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LAW- Banking Laws reviewer and notes

Bachelor of Science in Accountancy (Polytechnic University of the Philippines)

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BANK SECRECY LAW (RA 1405, AS AMENDED)

Purpose of the law: It hopes to discourage private hoarding and at the same time encourage the people to deposit their money in banking institutions,
so that it may be utilized by way of authorized loans and thereby assist in economic development.

Prohibited Act: It shall be unlawful for any official or employee of a bank to disclose to any person or for an independent auditor hired by a bank to
conduct its regular audit to disclose to any person other than a bank director, official or employee authorized by the bank, any information concerning
deposits.

Deposits covered:
1. Peso deposits: All deposits of whatever nature with banks or banking institutions in the Philippines including investments in bonds issued by the
Government of the Philippines, its political subdivisions and its instrumentalities, are considered absolutely confidential and may not be examined,
inquired or looked into by any person, government official, bureau or office, unless:
a. When there is a written permission of the depositor or investor
b. Impeachment cases
c. Upon the order of a competent court in cases of bribery or dereliction of duty of public officials
d. Upon the order of a competent court in cases where the money deposited or invested is the subject of litigation
e. Upon order of the competent court or tribunal in cases involving unexplained wealth under RA 3019, or the Anti-Graft and Corrupt Practices Act.
f. Upon inquiry by the Commissioner of BIR for the purpose of determining the net estate of a deceased depositor
g. Upon the order of a competent court or in proper cases by the AMLC where there is probable cause of money laundering and in some instances
even without court order
h. Disclosure to the Treasurer of the Philippines for dormant deposits for at least 10 years under the Unclaimed Balances Act (RA 3936)
i. Report of banks to AMLC of covered and/or suspicious transactions
j. Upon order of the CA, examination by law enforcement officers in terrorism cases under the Human Security Act of 2007 (RA 9372)
k. Examination is made in the course of a special or general examination of bank and is specifically authorized by the Monetary Board after being
satisfied that there is reasonable ground to believe that a bank fraud or serious irregularity has been or is being committed and that is necessary
to look into the deposit to establish such fraud or irregularity
l. Examination is made by an independent auditor hired by the bank to conduct its regular audit provided that the examination is for audit purposes
only and the results thereof shall be for the exclusive use of the bank
2. Foreign currency deposits (FOREIGN CURRENCY DEPOSIT ACT): foreign currency deposits in banks are likewise absolutely confidential and
cannot be disclosed, except:
a. When there is written consent of depositor under Section 8 of the Foreign Currency Deposits Act (RA 6426)
b. Under Section 11 of the Anti-Money Laundering Act (probable cause established that it is related to an unlawful activity as defined or money
laundering)
c. Under Section 27 and 28 of the Human Security Act (existence of probable cause in anti-terrorism cases and those involving persons charged
with or suspected of the crime of terrorism or conspiracy to commit terrorism, judicially declared and outlawed terrorist organization, association,
or group of persons, or member of such organization, association, or group of persons)

Garnishment: Bank accounts may be garnished by the creditors of the depositor. In garnishment, there is no violation of the bank secrecy law since the
amount of the deposit is not actually disclosed.

Deposits exempt from garnishment:

1. Foreign currency deposits, Section 8 of RA 6426
2. Those exempt under Rules of Court

Penalties for violation: imprisonment of not more than 5 years or a fine not more than P20,000.00 or both

Trust Accounts: are likewise covered by the bank secrecy law. (Ejercito vs. Sandiganbayan)

UNCLAIMED BALANCES LAW (ACT 3936, AS AMENDED BY PD 679)

Unclaimed Balances: include credits or deposits of money, bullion, security, or other evidence of indebtedness of any kind, and interest thereon with
banks, buildings and loan associations, and trust corporations, in favor of any person known to be dead or who has not made further deposits or
withdrawals during the preceding 10 years or more

It is obligatory of every bank to report, in a sworn statement, to the Treasurer of the Philippines (who will, in turn, inform the Solicitor General) of deposits
that have not been touched (no deposit or withdrawal made) for a period of 10 years or held in favor of persons known to be dead.

