ANTI-MONEY LAUNDERING ACT OF 2001 (RA 9160)

As amended by R.A. No. 9194 & R.A. No. 10167

1. Declared policies of AMLA

The declared policies of the Anti-Money Laundering Law Act are as follows:
a. To protect and preserve the integrity and confidentiality of bank accounts; and
b. To ensure that the Philippines shall not be used as a money laundering site for the proceeds of any unlawful
activity
c. To pursue the state’s foreign policy to extend cooperation in transnational investigations and prosecutions of
persons involved in money laundering activities, wherever committed.

Dirty money being cleaned to make it appear legitimate”

2. Transactions covered by AMLA

The following are transactions covered by AMLA:
a. A transaction, in cash or other equivalent monetary instrument in excess of P500,000.00 within 1 banking
day.
b. A transaction with or involving jewelry dealers in precious metals and precious stones in cash or other
equivalent monetary instrument in excess of P1,000,000.00.
c. A single casino transaction in excess of P5,000,000 or its equivalent in any other currency

● Covered transactions refers to a transaction, in cash or other equivalent monetary instrument in excess of
P500,000.00 within 1 banking day.

● Suspicious transactions refers to transactions with covered institutions, regardless of amounts involved,
where any of the following circumstances exist:
1. there is no underlying legal or trade obligation, purpose or economic justification;
2. the client is not properly identified;
3. the amount involved is not commensurate with the business or financial capacity of the client;
4. taking into account all known circumstances, it may be perceived that the client’s transaction is structured in
order to avoid being the subject of reporting requirements under the Act;
5. any circumstance relating to the transaction which is observed to deviate from the profile of the client
and/or the client’s past transactions with the covered institution;
6. the transaction is in any way related to an unlawful activity or offense under this Act that is about to be, is
being or has been committed; or
7. any transaction that is similar or analogous to any of the foregoing.”

3. Define the following terms:

a) Covered institutions refers to the following:
i) banks, non-banks, quasi-banks, trust entities, and all other institutions and their subsidiaries and affiliates
supervised or regulated by the Bangko Sentral ng Pilipinas (BSP);
ii) insurance companies and all other institutions supervised or regulated by the Insurance Commission;
and
iii) (i) securities dealers, brokers, salesmen, investment houses and other similar entities managing securities
or rendering services as investment agent, advisor, or consultant, (ii) mutual funds, closed-end investment
companies, common trust funds, pre-need companies and other similar entities, (iii) foreign exchange
corporations, money changers, money payment, remittance, and transfer companies and other similar
entities, and (iv) 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 Securities and Exchange Commission.

b) Covered transaction refers to a transaction, in cash or other equivalent monetary instrument involving a total
amount in excess of P500,000.00 within 1 banking day

c) Monetary instrument refers to the following:

i) coins or currency of legal tender of the Philippines, or of any other country;
ii) drafts, checks and notes;
iii) securities or negotiable instruments, bonds, commercial papers, deposit certificates, trust certificates,
custodial receipts or deposit substitute instruments, trading orders, transaction tickets and confirmations of
sale or investments and money market instruments; and
 iv) other similar instruments where title thereto passes to another by endorsement, assignment or delivery.

d) Offender refers to any person who commits a money laundering offense (which can be a natural or juridical
person)

e) Person refers to any natural or juridical person.

f) Proceeds refers to an amount derived or realized from an unlawful activity.

g) Supervising Authority refers to the appropriate supervisory or regulatory agency, department or office
supervising or regulating the covered institutions enumerated in Section 3(a) (BSP, IC SEC, Overall AMLC)

h) Transaction refers to any act establishing any right or obligation or giving rise to any contractual or legal
relationship between the parties thereto. It also includes any movement of funds by any means with a covered
institution.

