Module 2 Tila & Amla

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TRUTH IN LENDING ACT (RA 3765)

1. What is the truth in lending act?


- Clients know the real price, terms, and conditions of financial products/services
- The truth in Lending Act (TILA) protects you against inaccurate and unfair credit billing
and credit card practices. It requires lenders to provide you with loan cost information
so that you can comparison shop for certain types of loan.

2. What is the purpose of the law?


- Aims to protect citizens from a lack of awareness of the true cost of credit by assuring a
full disclosure of such cost with a view of preventing the uninformed use of credit to the
detriment of the national economy
- Informed clients make informed decisions

3. What is the policy of the state in the context of RA 3765?


- Section 2. It is hereby declared to be the policy of the State to protect its citizens from a
lack of awareness of the true cost of credit to the user by assuring a full disclosure of
such cost with a view of preventing the uninformed use of credit to the detriment of the
national economy.

4. What is the obligation of creditors to persons to whom credit is extended?


- Section 4. Any creditor shall furnish to each person to whom credit is extended, prior to
the consummation of the transaction, a clear statement in writing setting forth, to the
extent applicable and in accordance with rules and regulations prescribed by the Board,
the following information:
a.) the cash price or delivered price of the property or service to be acquired;
b.) the amounts, if any, to be credited as down payment and/or trade-in;
c.) the difference between the amounts set forth under clauses (1) and (2);
d.) the charges, individually itemized, which are paid or to be paid by such person in
connection with the transaction but which are not incident to the extension of
credit;
e.) the total amount to be financed;
f.) the finance charge expressed in terms of pesos and centavos; and
g.) the percentage that the finance bears to the total amount to be financed expressed
as a simple annual rate on the outstanding unpaid balance of the obligation.

5. What are the covered transactions?


- The following regulations shall apply to all banks engaged in the following types of
credit transactions:
a.) Any loan, mortgage, deed of trust, advance and discount;
b.) Any conditional sales contract, any contract to sell, or sale or contract of sale of
property or services, either for present or future delivery, under which part or all
of the price is payable subsequent to the making of such sale or contract;
c.) Any rental-purchase contract;
d.) Any contract or arrangement for the hire, bailment, or leasing of property;
e.) Any option, demand, lien, pledge, or other claim against, or for delivery of,
property or money;
f.) Any purchase, or other acquisition of, or any credit upon security of any
obligation or claim arising out of any of the foregoing; and
g.) Any transaction or series of transactions having a similar purpose or effect.

6. Is the law applicable only to banks and other financial institutions?


- No. The Act applies to all. Not a new regulation, only an enhancement of
implementation.

7. What are the excluded transactions?


- The following categories of credit transactions are outside the scope of these
regulations:
a.) Credit transactions which do not involve the payment of any finance charge by the
debtor; and
b.) Credit transactions in which the debtor is the one specifying a definite and fixed set of
credit terms such as bank deposits, insurance contracts, sale of bonds, etc.

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.

2. Transactions covered by AMLA


- ‘Covered transaction’ is a transaction in cash or other equivalent monetary instrument
involving a total amount in excess of Five hundred thousand pesos (P500,000.00) or an
equivalent amount in foreign currency based on the prevailing exchange rate within one
(1) banking day except those between a covered institution and a person who, at the time
of the transaction was a properly identified client and the amount is commensurate with
the business or financial capacity of the client; or those with an underlying legal or trade
obligation, purpose, origin or economic justification.
- It likewise refers to a single, series or combination or pattern of unusually large and
complex transactions in excess of Four million Philippine pesos (Php4,000,000.00)
especially cash deposits and investments having no credible purpose or origin,
underlying trade obligation or contract.
- ‘Suspicious transaction’ are transactions with covered institutions, regardless of the
amounts involved, where any of the following circumstances exist:
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 offense under this Act
that is about to be, is being or has been committed; or
g.) any transaction that is similar or analogous to any of the foregoing.

3. Define the following terms:

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.