Information required in the Sworn Statement:

1. The names and last known place of residence or post office addresses of the persons in whose favor such unclaimed balances stand;
2. The amount and the date of the outstanding unclaimed balance and whether the same is in money or in security, and if the latter, the nature of the
same;
3. The date when the person in whose favor the unclaimed balance stands died, if known, or the date when he made his last deposit or withdrawal;
and
4. The interest due on such unclaimed balance, if any, and the amount thereof.

Posting Requirement: the above-mentioned sworn statement shall be posted in a conspicuous place in the premises of the bank, building and loan
association, or trust corporation concerned for at least sixty (60) days from the date of filing thereof.

Procedure:
1. A notice to the depositor will be given at his last known place of residence or post office address.
2. The bank will then report, through a sworn statement, to the Treasurer of the Philippines the existence of such deposits.
3. The Solicitor General will then initiate the proper escheat proceedings in court.

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4. A copy of the complaint and summons shall be served upon the president, cashier or managing officer of each defendant bank, building and loan
association or trust corporation and a publication of such summons a newspaper of general circulation.
5. After trial, and it is determined that such balances are unclaimed, the court shall render judgment declaring such blances escheated in favor of the
Government.
6. Such unclaimed balances, together with the increase and proceeds thereof, shall be deposited with the Treasurer of the Philippines to the credit of
the Government of the Republic of the Philippines to be used as Congress may direct.

PDIC ACT (RA 3591, AS AMENDED)

PHILIPPINE DEPOSIT INSURANCE CORPORATION (PDIC):

Primary Functions: to act as

1. Deposit Insurer – the PDIC shall promote and safeguard the interests of the depositing public by way of providing permanent and continuing insurance
coverage on all insured deposits.
2. Co-regulator of banks – as a bank regulator, the PDIC is empowered to examine and investigate banks.
3. Receiver and liquidator of closed banks – the PDIC as receiver shall control, manage and administer the affairs of the bank.

INSURED DEPOSITS: Amount due to any bona fide depositor for legitimate deposits in an insured bank net of any obligation of the depositor to the
insured bank as of the date of closure, but not to exceed P500,000.

Adjustment of maximum deposit insurance: the amount of coverage may be adjusted in such amount, for such a period, and/or for such deposit products,
provided:
1. The Monetary Board has determined that there is a condition that threatens the monetary and financial stability of the banking system that may have
systematic consequences as defined under RA No. 3591;
2. Approval by a unanimous vote of the Board of Directors of the PDIC in a meeting called for the purpose and chaired by the DOF Secretary;
3. Approval of the President of the Philippines.

Under Section 22 of the PDIC Charter, a systemic risk refers to the possibility of failure of one bank to settle net transactions with other banks will trigger
a chain reaction, depriving other banks of funds leading to a general shutdown of normal clearing and settlement activity. It also means the likelihood of
a sudden, unexpected collapse of confidence in a significant portion of the banking or financial system with potentially large real economic effects.

Coverage: The deposit liabilities of any bank or banking institution, which is engaged in the business of receiving deposits as herein defined on the effective
date of the PDIC Act, or which thereafter may engage in the business of receiving deposits, shall be insured with the PDIC.

Deposit accounts not entitled to payment:

1. Investment products such as bonds and securities, trust accounts and other similar instruments
2. Deposit accounts or transactions which are unfunded and that are fictitious or fraudulent
3. Deposit accounts or transactions constituting and/or emanating from, unsafe and unsound banking practice/s, as determined by PDIC, in consultation
with BSP, after due notice and hearing, and publication of a cease and desist order issued by PDIC against such deposit accounts or transactions
4. Deposits that are determined to be the proceeds of an unlawful activity as defined under RA 9160 or the Anti-Money Laundering Act, as amended
5. Deposits payable in a place outside the Philippines (like those in foreign branches)
6. Money placements by the head office of a foreign bank in its branch in the Philippines because there is only one entity.
7. Deposit products that resulted from splitting of deposit.

Splitting of Deposit – occurs whenever a deposit account with an outstanding balance more than P500,000 under the name of persons is broken
down and transferred to two or more accounts in the name of persons or entities who have no beneficial ownership in the transferred deposits in
their names within 120 days immediately preceding or during a bank-declared bank holiday or immediately preceding a closure order issued by the
Monetary Board for the purpose of availing the maximum deposit insurance coverage. This is considered a criminal act punishable by imprisonment
of not less than 6 years but not more than 12 years or a fine not less than P50,000 but not more than P10,000,000, or both, at the discretion of the
court.

