Module 2 Tila & Amla
Module 2 Tila & Amla
Module 2 Tila & Amla
8. Consequences of non-compliance with the requirement of TILA. What are the penalties
in case of violation?
- Section 6. (c) Any person who willfully violates any provision of this Act or any
regulation issued thereunder shall be fined by not less than P1,000 or more than P5,000
or imprisonment for not less than 6 months, nor more than one year or both.
- Non-compliance with any of the provisions of this Section may be subject to appropriate
monetary penalties under Sec. 1102, depending on the severity of non-disclosure, number
of loans and amount involved in the violation. In addition to sanctions under R.A. No.
3765, the following sanctions may be imposed:
a.) First offense. Reprimand on the erring officer/s;
b.) Second offense. Reprimand on the entire board of directors; and
c.) Subsequent offense/s:
1. Suspension of the erring officer/s and/ or entire board of directors; and
2. Restriction on lending activities.
- This is without prejudice to other penalties and sanctions provided under Sections 36
and 37 of R.A. No. 7653.
ANTI-MONEY LAUNDERING ACT OF 2001 (RA 9160)
As amended by RA 9194 and RA 10167
1. Declared policies of AMLA
- Section 2. It is hereby declared the policy of the State to protect and preserve the
integrity and confidentiality of bank accounts and to ensure that the Philippines shall not
be used as a money laundering site for the proceeds of any unlawful activity. Consistent
with its foreign policy, the State shall extend cooperation in transnational investigations
and prosecutions of persons involved in money laundering activities wherever committed.
a. Covered Institution
- "Covered Institution" refers to:
a.) Banks, offshore banking units, quasi-banks, trust entities, nonstock savings and
loan associations, pawnshops, and all other institutions, including their
subsidiaries and affiliates supervised and/or regulated by the Bangko Sentral ng
Pilipinas (BSP).
1.) A subsidiary means an entity more than fifty percent (50%) of the
outstanding voting stock of which is owned by a bank, quasi-bank, trust
entity or any other institution supervised or regulated by the BSP.
2.) An affiliate means an entity at least twenty percent (20%) but not exceeding
fifty percent (50%) of the voting 'stock of which is owned by a bank, quasi-
bank, trust entity, or any other institution supervised and/or regulated by the
BSP
b.) Insurance companies, insurance agents, insurance brokers, professional
reinsurers, reinsurance brokers, holding companies, holding company systems
and all other persons and entities supervised and/or regulated by the Insurance
Commission (IC).
1.) An insurance company includes those entities authorized to transact
insurance business in the Philippines, whether life or non- life and whether
domestic, domestically incorporated or branch of a foreign entity. A contract
of insurance is an agreement whereby one undertakes for a consideration to
indemnify another against loss, damage or liability arising from an unknown
or contingent event. Transacting insurance business includes making or
proposing to make, as insurer, any insurance contract, or as surety, any
contract of suretyship as a vocation and not as merely incidental to any other
legitimate business or activity of the surety, doing any kind of business
specifically recognized as constituting the doing of an insurance business
within the meaning of Presidential Decree (P.D.) No. 612, as amended,
including a reinsurance business and doing or proposing to do any business
in substance equivalent to any of the foregoing in a manner designed to
evade the provisions of P.D. No. 612, as amended.
2.) An insurance agent includes any person who solicits or obtains insurance on
behalf of any insurance company or transmits for a person other than
himself an application for a policy or contract of insurance to or from such
company or offers or assumes to act in the negotiation of such insurance.
3.) An insurance broker includes any person who acts or aids in any manner in
soliciting, negotiating or procuring the making of any insurance contract or
in placing risk or taking out insurance, on behalf of an insured other than
himself.
4.) A professional reinsurer includes any person, partnership, association or
corporation that transacts solely and exclusively reinsurance business in the
Philippines, whether domestic, domestically incorporated or a branch of a
foreign entity. A contract of reinsurance is one by which an insurer procures
a third person to insure him against loss or liability by reason of such
original insurance.
5.) A reinsurance broker includes any person who, not being a duly authorized
agent, employee or officer of an insurer in which any reinsurance is effected,
acts or aids in any manner in negotiating contracts of reinsurance or placing
risks of effecting reinsurance, for any insurance company authorized to do
business in the Philippines.
6.) A holding company includes any person who directly or indirectly controls
any authorized insurer. A holding company system includes a holding
company together with its controlled insurers and controlled persons.
c.) (i) Securities dealers, brokers, salesmen, associated persons of brokers or
dealers, investment houses, investment agents and consultants, trading advisors,
and other entities managing securities or rendering similar services;
(ii) mutual funds or open-end investment companies, close-end investment
companies, common trust funds, pre-need companies or issuers 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 and/or regulated by the Securities
and Exchange Commission (SEC).
1.) A securities broker includes a person engaged in the business of buying and
selling securities for the account of others.
