Law Summary
Declaration of Policy
- To protect and preserve the integrity and confidentiality of bank accounts.
- Prevent the Philippines from being used as a money laundering site.
- Extend cooperation in transnational investigations and prosecutions.
Definitions
- Covered institution: Banks, non-banks, quasi-banks, trust entities, insurance, SEC-supervised institutions.
- Covered transaction: Transactions exceeding Php4,000,000 over five consecutive banking days or unusually large/complex without legitimate origin.
- Monetary instrument: Legal tender, drafts, checks, securities, negotiable instruments, and similar.
- Offender: Person committing money laundering.
- Person: Natural or juridical person.
- Proceeds: Amount derived from unlawful activity.
- Supervising Authority: Agency regulating covered institutions.
- Transaction: Act establishing obligation or movement of funds.
- Unlawful activity: Includes kidnapping, drug offenses, graft, plunder, robbery, extortion, illegal gambling, piracy, theft, fraud, smuggling, cybercrimes, hijacking, arson, murder, securities violations, and similar felonies.
Money Laundering Offense
- Committed when proceeds of unlawful activity are transacted to appear legitimate.
- Offense includes transacting, facilitating, or failure to disclose required information to AMLC.
Jurisdiction
- Regional Trial Courts have jurisdiction.
- Cases involving public officers or conspiracy with them fall under the Sandiganbayan.
Prosecution
- Persons may be charged with both money laundering and underlying unlawful activity.
- Proceedings on unlawful activity take precedence.
Anti-Money Laundering Council (AMLC)
- Composed of BSP Governor (Chair), Insurance Commissioner, and SEC Chairman.
- Functions include receiving reports, investigating, issuing freeze orders, instituting forfeiture, filing complaints, coordinating with foreign states, education, and enlisting government assistance.
Secretariat
- Headed by an Executive Director appointed for 5 years.
- Members must be lawyers with experience and permanent BSP positions.
Prevention Measures
- Customer Identification: Covered institutions must verify and record true client identity; anonymous and fictitious accounts prohibited.
- Record Keeping: Retain transaction records for five years; closed accounts records retained similarly.
- Reporting: Covered transactions reported to AMLC within 5 working days.
- Confidentiality: Strict prohibition against disclosure of related reports; violations are punishable.
Authority to Freeze Accounts
- AMLC may issue a freeze order on suspected accounts for 15 days.
- Depositor notified and given 72 hours to respond.
- Freeze may be extended by court order.
- Only Court of Appeals or Supreme Court can issue a restraining order against freeze.
Inquiry Powers
- AMLC may examine bank deposits or investments upon court order when probable cause exists.
- Does not apply to deposits prior to Act’s effectivity.
Forfeiture Provisions
- Civil forfeiture applies upon court order after covered transaction reports.
- Offender or claimant may petition for legitimate claim within 15 days.
- Payment in lieu of forfeiture allowed if property cannot be recovered.
Mutual Assistance
- AMLC may execute or refuse foreign requests based on reciprocity and legality.
- May assist by tracking, freezing, providing information, applying for forfeiture orders.
- Can request assistance from foreign states similarly.
- Requests must meet detailed requirements including authenticated documents.
- Philippines to negotiate inclusion of money laundering in extradition treaties.
Penal Provisions
- Imprisonment 7-14 years and fine up to twice value for offenders who transact proceeds.
- Penalties for facilitators and failure to report or keep records.
- Malicious reporting punished.
- Breach of confidentiality penalized.
- Disqualifications and additional penalties for public officials.
Incentives and Rewards
- Established system for government agencies and personnel involved in successful investigations and prosecutions.
Prohibition Against Political Harassment
- The Act shall not be used for political persecution or to affect electoral candidates.
Restitution
- Governed by the provisions of the New Civil Code.
Implementing Rules and Regulations
- BSP, Insurance Commission, and SEC to promulgate rules within 30 days after effectivity.
- Covered institutions to develop prevention programs and training.
Congressional Oversight Committee
- Composed of 7 Senators and 7 House Representatives with minority representation.
- To oversee implementation and review AMLC rules.
Appropriations
- Initial funding of Php25,000,000 provided to AMLC.
- Subsequent appropriations included in the General Appropriations Act.
Separability Clause
- Invalidity of any provision does not affect other provisions or applications.
Repealing Clause
- Repeals inconsistent laws and provisions including older anti-money laundering or bank secrecy laws.
Effectivity
- Takes effect 15 days after publication.
- Does not apply to deposits or investments before effectivity.