anti money laundering act
DESCRIPTION
AMLATRANSCRIPT
“Corruption is a source of laundered funds, and smuggling, particularly bulk cash smuggling, is a
major problem”
Monitoring of money laundering in the Philippines is weak as the government is faced with limited
human and financial resources, according to the latest annual US State Department Report on Terrorism.
It said the Philippines should pass the pending bill on anti-money laundering. In addition, the
country should seek to include casinos in the proposed list of covered institutions. Casinos currently are
not covered under the Anti-Money Laundering Act (AMLA), and the laws surrounding online gaming are
even less clear.
While the government of the Philippines has made notable progress in enacting legislation and
issuing regulations, limited human and financial resources constrain tighter monitoring and enforcement.
In June 2012, the Philippines enacted legislation to address some noted major deficiencies. The
changes authorize the Anti-Money Laundering Council (AMLC) to apply to the courts for ex-parte inquiry
into deposits and investments in relation to all unlawful activities enumerated under the AMLA.
Money Laundering is a crime whereby the proceeds of an unlawful activity as
defined in the AMLA are transacted or attempted to be transacted to make them
appear to have originated from legitimate sources.
Republic Act No. 9160 otherwise known as The Anti-Money Laundering
Act of 2001 was signed into law on September 29, 2001 and took effect on October
17, 2001. The implementing Rules and Regulations took effect on April 2, 2002. On
March 7, 2003, R.A. No. 9194 (An Act Amending R.A. No. 9160) was signed into law
and took effect on March 23, 2003. The revised Implementing Rules and
Regulations took effect on September 7, 2003.
The Philippines, while striving to sustain economic development
and poverty alleviation through, among others, corporate governance and public
office transparency, must contribute its share and play a vital role in the global fight
against money laundering. Hence, the compelling need to enact responsive anti-
money laundering legislation in order to establish and strengthen an anti-money
laundering regime in the country which will not only increase investor’s confidence
but also ensure that the Philippines is not used as a site to launder proceeds of
unlawful activities.
Money Laundering Offenses and Penalties:
1. Knowingly transacting or attempting to transact any monetary
instrument/property which represents, involves or relates to the proceeds of an
unlawful activity. Penalty is 7 to 14 years imprisonment and a fine of not less than
P3M but not more than twice the value of the monetary instrument/property.
2. Knowingly performing or failing to perform an act in relation to any monetary
instrument/property involving the proceeds of any unlawful activity as a result of
which he facilitated the offense of money laundering. Penalty is 4 to 7 years
imprisonment and a fine of not less than P1.5M but not more than P3M.
3. Knowingly failing to disclose and file with the AMLC any monetary
instrument/property required to be disclosed and filed. Penalty is 6 months to 4
years imprisonment or a fine of not less than P100,000 but not more than P500,000,
or both.
Unlawful Activity is the offense which generates dirty money or property. It
is commonly called the predicate crime. It refers to any act or omission or series or
combination thereof involving or having direct relation to the following:
Predicate Crimes/Unlawful Activities
1. Kidnapping for ransom
2. Drug trafficking and related offenses
3. Graft and corrupt practices
4. Plunder
5. Robbery and Extortion
6. Jueteng and Masiao
7. Piracy
8. Qualified theft
9. Swindling
10. Smuggling
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.
15. Terrorism financing and organizing or directing others to commit terrorism
financing (R.A. 10168).
16. Attempt/conspiracy to commit terrorism financing and organizing or directing
others to commit terrorism financing (R.A. 10168).
17. Attempt/conspiracy to commit dealing with property or funds of designated
person.
18. Accomplice to terrorism financing or conspiracy to commit terrorism financing.
19. Accessory to terrorism financing.
Covered Institutions are those mandated by the AMLA to submit covered and
suspicious transaction reports to the AMLC.
These are:
1. Banks and all other entities, including their subsidiaries and affiliates, supervised
and regulated by the Bangko Sentral ng Pilipinas
2. Insurance companies, pre-need companies and all other institutions supervised or
regulated by the Insurance Commission
3. Securities dealers and other entities supervised or regulated by the Securities
and Exchange Commission.