i) Unlawful activity refers to any act or omission or series or combination thereof involving or having relation to
the following:
(1) Kidnapping for ransom under Article 267 of the Revised Penal Code, as amended;
(2) Drug trafficking and related offenses (violation of specific provisions of Comprehensive Dangerous Drugs
Act of 2002);
(3) Violations of specific provisions of Anti-Graft and Corrupt Practices Act;
(4) Plunder under Republic Act No. 7080, as amended; (
(5) Robbery and extortion under Articles 294, 295, 296, 299, 300, 301 and 302 of the Revised Penal Code,
as amended;
(6) Jueteng and Masiao punished as illegal gambling under PD No. 1602;
(7) Piracy on the high seas under the Revised Penal Code, as amended and PD No. 532;
(8) Qualified theft under Article 310 of the Revised Penal Code, as amended; (no forced entry or violence,
qualified if it trusted upon a person with confidence)
(9) Swindling under Article 315 of the Revised Penal Code, as amended;
(10) Smuggling under Republic Act Nos. 455 and 1937;
(11) Violations under the Electronic Commerce Act of 2000;
(12) Hijacking, destructive arson and murder, including those perpetrated by terrorists against non-combatant
persons and similar targets;
(13) Fraudulent practices and other violations under the Securities Regulation Code of 2000;
(14) Felonies or offenses of a similar nature that are punishable under the penal laws of other countries.

4. Institutions covered by AMLA

The Anti-Money Laundering Act covers the following institutions
a. Banks and all other institutions, including their subsidiaries and affiliates supervised or regulated by the
Bangko Sentral ng Pilipinas (BSP); (BSP supervised and regulated entities)
b. insurance companies and all other institutions supervised or regulated by the Insurance Commission;
(IC supervised and regulated entities)
c. securities dealers and other entities supervised or regulated by the Securities and Exchange (SEC
supervised and regulated entities)
d. Designated Non-Financial Businesses and Professions (DNFBPs)
i. Jewelry dealers in precious metals and precious stones, whose business transaction exceeds
P1,000,000.00
ii. Company service providers
iii. Persons who manage clients’ money or bank accounts, organize contributions for operation of a
company; and/or create, operate or manage juridical persons or arrangements
e. casinos, including internet and ship-based casinos, with respect to their casino cash transactions related to
their gaming operations.

The term “covered persons” shall exclude lawyers and accountants acting as independent legal
professionals in relation to information concerning their clients or where disclosure of information would
compromise client confidences or the attorney-client relationship: Provided, that such persons are
authorized to practice in the Philippines and shall continue to be subject to their respective codes of conduct
and/or professional responsibility or any of its amendments.
 5. Obligations of covered institutions
a) Prevention of money laundering
The covered institutions are obliged to follow the customer identification and record keeping
requirements of the AMLA in order to prevent money laundering.
Customer identification requirements
i. Establish and record the true identity of its clients, including the legal existence and organization structure
of a corporate client and their representatives, based on official documents.
ii. Maintain a system of verifying the true identity of their clients and, in case of corporate clients, require a
system of verifying their legal existence and organizational structure, as well as the authority and identification
of all persons purporting to act on their behalf.
iii. Establish appropriate systems and methods based on internationally compliant standards and adequate
internal controls for verifying and recording the true and full identity of their customers.

Record keeping requirements

i. Maintain and safely store all records of transactions for 5 years from the dates of transactions. Such records
and files shall contain the full and true identity of the owners or holders of the accounts involved in the
covered transactions and all other customer identification documents.
ii. Undertake the necessary adequate security measures to ensure the confidentiality of such files.
iii. Prepare and maintain documentation, in accordance with the aforementioned client identification
requirements, on their customer accounts, relationships and transactions such that any account, relationship
or transaction can be so reconstructed as to enable the AMLC, and/or the courts to establish an audit trail for
money laundering.

Prevention:
1. Customer identification
2. Record keeping
3. Reporting of covered transactions

Know Your Client - establish the true identities of client by requiring, 2 valid IDs (government issued IDs), sources of
funds

b) Customer identification requirements

The obligations of covered institutions in relation to customer identification requirements are the
following:
i. Establish and record the true identity of its clients based on official documents;
ii. Maintain a system of verifying the true identity of their clients and, in case of corporate clients, require a
system of verifying their legal existence and organizational structure, as well as the authority and
identification of all persons purporting to act on their behalf; and
iii. Establish appropriate systems and methods based on internationally compliant standards and adequate
internal controls for verifying and recording the true and full identity of their customers

6. What is prohibited under the law?

Anonymous accounts, accounts under fictitious names, and all other similar accounts shall be absolutely prohibited

7. How to prevent money laundering?

To prevent money laundering, covered institutions should apply the following principles:
a. Know your customer. Obtain competent evidence of the customer’s identity, and have effective procedures
for verifying the bona fide identity of new customers, including their beneficial owners, if applicable.
b. Compliance with laws. Ensure that business is conducted in conformity with high ethical standards, that
laws and regulations are adhered to, and that service is not provided where there is good reason to believe
that transactions are associated with money laundering activities.
c. Full cooperation with law enforcement agencies.
d. Policies, procedures and training. Adopt policies consistent with the principles set out, and ensure that its
directors, officers and employees wherever located, are informed of these policies and adequately trained in
matters covered.