4) Plunder under Republic Act


No. 7080, as amended; a. Plunder through misappropriation, conversion, misuse
or malversation of public funds or raids upon the
public treasury;
b. Plunder by receiving, directly or indirectly, any
commission, gift, share, percentage, kickbacks or any
other form of pecuniary benefit from any person and/or
entity in connection with any government contract or
project or by reason of the office or position of the
public officer concerned;
c. Plunder by the illegal or fraudulent conveyance or
disposition of assets belonging to the National
Government or any of its subdivisions, agencies,
instrumentalities or government-owned or controlled
corporations or their subsidiaries;
d. Plunder by obtaining, receiving or accepting, directly
or indirectly, any shares of stock, equity or any other
form of interest or participation including the promise
of future employment in any business enterprise or
undertaking;
e. Plunder by establishing agricultural, industrial or
commercial monopolies or other combinations and/or
implementation of decrees and orders intended to
benefit particular persons or special interests;
f. Plunder by taking undue advantage of official position,
authority, relationship, connection or influence to
unjustly enrich himself or themselves at the expense
and to the damage and prejudice of the Filipino people
and the Republic of the Philippines

5) Robbery and extortion under


Articles 294, 295, 296, 299, - Robbery with violence or intimidation of persons;
300, 301 and 302 of the - Robbery with physical injuries, committed in an
Revised Penal Code, as uninhabited place and by a band, or with use of
amended; firearms on a street, road or alley;
- Robbery in an uninhabited house or public building or
edifice devoted to worship.

6) Jueteng and Masiao punished


- Jueteng
as illegal gambling under
- Masiao
Presidential Decree No. 1602
7) Piracy on the high seas under
a. Piracy on the high seas;
the Revised Penal Code, as
b. Piracy in inland Philippine waters;
31nended and Presidential
c. Aiding and abetting pirates and brigands
Decree No. 532
8) Qualified theft under Article
310 of the Revised Penal Qualified theft
Code, as amended
9) Swindling 'under Article 315
of the Revised Penal Code, as a. Estafa with unfaithfulness or abuse of confidence by
amended altering the substance, quality or quantity of anything
of value which the offender shall deliver by virtue of an
obligation to do so, even though such obligation be
based on an immoral or illegal consideration;
b. Estafa with unfaithfulness or abuse of confidence by
misappropriating or converting, to the prejudice of
another, money, goods or any other personal property
received by the offender in trust or on commission, or
for administration, or under any other obligation
involving the duty to make delivery or to return the
same, even though such obligation be totally or
partially guaranteed by a bond; or by denying having
received such money, goods, or other property;
c. Estafa with unfaithfulness or abuse of confidence by
taking undue advantage of the signature of the
offended party in blank, and by writing any document
above such signature in blank, to the prejudice of the
offended party or any third person;
d. Estafa by using a fictitious name, or falsely pretending
to possess power, influence, qualifications, property,
credit, agency, business or imaginary transactions, or
by means of other similar deceits;
e. Estafa by altering the quality, fineness or weight of
anything pertaining to his art or business;
f. Estafa by pretending to have bribed any government
employee;
g. Estafa by postdating a check, or issuing a check in
payment of an obligation when the offender has no
funds in the bank, or his funds deposited therein were
not sufficient to cover the amount of the check;
h. Estafa by inducing another, by means of deceit, to sign
any document;
i. Estafa by resorting to some fraudulent practice to
ensure success in a gambling game;
j. Estafa by removing, concealing or destroying, in whole
or in part, any court record, office files, document or
any other papers.

10) Smuggling under Republic Act


Nos. 455 and 1937 - Fraudulent importation of any vehicle;
- Fraudulent exportation of any vehicle;
- Assisting in any fraudulent importation;
- Assisting in any fraudulent exportation;
- Receiving smuggled article after fraudulent
importation;
- Concealing smuggled article after fraudulent
importation;
- Buying smuggled article after fraudulent importation;
- Selling smuggled article after fraudulent importation;
- Transportation of smuggled article after fraudulent
importation;
- Fraudulent practices against customs revenue.