Covered & Suspicious Transactions:
1. Covered transactions are single transactions in cash or other equivalent
monetary instrument involving a total amount in excess of Five Hundred Thousand
(P500,000) Pesos within one (1) banking day
2. Suspicious transactions are transactions with covered institutions, regardless of
the amounts involved, where any of the following circumstances exists:
3. There is no underlying legal/trade obligation, purpose or economic justification;
the client is not properly identified;
4. The amount involved is not commensurate with the business or financial capacity
of the client;
5. The transaction is structured to avoid being the subject of reporting requirements
under the AMLA;
6. There is a deviation from the client’s profile/past transactions;
7. The transaction is related to an unlawful activity/offense under the AMLA;
and transactions similar or analogous to the above.
Freezing of Monetary Instrument or Property
The AMLC may file before Court of Appeals, before the verified
application ex parte (without notice to the other party) after determination that
probable cause exists that any monetary instrument or property is in any way
related to an unlawful activity. The freeze order shall be effective immediately. The
freeze order shall be for a period of 20 days unless extended by the court.
Authority to Inquire into Bank Deposits
The AMLC may inquire into or examine any particular deposit or
investment with any banking institution or non-bank financial institution upon order
of any competent court in cases of violation of the AMLA when it has been
established that there is probable cause that the deposits or investments involved
are in any way related to a money laundering offense.
In order to implement its continued commitment and support of the global fight
against money laundering, the BSP has issued a number of measures to bring the
Philippines' regulatory regime on money laundering closer to international
standards. In September 2001, the Anti-Money Laundering Act (AMLA) of 2001 was
passed under Republic Act No. 9160. The legislation, among others, defines money
laundering as a criminal offense, prescribes penalties for such crimes committed
and forms the foundation of a central monitoring and implementing council called
the Anti-Money Laundering Council (AMLC). To combat money laundering, this law
imposes requirements on customer identification, record keeping, reporting of
covered and suspicious transactions, relaxes strict bank deposit secrecy laws, and
provides for freezing/seizure/forfeiture/recovery of dirty money/property as well as
for international cooperation.
The AMLC is comprised of three (3) members: the Governor of the Bangko Sentral
ng Pilipinas as the Chairman and the other two (2) members are the Commissioner
of the Insurance Commission and the Chairman of the Securities and Exchange
Commission. It acts unanimously in the discharge of its functions. AMLC is also
referred to as the country’s Financial Intelligence Unit (FIU) and is assisted by a
Secretariat, otherwise known as the AMLC Secretariat (AMLCS), headed by an
Executive Director.
To address concerns such as the high threshold level for covered
transactions, the coverage of “covered institutions” and the existing Bank Secrecy
Law, the amendments to the AMLA were signed into law on 7 March 2003 under
Republic Act No. 9194. The amendments included the following: a) lowering the
threshold for covered transactions from P4.0 million to P500,000; b) authorizing the
BSP to inquire or examine any deposit or investment with any banking institution
without court order in the course of a periodic or special examination; and c)
removing the provision prohibiting the retroactivity of the law.
Said amendments were given favorable consideration by the Financial Action
Task Force (FATF) and sanctions were not imposed on the Philippines. However, the
Philippines at that time remained in the list of non-cooperative countries and
territories (NCCTs) of the FATF and the country’s removal from the list will be
determined by the FATF after close monitoring of the implementation issues. The
Philippines was finally removed from the NCCT list of the FATF in February 2005 due
to excellent progress made in combating money laundering and terrorist financing.
The Revised Implementing Rules and Regulations (RIRR) on the AMLA of
2001, as amended, was approved by the Congressional Oversight Committee on 6
August 2003 and was implemented on 3 September 2003.
Second AMLA Amendment under RA 10167 – June 2012
To further strengthen the country’s AML regime and address the concerns of the
FATF, second AMLA amendment under RA 10167 was signed into law on 18 June
2012 amending for the purpose Sections 10 and 11 of the AMLA, as amended.