To promote adherence to these principles, covered institutions shall implement specific procedures for
customer identification, record keeping and retention of transaction documents, and reporting of covered and
suspicious transactions.
8. Requirements for customer identification
a) True identity of individuals or clients (Know your client)
Covered institutions shall obtain competent evidence of the customer’s identity, and have effective
procedures for verifying the bona fide identity of new customers, including their beneficial owners, if applicable.
Know your customers procedures should include conducting customer due diligence for the following
purposes:
i. to identify the customer, and its agents and beneficial owners;
ii. to determine the risk posed by each customer;
iii. to establish, maintain, close or terminate the account or business relationship; and
iv. to assess the level of monitoring to be applied.

Customer Identification
The obligations of covered institutions in relation to customer identification requirements are the
following:
i. Establish and record the true identity of its clients based on official documents;
ii. Maintain a system of verifying the true identity of their clients and, in case of corporate clients, require a
system of verifying their legal existence and organizational structure, as well as the authority and
identification of all persons purporting to act on their behalf; and
iii. Establish appropriate systems and methods based on internationally compliant standards and adequate
internal controls for verifying and recording the true and full identity of their customers

Trustee, Nominee and Agent Accounts.

The obligations of covered institutions in relation to trustee, nominee and agent accounts are the
following:
i. Verify and record the true and full identity of the person(s) on whose behalf a transaction is being conducted
ii. Establish and record the true and full identity of such trustees, nominees, agents and other persons and the
nature of their capacity and duties.
iii. In case of doubts as to whether such persons are being used as dummies in circumvention of existing laws,
immediately make the necessary inquiries to verify the status of the business relationship between the
parties.

b) Minimum Information/Documents Required for Individual Customers. –

Covered institutions shall require customers to produce original documents of identity issued by an
official authority, bearing a photograph of the customer (e.g. identity cards, passport).
The following minimum information/documents shall be obtained from individual customers:
i. Name;
ii. Present address;
iii. Permanent address;
iv. Date and place of birth;
v. Nationality;
vi. Nature of work and name of employer or nature of self employment/business;
vii. Contact numbers;
viii. TIN, SSS number or GSIS number;
ix. Specimen signature;
x. Source of fund(s); and
xi. Beneficiaries, if applicable.

c) Minimum Information/Documents Required for Corporate and Juridical Entities. –

Before establishing business relationships, covered institutions shall endeavor to ensure that the
customer is a corporate or juridical entity which has not been or is not in the process of being, dissolved,
wound up or voided, or that its business or operations has not been or is not in the process of being, closed,
shut down, phased out, or terminated. Dealings with shell companies and corporations, being legal entities
which have no business substance in their own right but through which financial transactions may be conducted,
should be undertaken with extreme caution.
The following minimum information/documents shall be obtained from such customers:
i. Articles of Incorporation/Partnership;
ii. Certificate of registration issued by the SEC;
iii. By-laws;
iv. Official address or principal business address;
v. List of directors/partners;
vi. List of principal stockholders owning at least 2% of the capital stock;
vii. Contact numbers;
viii. Beneficial owners, if any; and
ix. Verification of the authority and identification of the person purporting to act on behalf of the client.
x. General Information Sheet
 xi. Board resolution, secretary certificate stating the persons authorized to be signatories of the account

d) Prohibition against Certain Accounts.

Covered institutions shall maintain accounts only in the true and full name of the account owner or
holder. The provisions of existing laws to the contrary notwithstanding, anonymous accounts, accounts
under fictitious names, and all other similar accounts shall be absolutely prohibited.

e) Prohibition against opening of Accounts without Face-to- face Contact. (Should be opened with
face-to-face contact)
No new accounts shall be opened and created without face-to-face contact and full compliance with the
requirements under Minimum Information/Documents Required for Individual Customers.

f) Numbered Accounts. (Accounts are NUMBERED)

Peso and foreign currency non-checking numbered accounts shall be allowed only when the true
identity of customers owning such accounts are satisfactorily established based on official and other
reliable documents and records; and the minimum information and documents required are obtained and
recorded by the covered institution. No peso and foreign currency non-checking accounts shall be allowed
without the establishment of such identity and in the manner provided by the implementing rules and regulations
of AMLA