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,

of protected material, electronic signature or


copyrighted works including legally protected sound
recordings or phonograms or information material on
protected works, through the use of telecommunication
networks, such but not limited to, the internet, in a
manner that infringes intellectual property rights;
- Violations of the Consumer Act or Republic Act No.
7394 and other relevant or pertinent laws through
transactions covered by or using electronic data
messages or electronic documents:
a. Sale of any consumer product that is not in
conformity with standards under the Consumer
Act; (65) Sale of any product that has been banned
by a rule under the Consumer Act; , (66) Sale of
any adulterated or mislabeled product using
electronic documents; (67) Adulteration or
misbranding of any consumer product; (68)
Forging, counterfeiting or simulating any mark,
stamp, tag, label
b. or other identification device;
c. Revealing trade secrets;
d. Alteration or removal of the labeling of any drug or
device held for sale;
e. Sale of any drug or device not registered in
accordance with the provisions of the E-Commerce
Act;
f. Sale of any drug or device by any person not
licensed in accordance with the provisions of the
E-Commerce Act;
g. Sale of any drug or device beyond its expiration
date;
h. Introduction into commerce of any mislabeled or
banned hazardous substance;
i. Alteration or removal of the labeling of a
hazardous substance;
j. Deceptive sales acts and practices;
k. Unfair or unconscionable sales acts and practices;
l. Fraudulent practices relative to weights and
measures;
m. False representations in advertisements as the
existence of a warranty or guarantee;
n. Violation of price tag requirements;
o. Mislabeling consumer products;
p. False, deceptive or misleading advertisements;
q. Violation of required disclosures on consumer
loans;
r. Other violations of the provisions of the E-
Commerce Act;
12) Hijacking and other violations
under Republic Act No. 6235;
- Hijacking;
destructive arson and murder,
- Destructive arson;
as defined under the Revised
- Murder;
Penal Code, as amended,
- Hijacking, destructive arson or murder perpetrated by
including those perpetrated by
terrorists against non-combatant persons and similar
terrorists against non-
targets;
combatant persons and similar
targets
13) Fraudulent practices and a. Sale, offer or distribution of securities within the
other violations under Philippines without a registration statement duly filed
Republic Act No. 8799, with and approved by the SEC;
otherwise known as the b. Sale or offer to the public of any pre-need plan not in
Securities Regulation Code of accordance with the rules and regulations which the
2000 SEC shall prescribe;
c. Violation of reportorial requirements imposed upon
issuers of securities;
d. Manipulation of security prices by creating a false or
misleading appearance of active trading in any listed
security traded in an Exchange or any other trading
market;
e. Manipulation of security prices by effecting, alone or
with others, a series of transactions in securities that
raises their prices to induce the purchase of a security,
whether of the same or different class, of the same
issuer or of a controlling, controlled or commonly
controlled company by others;
f. Manipulation of security prices by effecting, alone or
with others, series of transactions in securities that
depresses their price to induce the sale of a security,
whether of the same or different class, of the same
issuer or of a controlling, controlled or commonly
controlled company by others;
g. Manipulation of security prices by effecting, alone or
with others, a series of transactions in securities that
creates active trading to induce such a purchase or
sale though manipulative devices such as marking the
close, painting the tape, squeezing the float, hype and
dump, boiler room operations and such other similar
devices;
h. Manipulation of security prices by circulating or
disseminating' information that the price of any
security listed in an Exchange will or is likely to rise or
fall because of manipulative market operations of
anyone or more persons conducted for the purpose of
raising or depressing the price of the security for the
purpose of inducing the purchase or sale of such
security;
i. Manipulation of security prices by making false or
misleading statements with respect to any material
fact; which he knew or had reasonable ground to
believe was so false and misleading, for the purpose of
inducing the purchase or sale of any security listed or
traded in an Exchange;
j. Manipulation of security prices by effecting, alone or
with others, any series of transactions for the purchase
and/or sale of any security traded in an Exchange for
the purpose of pegging, fixing or stabilizing the price
of such security, unless otherwise allowed by the
Securities Regulation Code or by the rules of the SEC;
k. Sale or purchase of any security using any
manipulative deceptive device or contrivance;
l. Execution of short sales or stop-loss order in
connection with the purchase or sale of any security
not in accordance with such rules and regulations as
the SEC may prescribe as necessary and appropriate
in the public interest or the protection of the investors;
m. Employment of any device, scheme or artifice to
defraud in connection with the purchase and sale of
any securities;
n. Obtaining money or property in connection with the
purchase and sale of any security by means of any
untrue statement of a material fact or any omission to
state a material fact necessary in order to make the
statements made, in the light of the circumstances
under which they were made, not misleading;
o. Engaging in any act, transaction, practice or course of
action in the sale and purchase of any security which
operates or would operate as a fraud or deceit upon
any person;
p. Insider trading;
q. Engaging in the business of buying and selling
securities in the Philippines as a broker or dealer, or
acting as a salesman, or an associated person of any
broker or dealer without any registration from the
Commission;
r. Employment by a broker or dealer of any salesman or
associated person or by an issuer of any salesman, not
registered with the SEC; ,
s. Effecting any transaction in any security, or reporting
such transaction, in an Exchange or using the facility
of an Exchange which is not registered with the SEC;
t. Making use of the facility of a clearing agency which is
not registered with the SEC;
u. Violations of margin requirements;
v. Violations on the restrictions on borrowings by
members, brokers and dealers;
w. Aiding and Abetting in any violations of the Securities
Regulation Code;
x. Hindering, obstructing or delaying the filing of any
document required under the Securities Regulation
Code or the rules and regulations of the SEC;
y. Violations of any of the provisions of the implementing
rules and regulations of the SEC;
z. Any other violations of any of the provisions of the
Securities Regulation Code.
14) Felonies or offenses of a - In determining whether or not a felony or offense
similar nature to the afore- punishable under the penal laws of other countries, is
mentioned unlawful activities "of a similar nature", as to constitute the same as an
that are punishable under the unlawful activity under the AMLA, the nomenclature of
penal laws of other countries. said felony or offense need not be identical to any of
the predicate crimes listed under Rule 3.i.