Section 10 relates to the “Freezing of Monetary Instrument” wherein upon verified
“ex parte” petition by the AMLC, the Court of Appeals (CA) should act on the
petition to freeze within twenty-four (24) hours from filing of the petition, and the
freeze order shall be for a period of twenty (20) days unless extended by the
Court/CA.
Section 11 relates to the “Authority to Inquire into Bank Deposits”
wherein the AMLC is given authority to examine bank accounts “upon order of any
competent court based on an ex parte application” which effectively expanded the
instances when no such court application is required. Said provision simply means
that the court may allow the AMLC to look into bank deposit accounts of suspected
money launderers without notifying them. Under this Section, the CA is directed to
act on the application to inquire into or examine any deposit or investment account
within twenty-four (24) hours from date of filing of the application. In addition,
although Section 11 of the AMLA reworded the authority of BSP to check the
compliance in the course of a periodic or special examination of a covered
institution with the requirements of the AMLA and its implementing rules and
regulations, the sponsoring Senator when asked if the BSP, without court order, may
be allowed to look into specific accounts under the proviso, Senator Guingona said
that it is only to ensure compliance with AMLA.
These two amended provisions recognized the urgency of the issuance
of the freeze order and the grant of authority to AMLC to conduct bank inquiry
within 24 hours from the filing of the petition.
This AMLA amendment under RA 10167 resulted to favorable action of
the FATF where it decided to upgrade the country's “dark gray” list to “gray”, which
is just one notch away from being taken out in the FATF list of nations considered
non-compliant to global AML standards.
After the passage of RA 10167, the Revised Implementing Rules and
Regulations (RIRR) was approved under AMLC Resolution No. 84 dated 23 August
2012. BSP disseminated said RIRR to all BSP covered institutions under BSP Circular
Letter No. CL-2012-068 dated 20 September 2012.
As continuing commitment to comply with FATF AML/CFT standards, the third AMLA
amendment under RA 10365 was passed into law on 15 February 2013 that covered
the following major amendments:
1. Expansion of the definition of the crime of money laundering: AMLC can now go
after persons who engage in the conversion, transfer, movement, disposal of,
possession, use, and concealment or disguise, of the monetary proceeds of an
unlawful activity, that was previously limited to the transaction of laundered funds
and property;
2. Inclusion of jewelry dealers in precious metals and stones whose transactions are
in excess of P1,000,000 and company service providers as defined and listed under
RA 10365, are now included as “Covered Persons”;
3. Increase of unlawful activities to money laundering from 14 to 34. The 20
additional crimes include trafficking in persons, bribery, counterfeiting, fraud and
other illegal exactions, forgery, malversation, various environmental crimes, and
terrorism and its financing;
4. Authorize the AMLC to require the Land Registration Authority and all its Register
of Deeds to submit report to the AMLC covering real estate transactions in excess of
P500,000.00;
5. Issuance of freeze order by the Court is now valid for a maximum period of six (6)
months, from the previous twenty (20) days validity under RA 10167.
Compliance with FATF International Standards
In November 2003, the Philippines’ amendments to the AMLA were
evaluated by the FATF and were found to be at par with international standards. On
11 February 2005, the Philippines, Cook Islands, and Indonesia were removed from
the list of NCCTs during the meeting of the FATF. After the country’s delisting from
the list of NCCT’s, the AMLC of the Philippines was accepted as one of seven new
members of the Egmont Group, the global network of FIUs against money
laundering and terrorist financing, making the Philippines an equal partner in the
global fight against money laundering and terrorist financing. Membership to the
Egmont Group means affording AMLC free and unlimited access to a wealth of
financial data contained in the databases of all the FIU-members of the group. All
information exchanged by FIUs are subjected to strict controls and safeguards to
ensure it is used only in an authorized manner, consistent with national provisions
on privacy and data protection.