Determination of the amount due

Per Depositor, Per Capacity Rule: all deposits in the bank maintained in the same right and capacity for his benefit either in his own name or in the name
of others shall be added together in determining the insured amount.

Accounts “By”, “In Trust For (ITF)” or “For the Account of (FAO)” another person:
1. In a “By” account (Juan by Pedro) – Juan is the depositor.
2. In an “ITF” account (Juan ITF Pedro) – Pedro is the depositor.
3. In a “FAO” account (Juan FAO Pedro) – Pedro is the depositor.

Joint accounts: A joint account regardless of whether the conjunction “and”, “or”, “and/or” is used shall be insured separately from any individually-owned
deposit account, provided that:
1. If the account is held jointly by two or more natural persons, or by two or more juridical persons or entities, the maximum insured deposit shall be
divided into as many equal shares as there are individuals, juridical persons or entities, unless a different sharing is stipulated in the document of
deposit, and
2. If the account is held by a juridical person or entity jointly with one or more natural persons, the maximum insured deposit shall be presumed to
belong entirely to such juridical person or entity;

Provided, further, that the aggregate of the interest of each co-owner over several joint accounts, whether owned by the same or different combinations
of individuals, juridical persons or entities, shall likewise be subject to the maximum insured deposit of P500,000.00.

Certificate of Deposit: No owner/holder of any negotiable certificate of deposit shall be recognized as a depositor entitled to the rights in PDIC Act unless
his name is registered as owner/holder thereof in the books of the issuing bank.

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Procedure for the PDIC:

1. PDIC shall commence the determination of insured deposits due the depositors of a closed bank upon its actual takeover of the closed bank.
2. PDIC shall give notice to the depositors of the closed bank of the insured deposits due them by whatever means deemed appropriate by the Board
of Directors.
3. PDIC shall publish the notice once a week for at least 3 consecutive weeks in a newspaper of general circulation or, when appropriate, in a newspaper
circulated in the community or communities where the closed bank or its branches are located.

Mode of payment: made as soon as possible either:

1. By cash
2. By making available to each depositor a transferred deposit in another insured bank in an amount equal to insured deposit of such depositor

Proof of claim: The PDIC, in its discretion, may require proof of claims to be filed before paying the insured deposits, and that in any case where the PDIC
is not satisfied as to the validity of a claim, it may require final determination of a court of competent jurisdiction before paying such claim.

Withholding of payment: The PDIC may withhold payment of such portion of the insured deposit for the payment of any liability of such depositor as a
stockholder of the closed bank, or of any liability of such depositor to the closed bank or its receiver, which is not offset against a claim due from such
bank, pending determination and payment of such liability by such depositor or any other liable therefor.

Effect of payment: PDIC shall be subrogated to all rights of the depositor against the closed bank to the extent of such payment. Such subrogation shall
include the right on the part of PDIC to receive the same dividends and payments from the proceeds of the assets of such closed bank and recoveries on
account of stockholders’ liability as would have been payable to the depositor on a claim for the insured deposits, but such depositor shall retain his claim
for any uninsured portion of his deposit.

Under Section 21 of the PDIC Charter, payment of an insured deposit to any person by PDIC shall discharge the PDIC, and payment of transferred deposit
to any person by the new bank or by an insured bank in which a transferred deposit has been made available shall discharge PDIC and such new bank or
other insured bank, to the same extent that payment to such person by the closed bank would have discharged it from liability for the insured deposit.

Preference: All payments by PDIC of insured deposits in closed banks partake of the nature of public funds, and as such, must be considered a preferred
credit similar to taxes due to the National Government in the order of preference under Article 2244(9) of NCC, provided further, that this preference shall
be likewise effective upon liquidation proceedings already commenced and pending as of the approval of PDIC Act, where no distribution of assets has
been made.

Failure to settle claim of insured depositor: Failure to settle the claim within 6 months from the date of filing of claim for insured deposit, where such
failure was due to grave abuse of discretion, gross negligence, bad faith or malice, shall upon conviction, subject the directors, officers or employees of
PDIC responsible for the delay, to imprisonment from 6 months to one year, provided, that the period shall not apply if the validity of the claim requires
the resolution of issues of facts and/or law by another office, body or agency.

