Law Summary
Definition of Covered Transactions
- A covered transaction involves cash or equivalent monetary instruments exceeding Five Hundred Thousand Pesos (P500,000) within one banking day.
Definition of Suspicious Transactions
- Suspicious transactions apply regardless of the transaction amount if any of the following conditions are met:
- Lack of an underlying legal, trade obligation, purpose, or economic justification.
- Improper identification of the client.
- Transaction amount inconsistent with the client’s business or financial capacity.
- Structuring to evade reporting requirements under the Act.
- Deviations from the client’s typical profile or previous transaction history.
- Connection to an unlawful activity or offense covered by the Act.
- Transactions similar or analogous to the above conditions.
Record-Keeping Requirements
- Covered institutions must maintain all transaction records securely for five (5) years from the date of the transaction.
- For closed accounts, records on customer identification, account files, and business correspondence must be preserved and securely stored for at least five (5) years from the account closure date.
Reporting Obligations
- Covered transactions must be reported to the Anti-Money Laundering Council (AMLC) within five (5) working days from the transaction date.
- The Supervising Authority may prescribe a longer reporting period, but it cannot exceed ten (10) working days.
- If a transaction qualifies as both covered and suspicious, it must be reported as a suspicious transaction.
Legal Authority and Purpose
- The regulations are mandated under Republic Act No. 9160 and its amendment by R.A. No. 9194, aimed at preventing money laundering and related unlawful activities through financial institutions.
Compliance and Enforcement
- The reminder and guidance to banks and NBFIs underscore the importance of strict compliance with the reporting and record-keeping duties to aid the detection and prevention of money laundering activities.