The recent AMLA amendments under RA 10167 and RA 10365 are
testament of the Philippine’s serious commitment to further strengthen the
country’s AML regime and to address the weaknesses noted by the FATF in the
Philippine’s legal framework with regard to AML. Passage of these laws were
officially recognized and favorably considered by the FATF that are now in
substantial compliance with its AML/CFT international standards. Thus, FATF in its
February 2013 plenary meeting, shielded the Philippines from being blacklisted
again.
Other AML Initiatives Undertaken by BSP to Further Strengthen the
Country’s AML Regime
Since 2000, the BSP continued to firmly undertake several initiatives on how to
safeguard the Philippine banking system through constant reshaping of existing
AML preventive measures and implementation of appropriate policies at par with
global standards such as the following initiatives.
1. Creation of the Anti-Money Laundering Specialist Group (AMLSG) within
the Supervision and Examination Sector (SES
The AMLSG was created on 13 December 2007 under MB Resolution No. 1443 to
address the need for technical expertise in the supervision of AML activities of
banks and non-bank financial institutions (NBFIs) under the supervision and
regulation of the BSP. The Group became fully operational in November 2008 and
currently has 34 authorized plantilla positions. It is under the direct supervision of
the Managing Director, Supervision and Examination Subsector I, SES.
AMLSG aims to be BSP's core unit of highly competent, dynamic and ethical
professionals who work to ensure financial institutions (FIs) adopt and maintain
adequate and effective policies, systems and procedures that prevent them from
being used to support the laundering of proceeds from any unlawful activity. AMLSG
is tasked to develop relevant guidelines and regulations to support and guide the
AML efforts of financial institutions supervised by the BSP, ensure the effective
implementation of said policies through examination services and technical
assistance to the SES and enhance the related technical skills of the SES human
resource pool through training. In addition, AMLSG shall perform off-site monitoring
to identify those FIs whose operations present an elevated risk of money laundering
activities. AMLSG works closely with the AMLC Secretariat and various banking and
non-bank industry associations under the regulatory ambit of the BSP to foster
domestic cooperation.
Since 2008, AMLSG has conducted several AML onsite examinations, particularly
commercial banks due to their significant assets size and complex banking
activities. The Group was also principally involved in the crafting of AML rules and
regulations, such as the issuance of Circular 706 dated 5 January 2011 and the
adoption on 2 March 2012 of the AML Risk Rating System, that are discussed below.
2. Issuance of a consolidated AML regulations under BSP Circular No. 706
dated 5 January 2012, otherwise known as the Updated AML Rules and
Regulations (UARR)
UARR was issued for the purpose of consolidating all existing BSP circulars, circular
letters and other issuances related to AML. Likewise, it enhances the
implementation of the existing AML legal framework to better conform with
international standards as well as address the deficiencies noted by the joint team
of assessors from the World Bank and Asia Pacific Group on Money Laundering
during the mutual evaluation of the country in 2008.
The UARR applies to all covered institutions supervised and regulated by the BSP
including Banks, Offshore banking units, quasi banks, trust entities, non-stock
savings and loan associations, pawnshops, foreign exchange dealers, money
changers and remittance agents, electronic money issuers including their
subsidiaries and affiliates wherever they may be located.
In addition to the usual provisions on customer identification/KYC, covered and
suspicious transaction reporting and record keeping and retention requirements
that are found in the AMLA-RIRR, the UARR emphasizes the incorporation of a sound
risk management system to ensure that risks associated with money laundering and
terrorist financing are identified, assessed, monitored, mitigated and controlled by
covered institutions. A sound risk management system includes adequate and
active Board and Senior Management oversight, acceptable policies and procedures
embodied in a Money Laundering and Terrorist Financing Prevention Program
(MLPP), appropriate monitoring and Management Information System and
comprehensive internal controls and audit.
UARR encourages covered institutions to formulate a risk-based and tiered
customer acceptance and retention policies, adoption of a criteria for assessing
customers as low, normal and high risk and standards for applying reduced,
average and enhanced due diligence. It also mandates observance of extreme
caution and vigilance in dealing with high risk customers such as shell companies.
