Policy and targeted sanctions focus
- Section 2 of Republic Act No. 9160, as amended, states the State policy to protect and preserve the integrity and confidentiality of bank accounts.
- Section 2 requires ensuring that the Philippines shall not be used as a money laundering site for proceeds of any unlawful activity.
- Section 2 mandates transnational cooperation for investigations and prosecutions of money laundering wherever committed.
- Section 2 directs cooperation in implementing targeted financial sanctions tied to proliferation of weapons of mass destruction, terrorism, and financing of terrorism, consistent with United Nations Security Council resolutions.
Definitions expanded and clarified
- Section 3 defines “Covered persons” as natural or juridical persons and expressly includes real estate developers and brokers and offshore gaming operation and their service providers, supervised, accredited, or regulated by PAGCOR or any government agency.
- Section 3 defines “Covered transactions” as a transaction in cash or other equivalent monetary instrument involving an amount in excess of Five hundred thousand pesos (P500,000.00) within one (1) banking day.
- Section 3 sets special single-casino cash transaction threshold for covered persons under Section 3(a)(8) at in excess of Five million pesos (P5,000,000.00) or its equivalent in any other currency.
- Section 3 sets special offshore gaming cash threshold for covered persons under Section 3(a)(9) at 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.
- Section 3 defines “Suspicious transactions” as transactions with covered persons regardless of amounts involved when any listed circumstance exists, including:
- no underlying legal or trade obligation, purpose, or economic justification;
- client not properly identified;
- amount not commensurate with business or financial capacity;
- structuring perceived to avoid reporting requirements;
- deviation from client profile and/or prior transactions;
- relation to an unlawful activity or offense that is about to be, is being, or has been committed; or
- transactions similar or analogous to any foregoing circumstance.
- Section 3 defines “Unlawful activity” and includes, among enumerated predicates, violations and crimes such as:
- Fraudulent practice and other violations under Republic Act No. 8799;
- Violation of Section 9(a)(3) of Republic Act No. 10697 in relation to proliferation of weapons of mass destruction and its financing pursuant to UNSC Resolution Nos. 1718 of 2006 and 2231 of 2015;
- Violation of Section 254 of Chapter II, Title X of the National Internal Revenue Code of 1997, as amended, where deficiency basic tax due in the final assessment is in excess of Twenty-five million pesos (P25,000,000.00) per taxable year, for each tax type covered and where there has been a finding of probable cause by the competent authority, with further requirements of a finding of fraud, willful misrepresenting, or malicious intent;
- AMLC forfeiture restriction tied to tax recovery: AMLC shall not institute forfeiture proceedings to recover monetary instruments, property, or proceeds representing, involving, or relating to a tax crime if the same has already been recovered or collected by the Bureau of Internal Revenue (BIR) in a separate proceeding;
- Felonies and offenses of a similar nature punishable under penal laws of other countries.
- Section 3 defines “Offshore gaming operator” as an entity offering online games of chance or sporting events via the internet using a network and software program, by itself or through local service providers.
- Section 3 defines “Service providers” as duly constituted business corporations that provide components of offshore gaming operations to offshore gaming operators.
- Section 3 defines:
- “Real estate developer” as a natural or juridical person engaged in developing real estate development projects for the account of the developer and offering them for sale or lease;
- “Real estate broker” as a duly registered and licensed natural person who, for a professional fee or other valuable consideration, acts as an agent in real estate transactions to offer, advertise, solicit, list, promote, mediate, negotiate, or effect the meeting of the minds on specified real estate transactions or interests;
- “Targeted financial sanctions” as both asset freezing and prohibition to prevent funds or other assets from being made available, directly or indirectly, for the benefit of individuals or entities designated pursuant to relevant UNSC resolutions and designation processes;
- “Proliferation financing” when a person makes available an asset, provides a financial service, or conducts a financial transaction knowing or being reckless as to whether the intended purpose is to facilitate proliferation of weapons of mass destruction in relation to UNSC Resolution No. 1718 of 2006 and 2231 of 2015.
AMLC composition and unanimity mandate
- Section 7 creates the Anti-Money Laundering Council (AMLC) 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.
- Section 7 requires the AMLC to act unanimously in the discharge of its functions.
- Section 7 empowers the AMLC to investigate:
- suspicious transactions; and
- covered transactions deemed suspicious after determination by the AMLC,
and also to investigate money laundering activities and other violations of the Act.
- Section 7 requires that in conducting investigations, the AMLC shall apply for:
- a search and seizure order with any competent court; and
- subpoena ad testificandum and/or subpoena duces tecum with any competent court.
- Section 7 directs the AMLC to implement targeted financial sanctions in proliferation financing matters, including:
- ex parte freeze, without delay, against all funds and other assets owned or controlled, directly or indirectly, including funds and assets derived or generated therefrom, by individuals or entities designated and listed under UNSC Resolution Nos. 1718 of 2006 and 2231 of 2015 and their successor resolutions and other binding UNSC resolutions.