4. Institutions covered by AMLA


a. Banks
b. Offshore banking units
c. Quasi-banks
d. Trust entities
e. Non-stock savings and loan associations
f. Pawnshops,
g. All other institutions, including their subsidiaries and affiliates supervised and/or
regulated by the Bangko Sentral ng Pilipinas (BSP).

5. Obligations of covered institutions

b. Prevention of money laundering


- Section 1. Customer Identification Requirements.
Covered institutions shall 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.
For this purpose, they shall develop clear customer acceptance policies and
procedures when conducting business relations or specific transactions, such as, but
not limited to, opening of deposit accounts, accepting deposit substitutes, entering
into trust and other fiduciary transactions, renting of safety deposit boxes,
performing remittances and other large cash transactions.
- Sec. 2. Recordkeeping Requirements.
Covered transactions shall prepare and maintain documentation on their customer
accounts, relationships and transactions such that any account, relationship or
transaction can be so reconstructed as to enable the AMLC, the law enforcement and
prosecutorial authorities, and/or the courts to establish an audit trail for money
laundering.
- Sec. 3. Money Laundering Prevention Programs.
Covered institutions shall formulate their respective money laundering prevention
programs in accordance with Section 9 and other pertinent provisions of the AMLA
and Sections 1 and 2 of Rules 3 and 4 and other pertinent provisions of these Rules,
subject to such guidelines as may be prescribed by the Supervising Authority and
approved by the AMLC. Every covered institution shall submit its own money
laundering program to the Supervising Authority concerned within a non-extendible
period of sixty (60) days from the date of effectivity of these Rules.
- Sec. 4. Training of Personnel.
Covered institutions shall provide all their responsible officers and personnel with
efficient and effective training and continuing education programs to enable them to
fully comply with all their obligations under the AMLA and these Rules.

c. Customer identification requirements


A. True Identity of Individuals as Clients.
- Covered institutions shall establish and record the true identity of its clients
based on official documents. They shall 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.
Covered institutions shall 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.
B. Trustee, Nominee and Agent Accounts
- When dealing with customers who are acting as trustee, nominee, agent or in
any capacity for and on behalf of another, covered institutions shall verify and
record the true and full identity of the person(s) on whose behalf a transaction is
being conducted. Covered institutions shall also establish and record the true
and full identity of such trustees, nominees, agents and other persons and the
nature of their capacity and duties. In case a covered institution has doubts as to
whether such persons are being used as dummies in circumvention of existing
laws, it shall immediately make the necessary inquiries to verify the status of the
business relationship between the parties.
C. 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.
Examples of such documents are identity cards and passports. The following
minimum information/documents shall be obtained from individual customers:
(1) Name;
(2) Present address;
(3) Permanent address;
(4) Date and place of birth;
(5) Nationality;
(6) Nature of work and name of employer or nature of self-
employment/business;
(7) Contact numbers;
(8) Tax identification number, Social Security System number or
Government Service and Insurance System number;
(9) Specimen signature;
(10) Source of fund(s); and
(11) Names of beneficiaries in case of insurance contracts and
whenever applicable
D. 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 customers that are corporate or juridical entities, including shell
companies. and corporations:
(1) Articles of Incorporation/Partnership;
(2) By-laws;
(3) Official address or principal business address;
(4) List of directors/partners;
(5) List of principal stockholders owning at least two percent (2%) of the
capital stock;
(6) Contact numbers;
(7) Beneficial owners, if any; and
(8) Verification of the authority and identification of the person purporting
to act on behalf of the client.
E. Verification without Face-to-Face Contact.
- To the extent and through such means allowed under existing laws and
applicable rules and regulations of the BSP, the SEC and the IC, covered
institutions may create new accounts without face-to-face contact. However,
such new accounts shall not be valid and effective unless the customer complies
with the requirements under the two (2) immediately preceding subsections and
such other requirements that have been or will be imposed by the BSP, the SEC
and the IC, as the case may be, pursuant to Rule 5 of these Rules and/or their
respective charters, within ten (10) days from the creation of the new accounts.
Unless such requirements have been fully complied with, no transaction shall be
honored by any covered institution respecting an account created without face-
to-face contact.
F. Acquisition of Another Covered Institution.
- When a covered institution acquires the business of another covered institution,
either in whole or as a product portfolio, it is not necessary for the identity of all
existing customers to be re-established: Provided, That all customer account
records are acquired with the business and due diligence inquiries do not raise
any doubt as to whether or not the acquired business has fully complied with all
the requirements under the AMLA and these Rules.
G. Risk-monitoring and Review.
- Covered institutions shall adopt programs for on-going monitoring of high-risk
accounts and risk management, subject to such rules and regulations as may be
prescribed by the appropriate Supervising Authority. Regular reviews of
customer base should be undertaken to ensure that the nature of accounts and
potential risks are properly identified, monitored and controlled.
H. Numbered Accounts.
- Peso and foreign currency non-checking numbered accounts shall be allowed:
Provided, That the true identity of the customer is satisfactorily established
based on official and other reliable documents and records, and that the
information and documents required under Section 1 (b) and (c) of Rule 5 of
these Rules are obtained and recorded by the covered institution. The BSP may
conduct annual testing for the purpose of determining the existence and true
identity of the owners of such accounts.