Failure of depositor to claim insured deposits: Unless otherwise waived by the PDIC, if the depositor in the closed bank shall fail to claim his insured
deposits with PDIC within 2 years from actual takeover of the closed bank by the receiver, or does not enforce his claim filed with PDIC within 2 years
after the 2-year period to file a claim, all rights of the depositor against the PDIC with respect to the insured deposit shall be barred, however, all rights
of the depositor against the closed bank and its shareholders or the receivership estate to which PDIC may have become subrogated, shall thereupon
revert to the depositor. Thereafter, PDIC shall be discharged from any liability on the insured deposit.

ANTI-MONEY LAUNDERING ACT (RA 9160, AS AMENDED BY RA 9194)

MONEY LAUNDERING: a crime committed by any person knowing that any monetary instrument or property represents, involves or relates to, the
proceeds of any unlawful activity:
1. Transacts or attempts to transact said monetary instrument or property
2. Converts, transfers, disposes of, moves, acquires, possesses or uses said monetary instrument or property;
3. Conceals or disguises the true nature, source, location, disposition, movement or ownership of or rights with respect to said monetary instrument or
property
4. Attempts or conspires to commit money laundering offenses referred to above;
5. Aids, abets, assists in or counsels the commission of the money laundering offenses refereed to above (1 to 3)
6. Performs or fails to perform any act as a result of which he facilitates the offense of money laundering referred to above (1 to 3);
7. Those committed by failure to report to the Anti-Money Laundering Council (AMLC) by any covered person knowing that a covered or suspicious
transaction is required under the Anti-Money Laundering Law to be reported thereto.

COVERED TRANSACTION: a transaction in cash or other equivalent monetary instrument involving a total amount in excess of P500,000 within
one banking day.

For casinos, a single casino cash transaction in excess of five million pesos (P5,000,000) or its equivalent in any other currency. (as amended by RA No.
10927)

SUSPICIOUS TRANSACTION: a transaction with covered institutions, regardless of the amount involved, where any of the following circumstances
exist:
1. There is no underlying legal or trade obligation, purpose or economic justification
2. The client is not properly identified
3. The amount involved is not commensurate with the business or financial capacity of the client
4. Taking into account all known circumstances, it may be perceived that the client’s transaction is structured in order to avoid being the subject of
reporting requirements under the Act
5. Any circumstances 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

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6. The transaction is in any way related to an unlawful activity or offense under this Act that is about to be, is being or has been committed
7. Any transaction that is similar or analogous to any of the foregoing