2.) A securities dealer includes any person who buys and sells securities for
his/her account in the ordinary course of business.
3.) A securities salesman includes a natural person, employed as such-or as an
agent, by a dealer, issuer or broker to buy and sell securities.
4.) An associated person of a broker or dealer includes an employee thereof
who directly exercises control or supervisory authority, but does not include
a salesman, or an agent or a person whose functions are solely clerical or
ministerial.
5.) An investment house includes an enterprise which engages or purports to
engage, whether regularly or on an isolated basis, in the underwriting of
securities of another person or enterprise, including securities of the
Government and its instrumentalities.
6.) A mutual fund or an open-end investment company includes an investment
company which is offering for sale or has outstanding, any redeemable
security of which it is the issuer.
7.) A closed-end investment company includes an investment company other
than open-end investment company.
8.) A common trust fund includes a fund maintained by an entity authorized to
perform trust functions under a written and formally established plan,
exclusively for the collective investment and reinvestment of certain money
representing participation in the plan received by it in its capacity as trustee,
for the purpose of administration, holding or management of such funds
and/or properties for the use, benefit or advantage of the trustor or of others
known as beneficiaries.
9.) A pre-need company or issuer includes any corporation supervised and/or
regulated by the SEC and is authorized or licensed to sell or offer for sale
pre-need plans. Pre-need plans are contracts which provide for the
performance of future service(s) or payment of future monetary
consideration at the time of actual need, payable either in cash or
installment by the plan holder at prices stated in the contract with or without
interest or insurance coverage and includes life, pension, education,
internment and other plans, which the Commission may, from time to time,
approve.
10.) A foreign exchange corporation includes any enterprise which engages or
purports to engage, whether regularly or on isolated basis, in the sale and
purchase of foreign currency notes and such other foreigncurrency
denominated non-bank deposit transactions as may be authorized under its
articles of incorporation.
11.) Investment Advisor/Agent/Consultant shall refer to any person:
i. who for an advisory fee is engaged in the business of advising others,
either directly or through circulars, reports, publications or writings,
as to the value of any security and as to the advisability of trading in
any security; or
ii. who for compensation and as part of a regular business, issues or
promulgates, analyzes reports concerning the capital market, except:
a) any bank or trust company;
b) any journalist, reporter, columnist, editor, lawyer, accountant,
teacher;
c) the publisher of any bonafide newspaper, news, business or
financial publication of general and regular circulation,
including their employees;
d) any contract market;
e) such other person not within the intent of this definition, provided
that the furnishing of such service by the foregoing persons is
solely incidental to the conduct of their business or profession.
iii. any person who undertakes the management of portfolio securities of
investment companies, including the arrangement of purchases, sales
or exchanges of securities.
12.) A moneychanger includes any person in the business of buying or selling
foreign currency notes.
13.) A money payment, remittance and transfer company includes any person
offering to pay, remit or transfer or transmit money on behalf of any person
to another person.
14.) “Customer" refers to any person or entity that keeps an account, or
otherwise transacts business, with a covered institution and any person or
entity on whose behalf an account is maintained or a transaction is
conducted, as well as the beneficiary of said transactions. A customer also
includes the beneficiary of a trust, an investment fund, a pension fund or a
company or person whose assets are managed by an asset manager, or a
grantor of a trust. It includes any insurance policy holder, whether actual or
prospective.
15.) "Property" includes any thing or item of value, real or personal, tangible
or intangible, or any interest therein or any benefit, privilege, claim or right
with respect thereto.
b. Covered Transaction
- COVERED TRANSACTION is a transaction in cash or other equivalent monetary
instrument involving a total amount in excess of five hundred thousand pesos
(php500,000.00) within one (1) banking day.
- Suspicious transactions are transactions, regardless of amount, where any of the
following circumstances exists:
a) There is no underlying legal or trade obligation, purpose or economic
justification;
b) The client is not properly identified;
c) The amount involved is not commensurate with the business or financial
capacity of the client;
d) 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;
e) 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;
f) The transaction is in any way related to an unlawful activity or any money
laundering activity or offense under this act that is about to be, is being or
has been committed; or
g) Any transaction that is similar, analogous or identical to any of the foregoing.
c. Monetary Instrument
1) Coins or currency of legal tender of the Philippines, or of any other country;
2) Drafts, checks and notes;
3) 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;
4) Contracts or policies of insurance, life or non-life, and contracts of suretyship;
and
5) Other similar instruments where title thereto passes to another by endorsement,
assignment or delivery.
d. Offender
- “Offender” refers to any person who commits a money laundering offense.
e. Person
- “Person” refers to any natural or juridical person.
