2016 REVISED IMPLEMENTING RULES AND REGULATIONS OF REPUBLIC ACT NO. 9160, AS AMENDED (2)
2016 REVISED IMPLEMENTING RULES AND REGULATIONS
OF REPUBLIC ACT NO. 9160, AS AMENDED
Pursuant to Sections 7(7) and 18 of Republic Act No. 9160, also known as the “Anti-Money Laundering Act of 2001, As Amended”, this Revised Implementing Rules and Regulations (RIRR) is hereby promulgated:
Rule 1.Title. - This RIRR shall be known as the “2016 Revised Implementing Rules and Regulations of Republic Act No. 9160, as Amended”.
DECLARATION OF POLICY
Rule 2. Declaration of Policy. - 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 Philippines shall extend cooperation in transnational investigations and prosecutions of persons involved in money laundering activities wherever committed.
DEFINITION OF TERMS
Rule 3. Definition of Terms. - For purposes of this RIRR, the following terms are hereby defined as follows:
A. “Anti-Money Laundering Act” (AMLA) refers to Republic Act No. 9160, as amended by Republic Act Nos. 9194, 10167 and 10365.
B. “Anti-Money Laundering Council” (AMLC) refers to the financial intelligence unit of the Republic of the Philippines which is the government agency tasked to implement the AMLA.
C. “Supervising Authority” refers to the Bangko Sentral ng Pilipinas (BSP), the Securities and Exchange Commission (SEC), the Insurance Commission (IC), or the relevant regulatory bodies of the Designated Non-Financial Businesses and Professions enumerated under Rule 3.E.4, or other government agencies designated by Law.
D. “Person” refers to any natural or juridical person.
E. “Covered Persons” refers to the following:
1. Persons supervised or regulated by BSP, such as:
d. Trust entities;
f. Non-stock savings and loan associations;
g. Electronic money issuers; and
h. All other persons and their subsidiaries and affiliates supervised or regulated by the BSP.
For purposes of this RIRR, foreign exchange dealers, money changers, and remittance and transfer companies are covered persons under the supervision of the BSP.
2. Persons supervised or regulated by IC, such as:
a. Insurance companies;
b. Pre-need companies;
c. Insurance agents;
d. Insurance brokers;
e. Professional reinsurers;
f. Reinsurance brokers;
g. Holding companies;
h. Holding company systems;
i. Mutual benefit associations; and
j. All other persons and their subsidiaries and affiliates supervised or regulated by the IC.
3. Persons supervised or regulated by SEC, such as:
a. Securities dealers, brokers, salesmen, investment houses, and other similar persons managing securities or rendering services, such as investment agents, advisors, or consultants.
b. mutual funds or open-end investment companies, close-end investment companies or issuers, and other similar entities;
c. other entities, administering or otherwise dealing in commodities, or financial derivatives based thereon, valuable objects, cash substitutes, and other similar monetary instruments or properties, supervised or regulated by the SEC.
4. The following Designated Non-Financial Businesses and Professions (DNFBPs):
a. Jewelry dealers, dealers in precious metals, and dealers in precious stones.
“Dealer” refers to an individual or entity who buys and/or sells precious metals, precious stones, and/or jewelry in the course of its business activities. The purchases or sales of precious metals, precious stones, and/or jewelry, as referred to herein, exclude those carried out for, connected with, or for the purpose of extracting precious metals or precious stones from a mine, or cutting or polishing precious stones.
“Jewelry” refers to finished goods deriving fifty percent (50%) or more of their value from jewels, precious metals or precious stones constituting, forming part of, or attached to said finished goods.
“Jewel” refers to organic substances that have a market-recognized gem level of quality, beauty and rarity, such as pearl, amber and coral.
“Precious metals” refers to gold, silver, platinum, palladium, rhodium, ruthenium, iridium, and osmium at a level of purity of five hundred (500) parts per one thousand (1,000), singly or in any combination, and alloys of precious metals, solders, and plating chemicals, such as rhodium and palladium plating solutions, potassium gold cyanide containing at least sixty-eight and three-tenths percent (68.3%) gold, potassium silver cyanide containing at least sixty-eight percent (68%) silver and silver cyanide in salt solution containing at least fifty-four percent (54%) silver.