9. How long shall the records be kept?

a) Existing and New Accounts and New Transactions.
All customer identification records of covered persons shall be maintained and safely stored as long as
the account exists. All transaction records and documents of covered persons shall be maintained and safely
stored for 5 years from the date of transaction.

b) Closed Accounts.
All records shall be preserved and safely stored for at least 5 years from the dates when they were
closed.

c) Retention of Records in Case a Money Laundering Case has been filed in Court.
Records shall be retained and safely kept beyond the 5-year retention period, until it is officially
confirmed by the AMLC Secretariat that the case has been resolved, decided or terminated with finality.

d) Form of Records.
Covered persons shall retain all records as originals or in such forms as are admissible in court
pursuant to existing laws, such as the E-Commerce Act and its implementing rules and regulations, and the
applicable rules promulgated by the Supreme Court.
Covered persons shall, likewise, keep the electronic copies of all covered transaction reports (CTRs)
and suspicious transaction reports (STRs) for at least 5 years from the dates of submission to the AMLC.
For low risk customers, it is sufficient that covered persons shall maintain and store, in any form, a
record of customer information and transactions, but should sufficient to permit reconstruction of individual
transactions so as to provide, if necessary, evidence for prosecution of criminal activity

10. Rule regarding reporting of covered and suspicious transactions (reportorial requirements)
The following are the rules in reporting covered and suspicious transactions:
a. Covered institutions shall report to the AMLC all covered transactions within 5 working days from
occurrence thereof, unless the Supervising Authority concerned prescribes a longer period not exceeding
10 working days. If a transaction is determined to be both a covered and suspicious transaction, the covered
institution shall report it SUSPICIOUS TRANSACTION.
b. Reporting covered institutions are prohibited from communicating to any person the fact that a covered
transaction report was made, its contents or any other information in relation thereto. Neither may such
reporting be published or aired in any manner or form by the mass media, electronic mail, or other similar
devices. A violation of this rule constitutes a criminal liability to the concerned reporting institution or the
media.

11. How is money-laundering crime committed?

Money laundering crime is committed by any person knowing that any monetary instrument or property
represents, involves, or relates to, the proceeds of any unlawful activity:
a. transacts or attempts to transact said monetary instrument or property.
b. 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. requires to disclose and file with the Anti-Money Laundering Council (AMLC), fails to do so
Additional provisions
d. converts, transfers, disposes of, moves, acquires, possesses or uses said monetary instrument or property;
e. conceals or disguises the true nature, source, location, disposition, movement or ownership of or rights with
respect to said monetary instrument or property;
f. attempts or conspires to commit money laundering offenses referred to in paragraphs (a), (b) or (c);
g. aids, abets, assists in or counsels the commission of the money laundering offenses referred to in
paragraphs (a), (b) or (d) above; and
- Proceeds of unlawful activities is transacted to appear to have originated from legitimate sources

12. What are unlawful activities?

Unlawful activities includes the following:
a. Kidnapping for ransom;
b. Drug trafficking and related offenses (violation of specific provisions of Comprehensive Dangerous Drugs Act
of 2002);
c. Graft and corrupt practices;
d. Plunder; (accumulation of ill gotten wealth through a combination or series of overt criminal acts in the
aggregate amount of 150 billion pesos by a public official)
e. Robbery and Extortion; (Robbery - forced entry, w/ use of violence / Theft - no forced entry, no violence)
f. Jueteng and Masiao; (Illegal gambling)
g. Piracy on high seas;
h. Qualified theft;
i. Swindling;
j. Smuggling;
k. Violations under the Electronic Commerce Act of 2000;
l. Hijacking, destructive arson; and murder, including those perpetrated by terrorists against non-combatant
persons and similar targets;
m. Fraudulent practices and other violations under the Securities Regulation Code of 2000 (Securities fraud);
n. Similar nature offenses punishable by foreign laws;
Additional:
o. Terrorism;
p. Financing of Terrorism;
q. Bribery;
r. Frauds and Illegal Exactions and Transactions;
s. Malversation of Public Funds;
t. Forgeries and Counterfeiting;
u. Violations of Anti-Trafficking in Persons Act of 2003;
v. Violations of Revised ForestryCode;
w. Violations of Philippine Fisheries Code of 1998;
x. Violations of Philippine Mining Act of 1995;
y. Violations of Wildlife Resources
z. Conservation and Protection Act;
aa. Violations of National Caves and Cave Resources Management Protection Act;
bb. Violations of Anti-Carnapping Act of 2002;
cc. Illegal/Unlawful Possession, Manufacture, Dealing In, Acquisition or Disposition of Firearms, Ammunition or
Explosives;
dd. Violation of the Anti-Fencing Law;
ee. Violation the Migrant Workers Overseas Filipinos Act of 1995;
ff. Violation of the Intellectual Property Code of the Philippines;
gg. Violation of the Anti-Photo and Video Voyeurism Act of 2009;
hh. Violation of the Anti-Child Pornography Act of 2009; and
ii. Violations of the Special Protection of Children Against Abuse, Exploitation and Discrimination.