UNLAWFUL ACTIVITIES: Any act or omission or series or combination thereof involving or having relation to the following:
1. Kidnapping for ransom under Article 267 of RPC
2. Sections 4, 5, 7, 8, 9, 10, 12, 13, 14, 15 and 16 of Comprehensive Dangerous Drugs Act (RA 9165)
a. Importation of prohibited drugs
b. Sale of prohibited drugs
c. Administration of prohibited drugs
d. Distribution of prohibited drugs
e. Transportation of prohibited drugs
f. Maintenance of a den, dive, or resort for prohibited users
g. Manufacture of prohibited drugs
h. Possession of prohibited drugs
i. Use of prohibited drugs
j. Cultivation of plants which are sources of prohibited drugs
k. Culture of plants which are sources of prohibited drugs
3. Section 3, paragraphs B, C E, G, H and I of RA 3019
a. Directly or indirectly requesting or receiving any gift, present, share, percentage, or benefit for himself or for any other person in connection
with contract or 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
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, group
4. Plunder under RA 7080
5. Robbery and extortion under Articles 294, 295, 296, 299, 300, 301 and 302 of RPC
a. Robbery with violence or intimidation of persons
b. Robbery with physical injuries, committed in an uninhabited place and by a band, or with use of firearms on a street, road, or alley
c. Robbery in an uninhabited house or public building or edifice devoted to worship
6. Jueteng and masiao under PD 1602
7. Piracy on the high seas under RPC and PD 532
a. Piracy on the high seas
b. Piracy in inland Philippine waters
c. Aiding and abetting pirates and brigands
8. Qualified theft under Article 310 of RPC
9. Swindling under Article 315 of RPC
10. Smuggling under RA 455 and RA 1937
11. Violations of Electronic Commerce Act (RA 8792)
12. Hijacking and other violations under RA 6235
13. Destructive arson and murder as defined under RPC
14. Terrorism and conspiracy to commit terrorism as defined and penalized under Sections 3 and 4 of Republic Act No. 9372
15. Financing of terrorism under Section 4 and offenses punishable under Sections 5, 6, 7 and 8 of Republic Act No. 10168, otherwise known as the
Terrorism Financing Prevention and Suppression Act of 2012
16. Bribery under Articles 210, 211 and 211-A of the Revised Penal Code, as amended, and Corruption of Public Officers under Article 212 of the
Revised Penal Code, as amended
17. Frauds and Illegal Exactions and Transactions under Articles 213, 214, 215 and 216 of the Revised Penal Code, as amended
18. Malversation of Public Funds and Property under Articles 217 and 222 of the Revised Penal Code, as amended
19. Forgeries and Counterfeiting under Articles 163, 166, 167, 168, 169 and 176 of the Revised Penal Code, as amended
20. Violations of Sections 4 to 6 of Republic Act No. 9208, otherwise known as the Anti-Trafficking in Persons Act of 2003
21. Violations of Sections 78 to 79 of Chapter IV, of Presidential Decree No. 705, otherwise known as the Revised Forestry Code of the Philippines, as
amended
22. Violations of Sections 86 to 106 of Chapter VI, of Republic Act No. 8550, otherwise known as the Philippine Fisheries Code of 1998
23. Violations of Sections 101 to 107, and 110 of Republic Act No. 7942, otherwise known as the Philippine Mining Act of 1995
24. Violations of Section 27(c), (e), (f), (g) and (i), of Republic Act No. 9147, otherwise known as the Wildlife Resources Conservation and Protection
Act
25. Violation of Section 7(b) of Republic Act No. 9072, otherwise known as the National Caves and Cave Resources Management Protection Act
26. Violation of Republic Act No. 6539, otherwise known as the Anti-Carnapping Act of 2002, as amended
27. Violations of Sections 1, 3 and 5 of Presidential Decree No. 1866, as amended, otherwise known as the decree Codifying the Laws on
Illegal/Unlawful Possession, Manufacture, Dealing In, Acquisition or Disposition of Firearms, Ammunition or Explosives
28. Violation of Presidential Decree No. 1612, otherwise known as the Anti-Fencing Law
29. Violation of Section 6 of Republic Act No. 8042, otherwise known as the Migrant Workers and Overseas Filipinos Act of 1995, as amended by
Republic Act No. 10022
30. Violation of Republic Act No. 8293, otherwise known as the Intellectual Property Code of the Philippines
31. Violation of Section 4 of Republic Act No. 9995, otherwise known as the Anti-Photo and Video Voyeurism Act of 2009
32. Violation of Section 4 of Republic Act No. 9775, otherwise known as the Anti-Child Pornography Act of 2009

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33. Violations of Sections 5, 7, 8, 9, 10(c), (d) and (e), 11, 12 and 14 of Republic Act No. 7610, otherwise known as the Special Protection of Children
Against Abuse, Exploitation and Discrimination
34. Fraudulent practices and other violations under Republic Act No. 8799, otherwise known as the Securities Regulation Code of 2000; and
35. Felonies or offenses of a similar nature that are punishable under the penal laws of other countries. (as amended by RA No. 10365)

COVERED ENTITIES:
1. Banks, offshore banking units, quasi-banks, trust entities, non-stock savings and loan associations, pawnshops, and all other institutions and their
subsidiaries and affiliates supervised and/or regulated by the BSP
2. Insurance companies, insurance agents, insurance brokers, professional reinsurers, reinsurance brokers, holding companies, holding company
systems, and all other persons and entities supervised and/or regulation by the Insurance Commission
3. 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
4. Jewelry dealers in precious metals/stones, who as, a business, trade in precious metals/stones, for transactions in excess of P1M
5. Mutual funds or open-end investment companies or issuers and other similar entities
6. Foreign exchange corporations, money changers, money payment, remittance, and transfer companies and other similar entities
7. 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 SEC
8. Casinos, including internet and ship-based casinos with respect to their casino cash transactions related to their gaming operations. (as amended by
RA No. 10927)

Lawyers and accountants: acting as independent legal professionals are NOT covered with respect to privileged information covered by confidentiality and
attorney-client relationship.