“Precious stones” refers to all gems and stones used in jewelry making, such as gemstones, jewels, and those substances that have market-recognized gem level of quality, beauty, and rarity, such as diamond, corundum (including rubies and sapphires), beryl (including emeralds and aquamarines), chrysoberyl, spinel, topaz, zircon, tourmaline, garnet, crystalline and cryptocrystalline quartz, olivine peridot, tanzanite, jadeite jade, nephrite jade, spodumene, feldspar, turquoise, lapis lazuli, opal and pearl.
b. Company service providers which, as a business, provide any of the following services to third parties:
i. acting as a formation agent of juridical persons;
ii. acting as (or arranging for another person to act as) a director or corporate secretary of a company, a partner of a partnership, or a similar position in relation to other juridical persons;
iii. providing a registered office; business address or accommodation, correspondence or administrative address for a company, a partnership or any other legal person or arrangement; and
iv. acting as (or arranging for another person to act as) a nominee shareholder for another person.
c. Persons, including lawyers and accountants, who provide any of the following services:
i. Managing of client money, securities or other assets;
ii. Management of bank, savings, securities or other assets;
iii. Organization of contributions for the creation, operation or management of companies; and
iv. Creation, operation or management of juridical persons or arrangements, and buying and selling business entities.
Notwithstanding the foregoing, lawyers and accountants who are: (1) authorized to practice their profession in the Philippines; and (2) engaged as independent legal or accounting professionals, in relation to information concerning their clients, or where disclosure of information would compromise client confidences or the attorney-client relationship, are not covered persons.
“Independent legal or accounting professional” are lawyers and accountants working in a private firm or as a sole practitioner who by way of business provides purely legal, notarial or accounting services to their clients.
F. “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 person.
G. “Covered transaction” refers to:
1. A transaction in cash or other equivalent monetary instrument exceeding Five Hundred Thousand pesos (Php500,000.00)
2. A transaction exceeding One Million pesos (Php1,000,000.00) in cases of jewelry dealers, dealers in precious metals and dealers in precious stones.
H. “Suspicious Transaction” refers to a transaction, regardless of amount, where any of the following circumstances exists:
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 AMLA;
5. any circumstance relating to the transaction which is observed to deviate from the profile of the client and/or the client’s past transactions with the covered person;
6. the transaction is in any way related to an unlawful activity or any money laundering activity or offense that is about to be committed, is being or has been committed; or
7. any transaction that is similar, analogous or identical to any of the foregoing.
I. “Client/Customer” refers to any person who keeps an account, or otherwise transacts business with a covered person. It includes the following:
1. any person or entity on whose behalf an account is maintained or a transaction is conducted, as well as the beneficiary of said transactions;
2. beneficiary of a trust, an investment fund or a pension fund;
3. a company or person whose assets are managed by an asset manager;
4. a grantor of a trust; and
5. any insurance policy holder, whether actual or prospective.
J. “Politically Exposed Person” (PEP) refers to an individual who is or has been entrusted with prominent public position in (a) the Philippines with substantial authority over policy, operations or the use or allocation of government-owned resources; (b) a foreign State; or (c) an international organization.
The term PEP shall include immediate family members, and close relationships and associates that are reputedly known to have:
1. Joint beneficial ownership of a legal entity or legal arrangement with the main/principal PEP; or
2. Sole beneficial ownership of a legal entity or legal arrangement that is known to exist for the benefit of the main/principal PEP.
K. “Immediate Family Member” refers to spouse or partner; children and their spouses; and parents and parents-in-law.
L. “Beneficial Owner” refers to any natural person who:
1. Ultimately owns or controls the customer and/or on whose behalf a transaction or activity is being conducted; or
2. Has ultimate effective control over a legal person or arrangement.
M. “Official Document” refers to any of the following identification documents:
1. For Filipino citizens: Those issued by any of the following official authorities:
a. Government of the Republic of the Philippines, including its political subdivisions, agencies, and instrumentalities;
b. Government-Owned or -Controlled Corporations (GOCCs);
c. Covered persons registered with and supervised or regulated by the BSP, SEC or IC;
2. For foreign nationals: Passport or Alien Certificate of Registration;
3. For Filipino students: School ID signed by the school principal or head of the educational institution; and
4. For low risk customers: Any document or information reduced in writing which the covered person deems sufficient to establish the client’s identity.
