts;
10. organization of contributions for the creation, operation or management of companies; and
11. creation, operation or management of juridical persons or arrangements, and buying and selling business entities.

Related Articles:

• Covered Persons under the Anti-Money Laundering Act
• Anti-Money Laundering Act: Safe Harbor Provision
• Suspicious Transactions under the Anti-Money Laundering Act
• Forfeiture Provisions Under Anti-Money Laundering Act
• Anti-Money Laundering Council
• Authority to Inquire Into Bank Deposits Under Anti-Money Laundering Act

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Alburo Alburo and Associates Law Offices specializes in business law and labor law consulting. For inquiries regarding legal services, you may reach us at info@alburolaw.com, or dial us at (02)7745-4391/ 09175772207/ 09778050020.

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