f. Proceeds
- "Proceeds" refers to an amount derived or realized from an unlawful activity. It
includes:
(1) All material results, profits, effects and any amount realized from any
unlawful activity;
(2) All monetary, financial or economic means, devices, documents, papers
or things used in or having any relation to any unlawful activity; and
(3) All moneys, expenditures, payments, disbursements, costs, outlays,
charges, accounts, refunds and other similar items for the financing,
operations, and maintenance of any unlawful activity
g. Supervising Authority
- "Supervising Authority" refers to the BSP, the SEC and the IC. Where the BSP, SEC
or IC supervision applies only to the registration of the covered institution~ the BSP,
the SEC or the IC, within the limits of the AMLA, shall have the authority to require
and ask assistance from the government agency having regulatory power and/or
licensing authority over said covered institution for the implementation and
enforcement of the AMLA and these Rules.
h. Transaction
- "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
- "Unlawful activity" refers to any act or omission or series or combination thereof
involving or having relation, to the following:
Law Inclusion
1) Kidnapping for ransom under Kidnapping for Ransom
Article 267 of Act No. 3815,
otherwise known as the
Revised Penal Code, as
amended;
2) Sections 4, 5, 6, 8, 9, 10,
12,13, 14, 15 and 16 of - Importation of prohibited drugs;
Republic Act No. 9165, - Sale of prohibited drugs;
otherwise known as the - Administration of prohibited drugs;
COMPREHENSIVE - Delivery of prohibited drugs
Dangerous Drugs Act of 2002; - Distribution of prohibited drugs
- Transportation of prohibited drugs
- Maintenance of a Den, Dive or Resort for prohibited
users
- Manufacture of prohibited drugs
- Possession of prohibited drugs
- Use of prohibited drugs
- Cultivation of plants which are sources of prohibited
drugs
- Culture of plants which are sources of prohibited drug
3) Section 3 paragraphs b, c, e, g,
h and i of Republic Act No. a. Directly or indirectly requesting or receiving any gift,
3019, as amended, otherwise present, share, percentage or benefit for himself or for
known as the Anti-Graft and any other person in connection with any contract or
Corrupt Practices Act; transaction between the Government and any party,
wherein the public officer in his official capacity has to
intervene under the law;
b. Directly or indirectly requesting or receiving any gift,
present or other pecuniary or material benefit, for
himself or for another, from any person for whom the
public officer, in any manner or capacity, has secured
or obtained, or will secure or obtain, any government
permit or license, in consideration for the help given or
to be given, without prejudice to Section 13 of R.A.
3019;
c. Causing any undue injury to any party, including the
government, or giving any private party any
unwarranted benefits, advantage or preference in the
discharge of his official, administrative or judicial
functions through manifest partiality, evident bad faith
or gross inexcusable negligence;
d. Entering, on behalf of the government, into any
contract or transaction manifestly and grossly
disadvantageous to the same, whether or not the public
officer profited or will profit thereby;
e. Directly or indirectly having financial or pecuniary
interest in any business contract or transaction in
connection with which he intervenes or takes part in
his official capacity, or in which he is prohibited by the
Constitution or by any law from having any interest;
f. Directly or indirectly becoming interested, for personal
gain, or having material interest in any transaction or
act requiring the approval of a board, panel or group
of which he is a member, and which exercise of
discretion in such approval, even if he votes against
the same or he does not participate in the action of the
board, committee, panel or group.
11) Violations under Republic Act - Hacking or cracking, which refers to:
No. 8792, otherwise known as a. unauthorized access into or interference in a
the Electronic Commerce Act computer system/server or information and
of 2000 communication system; or
b. any access in order to corrupt, alter, steal, or
destroy using a I computer or other similar
information and communication devices, without
the knowledge and consent of the owner of the
computer or information and communications
system, including
c. the introduction of computer viruses and the like,
resulting in the corruption, destruction, alteration,
theft or loss of electronic data messages or
electronic document
- Piracy, which refers to:
a. the unauthorized copying, reproduction,
b. the unauthorized dissemination, distribution,
c. the unauthorized importation,
d. the unauthorized use, removal, alteration,
substitution, modification,
e. the unauthorized storage, uploading, downloading,
communication, making available to the public, or
f. the unauthorized broadcasting,
b. Closed Accounts
- With respect to closed accounts, the records on customer identification, account files
and business correspondence shall be preserved and safely stored for at least five (5)
years from the dates when they were closed
d. Form of Records
- Records shall be retained as originals in such forms as are admissible in court
pursuant to existing laws and the applicable rules promulgated by the Supreme
Court.
13. What are penalties and other consequences for violating AMLA?
Penalties for the Crime of Money Laundering
16. When examination of accounts under AMLA is done, notwithstanding the provisions of
secrecy of bank deposits. Does AMLA provide safe harbor provision?
- No administrative, criminal or civil proceedings, shall lie against any person for having
made a covered transaction report OR A SUSPICIOUS transaction report in the regular
performance of his duties and in good faith, whether or not such reporting results in any
criminal prosecution under this Act or any other Philippine law.