N. “Monetary Instrument” shall include, but is not limited to the following:
1. Coins or currency of legal tender of the Philippines, or of any other country;
2. Credit instruments, including bank deposits, financial interest, royalties, commissions, and other intangible property;
3. Drafts, checks, and notes;
4. Stocks or shares, participation or interest in a corporation or in a commercial enterprise or profit-making venture and evidenced by a certificate, contract, instrument, whether written or electronic in character, including those enumerated in Section 3 of the Securities Regulation Code;
5. A participation or interest in any non-stock, non-profit corporation;
6. 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;
7. Contracts or policies of insurance, life or non-life, contracts of suretyship, pre-need plans, and member certificates issued by mutual benefit association; and
8. Other similar instruments where title thereto passes to another by endorsement, assignment, or delivery.
O. “Property” refers to 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, including:
1. Personal property, including proceeds derived therefrom, or traceable to any unlawful activity, such as, but not limited to:
b. Jewelry, precious metals and stones, and other similar items;
c. Works of art, such as paintings, sculptures, antiques, treasures, and other similar precious objects;
d. Perishable goods; and
e. Vehicles, vessels, aircraft, or any other similar conveyance.
2. Personal property, used as instrumentalities in the commission of any unlawful activity, such as:
a. Computers, servers, and other electronic information and communication systems; and
b. Any conveyance, including any vehicle, vessel, and aircraft.
3. Real estate, improvements constructed or crops growing thereon, or any interest therein, standing upon the record of the registry of deeds in the name of the party against whom the freeze order or asset preservation order is issued, or not appearing at all upon such records, or belonging to the party against whom the asset preservation order is issued and held by any other person, or standing on the records of the registry of deeds in the name of any other person, which are:
a. derived from, or traceable to, any unlawful activity; or
b. used as an instrumentality in the commission of any unlawful activity.
P. “Proceeds” refers to an amount derived or realized from any unlawful activity.
Q. “Monetary Instrument or Property Related to an Unlawful Activity” refers to:
1. All proceeds of an unlawful activity;
2. All monetary, financial or economic means, devices, accounts, documents, papers, items, or things used in or having any relation to any unlawful activity;
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; and
4. For purposes of freeze order and bank inquiry: related and materially-linked accounts.
R. “Related Accounts” refers to 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 order or an order of inquiry.
“Materially-linked Accounts” shall include the following:
1. All accounts or monetary instruments under the name of the person whose accounts, monetary instruments, or properties are the subject of the freeze order or an order of inquiry;
2. All accounts or monetary instruments held, owned, or controlled by the owner or holder of the accounts, monetary instruments, or properties subject of the freeze order or order of inquiry, whether such accounts are held, owned or controlled singly or jointly with another person;
3. All “In Trust For” accounts where either the trustee or the trustor pertains to a person whose accounts, monetary instruments, or properties are the subject of the freeze order or order of inquiry;
4. All accounts held for the benefit or in the interest of the person whose accounts, monetary instruments, or properties are the subject of the freeze order or order of inquiry; and
5. All other accounts, shares, units, or monetary instruments that are similar, analogous, or identical to any of the foregoing.