6. What is prohibited under the law?


- Rule 15. Prohibitions Against Political Harassment
The AMLA and these Rules shall not be used for political persecution or harassment or
as an instrument to hamper competition in trade and commerce. No case for money
laundering may be filed to the prejudice of a candidate for an electoral office during an
election period.
- Provisional Remedies Application; Exception.
a. The AMLC may apply, in the course of the criminal proceedings, for provisional
remedies to prevent the monetary instrument or property subject thereof from being
removed, concealed, converted, commingled with other property or otherwise to
prevent its being found or taken by the applicant or otherwise placed or taken
beyond the jurisdiction of the court. However, no assets shall be attached to the
prejudice of a candidate for an electoral office during an election period.
b. Where there is conviction for money laundering under Section 4 of the AMLA, the
court shall issue a judgment of forfeiture in favor of the Government of the
Philippines with respect to the monetary instrument or property found to be
proceeds of one or more unlawful activities. However, no assets shall be forfeited
to the prejudice of a candidate for an electoral office during an election period.

7. How to prevent money laundering?


- Section 3. Money Laundering Prevention Programs.
 Covered institutions shall formulate their respective money laundering prevention
programs in accordance with Section 9 and other pertinent provisions of the AMLA
and Sections 1 and 2 of Rules 3 and 4 and other pertinent provisions of these Rules,
subject to such guidelines as may be prescribed by the Supervising Authority and
approved by the AMLC. Every covered institution shall submit its own money
laundering program to the Supervising Authority concerned within a non-extendible
period of sixty (60) days from the date of effectivity of these Rules.
 Every money laundering program shall establish detailed procedures implementing
a comprehensive, institution-wide "know-your-client" policy, set-up an effective
dissemination of information on money laundering activities and their prevention,
detection and reporting, adopt internal policies, procedures and controls, designate
compliance officers at management level, institute adequate screening and
recruitment procedures, and set-up an audit function to test the system.
 Covered institutions shall adopt, as part of their money laundering programs, a
system of flagging and monitoring transactions that qualify as covered transactions
except that they involve amounts below the threshold to facilitate the process of
aggregating them for purposes of future reporting of such transactions to the AMLC
when their aggregated amounts breach the threshold. Covered institutions not
subject to account secrecy laws shall incorporate in their money laundering
programs the provisions of Section 1, Rule 3 of these Rules and such other
guidelines for the voluntary reporting to the AMLC of all transactions that engender
the reasonable belief that a money laundering offense is about to be, is being, or has
been committed.