- Section 7 authorizes the AMLC to preserve, manage, or dispose assets pursuant to a freeze order, asset preservation order, or judgment of forfeiture, with the rule that pending turnover to the national government, all expenses incurred are deducted from the amount to be turned over to the national government.
Secretariat confidentiality and information security
- Section 8-A obligates the AMLC and its Secretariat to securely protect information received or processed.
- Section 8-A prohibits the AMLC and its Secretariat from revealing, in any manner, any information known by reason of their office.
- Section 8-A extends the prohibition even after separation from the AMLC.
- Section 8-A requires the AMLC to formulate rules governing:
- information exchange and dissemination; and
- the security and confidentiality of information, including procedures for handling, storage, protection, and access.
Freezing orders, due process limits
- Section 10(a) permits the Court of Appeals to issue a freeze order upon a verified ex parte petition by the AMLC after determination of probable cause that the monetary instrument or property is related to an unlawful activity under Section 3(i).
- Section 10(a) provides that the freeze order is effective immediately for twenty (20) days.
- Section 10(a) requires the Court of Appeals, within the twenty (20) day period, to conduct a summary hearing with notice to the parties to decide whether to modify or lift the freeze order or extend its effectivity.
- Section 10(a) limits the total freeze order period issued under this provision to not exceed six (6) months.
- Section 10(a) states that the freeze order rule is without prejudice to an asset preservation order that the Regional Trial Court may issue on the same account depending on circumstances, with the rule that the Court of Appeals will remand the case and its records.
- Section 10(a) provides that if no case is filed against a person whose account has been frozen within the period determined by the Court of Appeals (not exceeding six (6) months), the freeze order is ipso facto lifted.
- Section 10(a) provides that the new freeze rule does not apply to pending cases in the courts.
- Section 10(a) requires courts to act on the petition to freeze within twenty-four (24) hours from filing, and provides that if filed a day before a nonworking day, computation of the twenty-four (24) hour period excludes nonworking days.
- Section 10(a) limits freeze or asset preservation to only the amount of cash/monetary instrument or value of property that the court finds has probable cause as proceeds of a predicate offense, and prohibits application to amounts in the same account exceeding the found proceeds amount/value.
- Section 10(a) allows a person whose account has been frozen to file a motion to lift the freeze order, and the court must resolve the motion before expiration of the freeze order.
- Section 10(a) prohibits issuance of a temporary restraining order or writ of injunction against any freeze order except the Supreme Court.
- Section 10(b), for implementing targeted financial sanctions in proliferation financing under Section 3(15), grants AMLC power to issue an ex parte order to freeze without delay.
- Section 10(b) provides that the freeze order is effective until the basis for issuance is lifted.
- Section 10(b) requires that during the freeze order effectivity, the aggrieved party may file with the Court of Appeals, within twenty (20) days from issuance, a petition to determine the basis of the freeze order under the principle of effective judicial protection.
- Section 10(b) allows the person whose property or funds have been frozen to withdraw sums AMLC determines are reasonably needed for monthly family needs and sustenance, including:
- services of counsel; and
- the family medical needs of that person.
- Section 10(b) authorizes AMLC, if circumstances warrant, to initiate civil forfeiture proceedings to preserve assets and protect them from dissipation.
- Section 10(b) provides that no temporary restraining order or writ of injunction shall issue against the freeze order except the Court of Appeals or the Supreme Court.
Limits on injunctions for asset preservation
- Section 12(d) prohibits courts from issuing a temporary restraining order (TRO) or writ of injunction against any provisional asset preservation order or asset preservation, except the Court of Appeals or the Supreme Court.
Penal sanctions for information breaches
- Section 14(d) imposes imprisonment ranging from three (3) to eight (8) years and a fine of not less than Five hundred thousand Philippine pesos (P500,000.00) but not more than One million Philippine pesos (P1,000,000.00) for conviction for violation under Section 9(c) or Section 8-A on information security and confidentiality.
- Section 14(d) provides that if the offender is a public official or employee, the offender suffers in addition to prescribed penalties perpetual or temporary absolute disqualification from public office, depending on the case.
- Section 14(d) imposes liability on media actors for published/reported confidentiality breaches, covering the responsible reporter, writer, president, publisher, manager, and editor-in-chief.
AMLC non-interference with BIR operations
- Section 20 states that nothing in the Act or related antecedent laws or existing agreements allows the AMLC to participate in any manner in the operation of the Bureau of Internal Revenue (BIR).
- Section 20 authorizes AMLC to coordinate with the BIR on investigations relating to violations of Section 254 of the NIRC, as amended, as a predicate offense to money laundering.
Implementing rules timeline
- Section 9 requires the AMLC to issue necessary rules and regulations within ninety (90) days from the effectivity of the Act.
Separability and repeal/modified adoption
- Section 10 provides separability: if any provision or section is held unconstitutional or invalid, the unaffected provisions continue in full force and effect.
- Section 11 repeals or modifies provisions of existing laws, orders, rules, regulations, or parts thereof that conflict or are inconsistent with the Act.
- Section 11 adopts all provisions of Republic Act No. 9160, as amended, that are not inconsistent with Republic Act No. 11521.