S. “Offender” refers to any person who commits a money laundering offense.
T. “Unlawful Activity” refers to any act or omission, or series or combination thereof, involving or having direct relation, to the following:
1. “Kidnapping for Ransom” under Article 267 of Act No. 3815, otherwise known as the Revised Penal Code, as amended;
2. Sections 4, 5, 6, 8, 9, 10, 11, 12,13, 14, 15 and 16 of Republic Act No. 9165, otherwise known as the “Comprehensive Dangerous Drugs Act of 2002”;
3. Section 3 paragraphs b, c, e, g, h and i of Republic Act No. 3019, as amended, otherwise known as the “Anti-Graft and Corrupt Practices Act”;
4. “Plunder” under Republic Act No. 7080, as amended;
5. “Robbery” and “Extortion” under Articles 294, 295, 296, 299, 300, 301 and 302 of the Revised Penal Code, as amended;
6. “Jueteng” and “Masiao” punished as illegal gambling under Presidential Decree No. 1602;
7. “Piracy on the High Seas” under the Revised Penal Code, as amended, and Presidential Decree No. 532:
8. “Qualified Theft” under Article 310 of the Revised Penal Code, as amended;
9. “Swindling” under Article 315 and “Other Forms of Swindling” under Article 316 of the Revised Penal Code, as amended:
10. “Smuggling” under Republic Act No. 455, and Republic Act No. 1937, as amended, otherwise known as the “Tariff and Customs Code of the Philippines”;
11. Violations under Republic Act No. 8792, otherwise known as the “Electronic Commerce Act of 2000”;
12. “Hijacking” and other violations under Republic Act No. 6235, otherwise known as the “Anti-Hijacking Law”; “Destructive Arson”; and “Murder”, as defined under the Revised Penal Code, as amended;
13. “Terrorism” and “Conspiracy to Commit Terrorism” as defined and penalized under Sections 3 and 4 of Republic Act No. 9372;
14. “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”;
15. “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;
16. “Frauds and Illegal Exactions and Transactions” under Articles 213, 214, 215 and 216 of the Revised Penal Code, as amended;
17. “Malversation of Public Funds and Property” under Articles 217 and 222 of the Revised Penal Code, as amended;
18. “Forgeries” and “Counterfeiting” under Articles 163, 166, 167, 168, 169 and 176 of the Revised Penal Code, as amended;
19. Violations of Sections 4 to 6 of Republic Act No. 9208, otherwise known as the “Anti-Trafficking in Persons Act of 2003, as amended”;
20. 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”;
21. Violations of Sections 86 to 106 of Chapter IV of Republic Act No. 8550, otherwise known as the “Philippine Fisheries Code of 1998”;
22. Violations of Sections 101 to 107, and 110 of Republic Act No. 7942, otherwise known as the “Philippine Mining Act of 1995”;
23. 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”;
24. Violations of Section 7(b) of Republic Act No. 9072, otherwise known as the “National Caves and Cave Resources Management Protection Act”;
25. Violation of Republic Act No. 6539, otherwise known as the “Anti-Carnapping Act of 2002, as amended”;
26. Violation 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”;
27. Violation of Presidential Decree No. 1612, otherwise known as the “Anti-Fencing Law”;
28. Violation of Section 6 of Republic Act No. 8042, otherwise known as the “Migrant Workers and Overseas Filipinos Act of 1995, as amended”;
29. Violation of Republic Act No. 8293, otherwise known as the “Intellectual Property Code of the Philippines, as amended”;
30. Violation of Section 4 of Republic Act No. 9995, otherwise known as the “Anti-Photo and Video Voyeurism Act of 2009”;
31. Violation of Section 4 of Republic Act No. 9775, otherwise known as the “Anti-Child Pornography Act of 2009”;
32. 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”;
33. Fraudulent practices and other violations under Republic Act No. 8799, otherwise known as the “Securities Regulation Code of 2000”;
34. Felonies or offenses of a nature similar to the aforementioned unlawful activities that are punishable under the penal laws of other countries.
In determining whether or not a felony or offense punishable under the penal laws of other countries is “of a similar nature”, as to constitute an unlawful activity under the AMLA, the nomenclature of said felony or offense need not be identical to any of the unlawful activities listed above.
U. “Probable Cause” refers to such facts and circumstances which would lead a reasonably discreet, prudent, or cautious man to believe that any monetary instrument or property sought to be frozen, inquired into or preserved is in any way related to any unlawful activity and/or money laundering offense.