8. Requirements for customer identification

a. True Identity of individuals or clients (Know Your Client)


i. Customer Identification
- Covered institutions shall establish and record the true identity of its clients
based on official documents. They shall 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.
Covered institutions shall 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.

ii. Trustee, Nominee and Agent Accounts


- When dealing with customers who are acting as trustee, nominee, agent or in
any capacity for and on behalf of another, covered institutions shall verify and
record the true and full identity of the person(s) on whose behalf a transaction is
being conducted. Covered institutions shall also establish and record the true
and full identity of such trustees, nominees, agents and other persons and the
nature of their capacity and duties. In case a covered institution has doubts as to
whether such persons are being used as dummies in circumvention of existing
laws, it shall 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.
Examples of such documents are identity cards and passports. The following
minimum information/documents shall be obtained from individual customers:
(1) Name;
(2) Present address;
(3) Permanent address;
(4) Date and place of birth;
(5) Nationality;
(6) Nature of work and name of employer or nature of self-
employment/business;
(7) Contact numbers;
(8) Tax identification number, Social Security System number or
Government Service and Insurance System number;
(9) Specimen signature;
(10) Source of fund(s); and
(11) Names of beneficiaries in case of insurance contracts and
whenever 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 customers
that are corporate or juridical entities, including shell companies. and corporations:
(1) Articles of Incorporation/Partnership;
(2) By-laws;
(3) Official address or principal business address;
(4) List of directors/partners;
(5) List of principal stockholders owning at least two percent (2%) of the capital
stock;
(6) Contact numbers;
(7) Beneficial owners, if any; and
(8) Verification of the authority and identification of the person purporting to act
on behalf of the client.

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


- No new accounts shall be opened and created without face-to-face contact and full
compliance with the requirements under Rule 9.1.c of these Rules.
f. Numbered Accounts
- Peso and foreign currency non-checking numbered accounts shall be allowed:
Provided, That the true identity of the customers of all peso and foreign currency
non-checking numbered accounts are satisfactorily established based on official and
other reliable documents and records, and that the information and documents
required under the provisions of these Rules 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 herein
provided. The BSP may conduct annual testing for the purpose of determining the
existence and true identity of the owners of such accounts. The SEC and the IC may
conduct similar testing more often than once a year and covering such other related
purposes as may be allowed under their respective charters.

9. How long shall the records be kept?


- Record Keeping: Kinds of Records and Period for Retention
All records of all transactions of covered institutions shall be maintained and safely
stored for five (5) years from the dates of transactions. Said 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. Covered
institutions shall undertake the necessary adequate security measures to ensure the
confidentiality of such file. Covered institutions shall 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.

a. Existing and New Accounts and New Transactions


- All records of existing and new accounts and of new transactions shall be maintained
and safely stored for five (5) years from October 17,2001 or from the dates of the
accounts or transactions, whichever is later.

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

c. Retention of Records in case a Money Laundering Case has been filed


- If a money laundering case based on any record kept by the covered institution
concerned has been filed in court, said file must be retained beyond the period
stipulated in the three (3) immediately preceding sub-Rules as the case may be, until
it is confirmed that the case has been finally resolved or terminated by the court.

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.

10. Rule regarding reporting of covered and suspicious transactions (reportorial


requirements)
a. Period of Reporting Covered Transactions and Suspicious Transactions.
- Covered institutions shall report to the AMLC all covered transactions and
suspicious transactions within five (5) working days from occurrence thereof, unless
the supervising authority concerned prescribes a longer period not exceeding ten
(10) working days.
- Should a transaction be determined to be both a covered and a suspicious
transaction, the covered institution shall report the same as a suspicious transaction.
- The reporting of covered transactions by covered institutions shall be deferred for a
period of sixty (60) days after the effectivity of republic act no. 9194, or as may be
determined by the AMLC, in order to allow the covered institutions to configure their
respective computer systems; provided that, all covered transactions during said
deferment period shall be submitted thereafter.
b. Covered AND SUSPICIOUS Transaction Report Forms.
- The Covered Transaction Report (CTR) AND THE SUSPICIOUS TRANSACTION
REPORT (STR) shall be in the forms prescribed by the AMLC.
c. Covered institutions shall use the existing forms for covered transaction reports and
suspicious transaction reports, until such time as the AMLC has issued new sets of forms.
d. Covered transaction reports and suspicious transaction reports shall be submitted in a
secured manner to the AMLC in electronic form, either via diskettes, leased lines, or
through internet facilities, with the corresponding hard copy for suspicious transactions.
The final flow and procedures for such reporting shall be mapped out in the manual of
operations to be issued by the AMLC.
e. Exemption from Bank Secrecy Laws.
- When reporting covered OR SUSPICIOUS transactions to the AMLC, covered
institutions and their officers and employees, shall not be deemed to have violated
R.A. No. 1405, as amended, R.A. No. 6426, as amended, R.A. No. 8791 and other
similar laws, but are prohibited from communicating, directly or indirectly, in any
manner or by any means, to any person the fact that a covered or suspicious
transaction report was made, the contents thereof, or any other information in
relation thereto. In case of violation thereof, the concerned officer and employee of
the covered institution, shall be criminally liable.
f. Confidentiality Provisions.
- When reporting covered transactions or suspicious transactions to the AMLC,
covered institutions and their officers and employees, are prohibited from
communicating, directly or indirectly, in any manner or by any means, to any person,
entity, the media, the fact that a covered or suspicious transaction report was made,
the contents thereof, 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. In case of violation thereof, the concerned officer, and
employee, of the covered institution, or media shall be held criminally liable.
g. Safe Harbor Provisions.
- 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.