The UARR also strongly supports the Financial Inclusion advocacy promoted by the
BSP. For instance, it allows a) the outsourcing of the conduct of face-to-face contact
as well as the gathering of the KYC documents and information to establish the
identity of a customer; b) acceptance of one (1) valid ID for the conduct of financial
transactions, listing for this purpose a wide variety of acceptable IDs and the
utilization of the covered institution’s own technology to take the photo of their
customers in case the ID presented is non-photo-bearing such as TIN, barangay and
DSWD certification; and c) the third-party reliance is likewise introduced in the
UARR to avoid duplication of customer identification processes so that covered
institutions may refocus their resources to better serve and address the needs of
customers. This principle allows a covered institution such as a Bank to rely on the
KYC conducted by another covered institution.
UARR further provides that any violations of existing provisions thereof shall
constitute a major violation, that may subject the bank, its directors, officers and
staff to enforcement actions such as monetary and non-monetary penalties. The
enforcement actions shall may be imposed on the basis of the overall assessment of
a covered institution’s AML compliance system, and if found to be grossly
inadequate, such may be considered as unsafe and unsound banking practice that
may warrant initiation of prompt corrective action.
3. Adoption of AML Risk Rating System (ARRS)
No. 362 dated 2 March 2012 and disseminated to all BSP covered institutions under
Memorandum to All Banks No. 2012-017 dated 4 April 2012.
ARRS is an internal rating system to be used by BSP to understand whether the risk
management policies and practices as well as internal controls of Banks and NBFIs
to prevent money laundering and terrorist financing are in place, well disseminated
and effectively implemented. ARRS is an effective supervisory tool that undertakes
to ensure that all covered institutions as defined under Circular No. 706 are
assessed in a comprehensive and uniform manner, and that supervisory attention is
appropriately focused on entities exhibiting inefficiencies in Board of Directors the
adoption of an AML Risk Rating System (ARRS) approved under MB Resolution and
Senior Management oversight and monitoring, inadequacies in their AML
framework, weaknesses in internal controls and audit and defective implementation
of internal policies and procedures.
Under the ARRS, each covered institution is assigned a Numerical and Adjectival
Composite Rating (4 as the highest – sound; 3 – adequately sound; 2- vulneralbe;
and 1 as the lowest – grossly inadequate) based on the assessment of the following
four (4) components:
1. Component I- Efficient Board of Directors (BOD) and Senior Management (SM)
Oversight (“Management”);
2. Component II- Sound AML policies and procedures embodied in a Money
Laundering and Terrorist Financing Prevention Program duly approved by the Board
of Directors (“MLPP”);
3. Component III- Robust internal controls and audit (“Controls and Audit”); and
4. Component IV- Effective implementation (“Implementation”).
Evaluation of the four (4) components takes into consideration the covered
institution’s responses to various questions that are designed to comprehend its
business operations as well as its risk profile. The responses will be assessed and
on-site examination will confirm their veracity and accuracy. Based on the
evaluation of the existence or non-existence of the each of the above components,
BSP covered institutions are assigned a Numerical and Adjectival Component Rating
that also ranges from 4 as the highest and 1 as the lowest. After considering the
four components, enforcement actions proportional to the Composite Rating are
recommended to ensure that BSP covered institutions take necessary measures to
improve their risk management policies and practices.
4. Proactive issuance of AML Regulations on Ongoing Basis since 2000
Aside from AML Circulars, BSP also issues on an ongoing basis Circular-Letters since
2000 to disseminate resolutions adopted by the AMLC covering updates of
guidelines on reporting of suspicious transactions or identifying suspected
individuals or organizations (local and international) known to be involved in money
laundering and other illegal activities, particularly those included in the United
Nations Sanctions List.
In addition, BSP has issued several media releases and other public advisories to
disseminate certain suspicious or illegal activities to make the public fully aware of
them.