Obligations of covered institutions:

1. Customer identification: Covered institutions shall establish and record the true identity of its clients based on official documents.
2. Record keeping: All records of all transactions of covered institutions shall be maintained and safely stored for 5 years from the date of transactions.
3. Should a transaction be determined to be both a covered and a suspicious transaction, it shall be reported as a suspicious transaction.
4. When reporting, it shall not be considered a violation of bank secrecy laws and similar laws. It shall be 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 content thereof, or
any other information in relation thereto.
5. Safe Harbor: No administrative, criminal, or civil proceedings, shall lie against any person for having made a transaction report in the regular
performance of his duties and in good faith, whether or not such results in any criminal prosecution under Philippine laws.

REPORTORIAL REQUIREMENTS: covered institutions shall report to the AMLC all covered or suspicious transactions within 5 working days from
occurrence thereof, unless the AMLC prescribes a longer period not exceeding 15 working days. Conviction of the unlawful activity is not necessary
before a report is made.

ANTI-MONEY LAUNDERING COUNCIL: composed of:

1. Chairman: BSP Governor
2. Members:
a. Commissioner of Insurance Commission
b. Chairman of SEC

Functions of AMLC:
1. To require and receive covered transaction reports from covered institutions
2. To issue orders addressed to the appropriate Supervising Authority or the covered institution to determine the true identity of any monetary
instrument or property subject of a covered transaction report or request for assistance from a foreign State, or believed by the Council, on the basis
of substantial evidence to be in whole or in part, whenever located, representing, involving or related to, directly or indirectly, in any manner or by
any means, the proceeds of an unlawful activity
3. To institute civil forfeiture proceedings and all other remedial proceedings through the OSG
4. To cause the filing of complaints with the DOJ or Ombudsman for the prosecution of money laundering offenses
5. To initiate investigations of covered transactions, money laundering activities and other violations of RA 9160
6. To freeze any monetary instrument or property alleged to be proceeds of any unlawful activity
7. To implement such measures as may be necessary and justified under RA 9160 to counteract money laundering
8. To receive and take action in respect of, any request from foreign states for assistance in their own anti-money laundering operations provided in
RA 9160
9. To develop educational programs on the pernicious effects of money laundering, the methods and techniques used in money laundering, the viable
means of preventing money laundering and the effective ways of prosecuting and punishing offenders
10. To enlist the assistance of any branch, department, bureau, office, agency or instrumentality of the government, including GOCCs, in undertaking
any and all anti-money laundering operations, which may include the use of its personnel, facilities and resources for the more resolute prevention,
detection and investigation of money laundering offenses and prosecution of offenders.
11. To impose administrative sanctions for the violation of laws, rules, regulations, orders, and resolutions issued pursuant to law

Freezing of Monetary Instrument or Property: The Court of Appeals, upon application ex parte by AMLC and after determination that probable cause
exists that any monetary instrument or property is in any way related to an unlawful activity, may issue a freeze order which shall be effective immediately
(for a period of 20 days unless extended by the court upon application by the AMLC).

Considering the intricate and diverse web of related and interlocking accounts pertaining to the monetary instruments or properties that any person may
create in the different covered institutions, their branches and/or other units, AMLC may apply to freeze monetary instruments or properties in the names
of the reported owners/holders, and monetary instruments or properties named in the application of the AMLC, including 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 instruments or
properties subject of the freeze orders.

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Related Web of Accounts are those accounts, the funds and sources of which originated from and/or are materially linked to the monetary instruments or
properties subject of the freeze orders.

Authority to inquire into bank deposits: The AMLC may inquire into deposits upon order of the court when there is probable cause that the deposits
are related to the crime or unlawful activities.

However, a court order is not necessary when the offense or unlawful activity involved is any of the following:
1. Kidnapping for ransom
2. Sections 4, 5, 7, 8, 9, 10, 12, 13, 14, 15 and 16 of Comprehensive Dangerous Drugs Act (RA 9165)
3. Hijacking and other violations under RA 6235, destructive arson and murder, including those perpetrated by terrorists against non-combatant persons
and similar targets
4. Terrorism and conspiracy to commit terrorism as defined under the Human Security Act.

Inquiry into deposits may be availed of even in the absence of a pre-existing criminal case under the same law. However, the order authorizing bank
inquiry cannot be issued ex parte.

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