11. How is money-laundering crime committed?


- Rule 4. Section 1. Money laundering is a crime whereby the proceeds of an unlawful
activity AS HEREIN DEFINED are transacted; thereby making them appear to have
originated from legitimate sources. It is committed by the following:
a. Any person knowing that any monetary instrument or property represents, involves,
or relates to, the proceeds of any unlawful activity, transacts or attempts to transact
said monetary instrument or property.
b. Any person knowing that any monetary instrument or property involves the
proceeds of any unlawful activity, 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. Any person knowing that any monetary instrument or property is required under this
Act to be disclosed and filed with the Anti-Money Laundering Council (AMLC), fails
to do so

12. What are unlawful activities?


- Rule 4. Section 2. Unlawful Activities. These refer to any act or omission or series or
combination thereof involving or having relation to the following:
a. Kidnapping for ransom under Article of Act No. 3815, the Revised Penal Code, as
amended;
b. Robbery and extortion under Articles 294, 295, 296, 299, 300, 301 and 302 of the
same Code;
c. Qualified theft under Article 310 of the same Code;
d. Swindling under Article 315 of the same Code;
e. Piracy on the high seas under the same Code and Presidential Decree (P.D.) No.
532;
f. Destructive arson and murder as defined under the same Code and hijacking and
other violations under Republic Act (R. A.) No. 6235, including those perpetrated
by terrorists against non-combatant persons and similar targets;
g. Jueteng and Masiao punished as illegal gambling under P.D. No. 1602;
h. Smuggling under R. A. Nos. 455 and 1937;
i. Section 3, paragraphs B, C, E, G, H and I of R. A. No. 3019, the Anti-Graft and
Corrupt Practices Act, as amended;
j. Sections 3, 4, 5, 7, 8 and 9 of Article Two of R. A. No. 6425, the Dangerous Drugs
Act of 1972 as amended;
k. Plunder under R. A. No. 7080, as amended;
l. Violations under R. A. No. 8792, the Electronic Commerce ct of 2000;
m. Fraudulent practices and other violations under R. A. No. 8799, the Securities
Regulation Code of 2000; and
n. Felonies or offenses of a similar nature that are punishable under the penal laws of
other countries.