Money laundering is the process whereby the proceeds of crime are
transformed into ostensibly legitimate money or other assets.[1] However, in a
number of legal and regulatory systems the term money laundering has become
conflated with other forms of financial crime, and sometimes used more generally
to include misuse of the financial system (involving things such as securities, digital
currencies, credit cards, and traditional currency), including terrorism financing, tax
evasion and evading of international sanctions. Most anti-money laundering laws
openly conflate money laundering (which is concerned with source of funds) with
terrorism financing (which is concerned with destination of funds) when regulating
the financial system. Money obtained from certain crimes, such as extortion, insider
trading, drug trafficking, illegal gambling and tax evasion is "dirty". It needs to be
cleaned to appear to have derived from non-criminal activities so that banks and
other financial institutions will deal with it without suspicion. Money can be
laundered by many methods, which vary in complexity and sophistication. Different
countries may or may not treat tax evasion or payments in breach of international
sanctions as money laundering. Some jurisdictions differentiate these for definition
purposes, and others do not. Some jurisdictions define money laundering as
obfuscating sources of money, either intentionally or by merely using financial
systems or services that do not identify or track sources or destinations. Other
jurisdictions define money laundering to include money from activity that would
have been a crime in that jurisdiction, even if it were legal where the actual conduct
occurred. This broad brush of applying the term "money laundering" to merely
incidental, extraterritorial, or simply privacy-seeking behaviours has led some to
label it "financial thought crime".
Many regulatory and governmental authorities issue estimates each year for the
amount of money laundered, either worldwide or within their national economy. In
1996, the International Monetary Fund estimated that two to five percent of the
worldwide global economy involved laundered money. The Financial Action Task
Force on Money Laundering (FATF), an intergovernmental body set up to combat
money laundering, stated, "Overall, it is absolutely impossible to produce a reliable
estimate of the amount of money laundered and therefore the FATF does not
publish any figures in this regard."[4] Academic commentators have likewise been
unable to estimate the volume of money with any degree of assurance.[5] Various
estimates of the scale of global money laundering are sometimes repeated often
enough to make some people regard them as factual—but no researcher has
overcome the inherent difficulty of measuring an actively concealed practice.
Regardless of the difficulty in measurement, the amount of money laundered
each year is in the billions (US dollars) and poses a significant policy concern for
governments. As a result, governments and international bodies have undertaken
efforts to deter, prevent, and apprehend money launderers. Financial institutions
have likewise undertaken efforts to prevent and detect transactions involving dirty
money, both as a result of government requirements and to avoid the reputational
risk involved. Issues relating to money laundering have existed as long as there
have been large scale criminal enterprises. Modern anti-money laundering laws
have developed along with the modern War on Drugs. In more recent times anti-
money laundering legislation is seen as adjunct to the financial crime of terrorist
financing in that both crimes usually involve the transmission of funds through the
financial system.
Money laundering is commonly defined as occurring in three steps:
The first step involves introducing cash into the financial system by some means
("placement");
The second involves carrying out complex financial transactions to camouflage the
illegal source ("layering");
And the final step entails acquiring wealth generated from the transactions of the
illicit funds ("integration"). Some of these steps may be omitted, depending on the
circumstances; for example, non-cash proceeds that are already in the financial
system would have no need for placement.
Money laundering takes several different forms, although most methods
can be categorized into one of a few types. These include "bank methods, smurfing
[also known as structuring], currency exchanges, and double-invoicing"
Anti-money laundering (AML) is a term mainly used in the financial and legal
industries to describe the legal controls that require financial institutions and other
regulated entities to prevent, detect, and report money laundering activities. Anti-
money laundering guidelines came into prominence globally as a result of the
formation of the Financial Action Task Force (FATF) and the promulgation of an
international framework of anti-money laundering standards. These standards
began to have more relevance in 2000 and 2001, after FATF began a process to
publicly identify countries that were deficient in their anti-money laundering laws
and international cooperation, a process colloquially known as "name and shame".
An effective AML program requires a jurisdiction to have criminalized money
laundering, given the relevant regulators and police the powers and tools to
investigate; be able to share information with other countries as appropriate; and
require financial institutions to identify their customers, establish risk-based
controls, keep records, and report suspicious activities.