13. What are penalties and other consequences for violating AMLA?
Violation Penalty imposed on the a person convicted

Knowingly transacting or attempting to transact a. Imprisonment ranging from 7 to 14 years; AND

monetary instrument or property proceeding from unlawful b. A fine of not less than Php3,000,000.00 but not
activity more than twice the value of the monetary
instrument or property involved in the offense
Knowingly performing or failure to perform any act in a. Imprisonment from 4 to 7 years; AND
relation to monetary instrument or property proceeding from b. A fine of not less than Php1,500,000.00 but not
unlawful activity as a result of facilitating the offense of more than Php3,000,000.00
money laundering

Knowingly failing to disclose and file to the AMLC a. Imprisonment from 6 months to 4 years; OR
required disclosure or filing of any monetary instrument or b. A fine of not less than Php100,000.00 but not
property more than Php500,000.00; OR
c. Both

14. Consequences of malicious reporting

A person who maliciously reporting money laundering information are subject to the following penalty:
a. 6 months to 4 years imprisonment; and
b. Fine of not less than Php 100,000.00 but not more than Php 500,000.00, at the discretion of the court:
Provided, That the offender is not entitled to avail the benefits of the Probation Law.

Additional penalties according to certain type of offenders:

Corporation, association, partnership or To whom the penalty shall be imposed?
any juridical person - Responsible officers
Additional penalty: Suspension or revocation of license

Alien Additional penalty: Deportation without further proceedings after

serving the prescribed penalties

Public official or employee Additional penalty: Perpetual or temporary absolute disqualification

from office,as the case may be

15. When is freezing of accounts ordered?

The freezing of accounts is ordered upon verified ex parte petition by the AMLC and after
determination that probable cause exists that any monetary instrument or property is in any way related
to an unlawful activity as defined in Section 3(i) of AMLA, which shall be effective immediately, for a period of
20 days unless extended by the court.

16. When examination of accounts under AMLA is done notwithstanding the provisions of secrecy of bank
deposits
The examination of accounts under AMLA, notwithstanding the provisions of secrecy of bank deposits, is
done upon order of any competent court based on an ex parte application in cases of violations, when it
has been established that there is probable cause that the deposits or investments, including related accounts
involved, are related to an unlawful activity.
No court order is required in cases of the following:
1. Kidnapping for ransom;
2. Drug offenses (violation of specific provisions of Comprehensive Dangerous Drugs Act of
2002);
3. Hijacking, destructive arson and murder, including those perpetrated by terrorists against
non-combatant persons and similar targets;
4. Similar foreign offenses of those mentioned above; and
5. Terrorism and conspiracy to commit terrorism

17. Does AMLA provide safe harbor provision?

Yes, AMLA provides safe harbor provision. Under this provision, no administrative, criminal or civil
proceedings shall lie against any person for having made a covered transaction report in the regular
performance of his duties and in good faith, whether or not such reporting results in any criminal prosecution
under the AMLA or any other Philippine law. (Legal provision to sidestep or eliminate legal or regulatory liability
in certain situations) (Provides immunity to any financial institutions or covered institutions that makes voluntary
report/disclosure of any possible violation of law or regulation to a government agency, done in GOOD FAITH)

AMLA & SBD: AMLA relaxes the strict bank secrecy of bank deposits law. AMLC can inquire into or examine
any particular deposit or investment.

Requirement to inquire or examine: (AMLA) (#16)

1. Establish probable cause that indeed money is from unlawful activity
2. Court order is required to be presented to the bank