13. What are penalties and other consequences for violating AMLA?
Penalties for the Crime of Money Laundering

Violation Penalty Imposed on the person convicted


- The penalty of imprisonment ranging from seven (7) to
fourteen (14) years and a fine of not less than Three
Penalties under Section 4 Million Philippine Pesos (Php3,000,000.00) but not more
(a) of the AMLA. than twice the value of the monetary instrument or
property involved in the offense, shall be imposed upon a
person convicted under Section 4 (a) bf the AMLA.
Penalties under Section 4 - The penalty of imprisonment from four (4) to seven (7)
(b) of the AMLA. years and a fine of not less than One Million Five
Hundred Thousand Philippine Pesos (Php1,500,000.00)
but not more than Three Million Philippine Pesos
(Php3,000,000.00), shall be imposed upon a person
convicted under Section 4 (b) of the AMLA.
- The penalty of imprisonment from six (6) months to four
(4) years or a fine of not less than One Hundred Thousand
Penalties under Section 4 Philippine Pesos (Php100,000.00) but not more than Five
(c) of the AMLA Hundred Thousand Philippine Pesos (Php500,000.00), or
both, shall be imposed on a person convicted under
Section 4(c) of the AMLA.
Any covered institution, its - The fines shall be in amounts as may be determined by the
officers and employees, council, taking into consideration all the attendant
Or any person who circumstances, such as the nature and gravity of the
violates any of the violation or irregularity, but in no case shall such fines be
provisions of republic act less than one hundred thousand pesos (php100,000.00) but
no. 9160, as amended by not to exceed five hundred thousand pesos
republic act no. 9194 and (php500,000.00). The imposition of the administrative
rules, regulations, orders sanctions shall be without prejudice to the filing of
and resolutions issued criminal charges against the persons responsible for the
pursuant thereto violations
- The penalty of imprisonment from six (6) months to one
(1) year or a fine of not less than One Hundred Thousand
Penalties for Failure to Philippine Pesos (Php100,000.00) but not more than Five
Keep Records. Hundred Thousand Philippine Pesos (Php500,000.00), or
both, shall be imposed on a person convicted under
Section 9 (b) of the AMLA.
- Any person who, with malice, or in bad faith, reports or
files a completely unwarranted or false information
relative to any money laundering transaction against any
person, shall be subject to a penalty of imprisonment from
six (6) months to four (4) years and a fine of not less than
One hundred thousand Philippine pesos (Php100,000.00)
but not more than Five hundred thousand Philippine pesos
(Php500,000.00), at the discretion of the court: Provided,
That the offender is not entitled to avail of the benefits
under the Probation Law.
- If the offender is a corporation, association, partnership or
Malicious Reporting
any juridical person, the penalty shall be imposed upon the
responsible officers, as the case may be, who participated
or failed to prevent its commission. If the offender is a
juridical person, the court may suspend or revoke its
license. If the offender is an alien, he shall, in addition to
the penalties herein prescribed, be deported without
further proceedings after serving the penalties herein
prescribed. If the offender is a public official or employee,
he shall, in addition to the penalties prescribed herein,
suffer perpetual or temporary absolute disqualification
from office, as the case may be.
Where Offender is a - If the offender is a corporation, association, partnership or
Juridical Person. any juridical person, the penalty shall be imposed upon the
responsible officers, as the case may be, who participated
in, or ALLOWED BY THEIR GROSS NEGLIGENCE
the commission of the crime. If the offender is a juridical
person, the court may suspend or revoke its license. If the
offender is an alien, he shall, in addition to the penalties
herein prescribed, be deported without further proceedings
after serving the penalties herein prescribed. If the
offender is a public official or employee, he shall, in
addition to the penalties prescribed herein, suffer perpetual
or temporary absolute disqualification from office, as the
case may be
Refusal by a Public - Any public official or employee who is called upon to
Official or Employee to testify and refuses to do the same or purposely fails to
Testify testify shall suffer the same penalties prescribed herein
- The punishment of imprisonment ranging from three (3) to
eight (8) years and a fine of not less than Five Hundred
Thousand Philippine Pesos (Php500,000.00) but not more
than One Million Philippine Pesos (Php1,000,000.00),
shall be imposed on a person convicted for a violation
Breach of Confidentiality
under Section 9(c).
- In case of a breach of confidentiality that is published or
reported by media, the responsible reporter, writer,
president, publisher, manager and editor-in-chief shall be
liable under this act.

14. Consequences of malicious reporting


- Any person who, with malice, or in bad faith, reports or files a completely unwarranted
or false information relative to money laundering transaction against any person shall be
subject to a penalty of six (6) months to four (4) years imprisonment and a fine of not less
than One Hundred Thousand Philippine Pesos (Php100, 000.00) but not more than Five
Hundred Thousand Philippine Pesos (Php500, 000.00), at the discretion of the court:
Provided, That the offender is not entitled to avail the benefits of the Probation Law.

15. When is freezing of accounts ordered?


a. After an investigation conducted by the AMLC and upon determination that probable
cause exists that a monetary instrument or property is in any way related to any unlawful
activity as defined under Section 3 (i), The AMLC may file an ex-parte application before
the court of appeals for the issuance of a freeze order on any monetary instrument or
property subject thereof prior to the institution or in the course of, the criminal
proceedings involving the unlawful activity to which said MONETARY INSTRUMENT
OR PROPERTY is any way related.
b. Considering the intricate and diverse web of related and interlocking accounts
PERTAINING TO THE MONETARY INSTRUMENT(S) OR PROPERTY(IES) that any
person may create in the different covered institutions, their branches and/or other units,
the AMLC may apply to the court of appeals for the freezing, not only of the monetary
instruments or properties in the names of the reported owner(s)/holder(s), and monetary
instruments or properties named in the application of the AMLC but also all other
related web of accounts pertaining to other monetary instruments and properties, the
funds and sources of which originated from or are related to the monetary instrument(s)
or property(ies) subject of the freeze order(s).
c. The freeze order shall be effective for twenty (20) days unless extended by the court of
appeals upon application by the AMLC.

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.

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