Global Organizations working against money laundering
Formed in 1989 by the G7 countries, the FATF is an intergovernmental body whose
purpose is to develop and promote an international response to combat money
laundering. The FATF Secretariat is housed at the headquarters of the OECD in
Paris. In October 2001, FATF expanded its mission to include combating the
financing of terrorism. FATF is a policy-making body that brings together legal,
financial, and law enforcement experts to achieve national legislation and
regulatory AML and CFT reforms. As of 2014 its membership consists of 36 countries
and territories and two regional organizations. FATF works in collaboration with a
number of international bodies and organizations. These entities have observer
status with FATF, which does not entitle them to vote, but permits them full
participation in plenary sessions and working groups. FATF has developed 40
recommendations on money laundering and 9 special recommendations regarding
terrorist financing. FATF assesses each member country against these
recommendations in published reports. Countries seen as not being sufficiently
compliant with such recommendations are subjected to financial sanctions.
FATF's three primary functions with regard to money laundering are:
1. Monitoring members’ progress in implementing anti-money laundering measures.
2. Reviewing and reporting on laundering trends, techniques, and countermeasures.
3. Promoting the adoption and implementation of FATF anti-money laundering
standards globally.
The bill that would strengthen the Anti-money laundering council will include foreign
exchange establishments, real estate dealers, and jewelry and precious metal
dealers in the list of those that should report any suspicious transactions.
A provision that includes casinos in the list was previously proposed by Senate
President Juan Ponce Enrile. This provision however was not accepted by the panel
of the House of Representatives during the bicameral conference.
Senator Teofisto Guingona III had said that if the Senate panel refused the removal
of the provision on casinos, they would not be able to get the bill through with the
limited time left.
“There is a deadlock and time is running out. If both panels maintain their position…
we would have no law,” Guingona said.
The Senate is set to go into recess on Wednesday to give way to the May 2013
election campaign.
The Philippines faces being blacklisted by the International Financial Action Task
Force (FATF) if it fails to pass the bill.
The Philippine Amusement and Gaming Corp (Pagcor) will come out with a set of
rules to monitor suspicious transactions even after casinos have been excluded
from the coverage of the recently amended Anti-Money Laundering Act (AMLA).
Pagcor vice president for gaming and licensing development Francis Hernando said
the state-gaming firm has started drafting the rules that could be implemented
starting September this year.
“There will be a set of rules. We’re actually developing a set of rules in time for the
opening of Solaire,” Hernando told Senate reporters, referring to Bloomberry’s
Solaire Manila Resorts and Casio, one of four license holders of Pagcor’s
Entertainment City project.
“Our casino regulations and part of those casino regulations will touch on
monitoring transactions that may be deemed to be say suspicious under the AMLA,’
he said.
A proposal requiring casinos to report suspicious transactions was rejected by
Congress when it approved early this month a bill that seeks to strengthen the
AMLA.
Despite this, Hernando said Pagcor would police its own to strengthen its regulatory
power and be at par with international standards.
“I think if we want to be international class and recognized worldwide, we have to
police ourselves properly,” he said.
“We’d like to hopefully be recognized as a serious jurisdiction internationally. The
way Macau and Singapore and Las Vegas, New Jersey, Australia do it, there is a
formal set of rules that is applied to everybody for a level playing field,” said
Hernando.
“The rules are predictable, there are set sanctions for certain infractions and we’ve
all put this and codified these into a manual. And that manual that’s under
development. The first draft has already been approved by our board and we’re
hoping that the formal form will be finished by September,” Hernando added.
President Benigno Aquino III signed on Friday the measure amending the Anti-
Money Laundering Act (Amla).
Deputy presidential spokesperson Abigail Valte made the announcement in a text
message sent out to the media.
Republic Act No. 10365 is also known as an “Act Strengthening the Anti-Money
Laundering Law.”
Valte confirmed that the law would shield the country from being blacklisted by the
International Financial Action Task Force (FATF).
“Yes, this is the third law required to keep us off the FATF blacklist. The first two
were passed last year,” she said.
Valte, however, couldn’t cite highlights of the new law as she had yet to see the
“final copy.”
“I need to compare it with the old one (law) first. I’ll be in a better position to give
you details once I have the signed copy,” said Valte.
A blacklist could mean difficulties for overseas Filipinos sending money home as
more documentation would be required from them as a result of the country’s
blacklisting.
The bicameral conference committee approved amendments to Amla last week.
The law strengthens the antimoney-laundering council by requiring foreign
exchange establishments, real estate dealers, and jewelry and precious metal
dealers to report any suspicious transactions.
A set of procedures, laws or regulations designed to stop the practice of
generating income through illegal actions. In most cases money launderers hide
their actions through a series of steps that make it look like money coming from
illegal or unethical sources was earned legitimately.
Though anti-money-laundering laws cover only a relatively limited number of
transactions and criminal behaviors, their implications are extremely far reaching.
An example of AML regulations are those that require institutions issuing credit or
allowing customers open accounts to complete a number of due-diligence
procedures to ensure that these institutions are not aiding in money-laundering
activities. The onus to perform these procedures is on the institutions, not the
criminals or the government.
MANILA, Philippines - Amendments to the “dirty money” law which expanded its
covered institutions and crimes are set to take effect this month.
Republic Act (RA) 10365, which amended certain provisions of the Anti-Money
Laundering Act (AMLA) of 2001, was signed into law by President Aquino last Feb.
15. The law will take effect 15 days after publication in a newspaper or by April 19.
It was among the measures enacted for the Philippines to avoid getting blacklisted
by the Financial Action Task Force (FATF), a global anti-money laundering
watchdog.
Since then, FATF has kept the Philippines under its grey list, which signified
commitment to pass reforms. Being blacklisted would have meant higher financial
transaction costs, especially for Filipinos abroad.
The Paris-based FATF has scheduled an “on-site visit” to inspect if AMLA reforms are
being implemented accordingly. A total of three laws- including RA 10365 – have
been passed to address FATF concerns.
Under RA 10365, foreign exchange corporations, money changers, pre-need and
insurance companies were included in covered firms required to report transactions
of P500,000 and above to the Anti-Money Laundering Council (AMLC).
Jewelry dealers will be required to do so for transactions worth P1 million and above,
it added. Originally, only banks, quasi-banks and non-bank financial
The law also required the Land Registration Authority to submit to AMLC reports
covering real estate purchases worth P500,000 and up.
Aside from this, predicate crimes- or those criminal acts where the law may also be
applied if money is involved- were also expanded to cover 20 other acts, including
bribery, extortion, malversation of public funds, fraud and financing of terrorism.
The original law only mentioned 14 acts connected to money laundering such as
kidnapping, piracy on high seas, smuggling, robbery and plunder.
Despite AMLA having more teeth, RA 10365 still prevented AMLC to “participate in
any manner” in the operations of the Bureau of Internal Revenue, which effectively
banned it to intervene in the collection of taxes in pursuit of its mandate.
Two other laws were passed last year in order for the Philippines to comply with
FATF requirements. They are RA 10168 and 10167, which respectively criminalized
terrorist financing activities and gave AMLC the power to examine bank accounts
without the owner’s consent.
Who are these Money Laundering and Terrorist Financing regulations
aimed at? Suspicious foreigners who might want to do something unconscionable
like buy a house or condo? If our governments had spent a tenth as much time
watching what was happening on Wall Street as they wasted chasing imaginary
terrorists we'd all be in much better shape now.
In many parts of the world, such crime-fighting assets cannot be taken for granted.
In some countries, particularly those in the developing world, the challenges may be
more fundamental, but the end result is the same, which is a financial sector
vulnerable to abuse by criminals.
While much progress has been made on the legislative front, with most of the
world’s countries now signed up to relevant United Nations conventions and other
key international standards and agreements, the UNODC said the capacity of
countries to make proper use of them varies significantly.
Some countries have an insufficient institutional framework with deficiencies in the
regulatory system, financial intelligence unit and/or enforcement mechanisms.
Others have more basic needs, such as an electronic population registry, access to
fast and reliable Internet and communication services, or computer equipment and
software needed to keep track of financial movements.