Rule 4. Money Laundering. - Money laundering is committed by:
A. Any person who, knowing that any monetary instrument or property represents, involves, or relates to the proceeds of any unlawful activity:
1. transacts 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 in (1), (2), or (3) above;
5. aids, abets, assists in, or counsels the commission of the money laundering offenses referred to in (1), (2), or (3) above; and
6. performs or fails to perform any act as a result of which he facilitates the offense of money laundering referred to in (1), (2), or (3) above.
B. Any covered person who, knowing that a covered or suspicious transaction is required under the AMLA to be reported to the AMLC, fails to do so.
JURISDICTION OVER MONEY LAUNDERING CASES
Rule 5. Jurisdiction over Money Laundering Cases. -
A. Regional Trial Court. - The regional trial courts shall have jurisdiction to try money laundering cases committed by private individuals, and public officers not covered by the jurisdiction of the Sandiganbayan.
B. Sandiganbayan. - The Sandiganbayan shall have jurisdiction to try money laundering cases committed by public officers under its jurisdiction, and private persons who are in conspiracy with such public officers.
PROSECUTION OF MONEY LAUNDERING CASES
Rule 6. Prosecution of Money Laundering Cases. -
A. Independent Proceedings. - The prosecutions of money laundering and the unlawful activity shall proceed independently. Any person may be charged with and convicted of both money laundering and the unlawful activity.
B. Separate and Distinct Elements. - The elements of money laundering are separate and distinct from the elements of the unlawful activity. The elements of the unlawful activity, including the identity of the perpetrators and the details of the commission of the unlawful activity, need not be established by proof beyond reasonable doubt in the case for money laundering.
C. Knowledge. - The element of knowledge may be established by direct or circumstantial evidence.
D. Rules of Procedure. - The Rules of Court shall govern all proceedings concerning the prosecution of money laundering.
RULE VII. ANTI-MONEY LAUNDERING COUNCIL
Rule 7. The Anti-Money Laundering Council. - The AMLC is composed of the Governor of the BSP as Chairperson, and the Commissioner of the IC and the Chairperson of the SEC, as Members.
A. Unanimous Decision. - The AMLC shall act unanimously in the discharge of its functions. In case of incapacity, absence, or disability of any member, the officer duly designated or authorized to discharge the functions of the Governor of the BSP, the Commissioner of the IC, and the Chairperson of the SEC, as the case may be, shall act in his stead in the AMLC.
B. Functions. - The functions of the AMLC are:
1. to require and receive covered or suspicious transaction reports from covered persons;
2. to issue orders addressed to the appropriate Supervising Authority or the covered person to determine the true identity of the owner of any monetary instrument or property subject of a covered or suspicious transaction report, or request for assistance from a foreign State, or believed by the AMLC, on the basis of substantial evidence, to be, in whole or in part, wherever located, representing, involving, or related to, directly or indirectly, in any manner or by any means, the proceeds of any unlawful activity;
3. to institute civil forfeiture proceedings and all other remedial proceedings through the Office of the Solicitor General;
4. to file complaints with the Department of Justice or the Office of the Ombudsman for the prosecution of money laundering offenses and other violations under the AMLA;
5. to investigate suspicious transactions and covered transactions deemed suspicious after investigation by the AMLC, money laundering activities and other violations of the AMLA;
6. to file with the Court of Appeals, ex parte, through the Office of the Solicitor General:
a. a petition for the freezing of any monetary instrument or property that is in any way related to an unlawful activity; or
b. an application for authority to inquire into or examine any particular deposit or investment, including related accounts, with any banking institution or non-bank financial institution.
7. to formulate and implement such measures as may be necessary and justified under the AMLA 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 as provided in the AMLA.
9. to develop educational programs, including awareness campaign on the pernicious effects, the methods and techniques used, and 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 government-owned and -controlled corporations, 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 thereto.
12. to require the Land Registration Authority and all its Registries of Deeds to submit to the AMLC, reports on all real estate transactions involving an amount in excess of Five Hundred Thousand Pesos (Php500,000.00) within fifteen (15) days from the date of registration of the transaction, in a form to be prescribed by the AMLC. The AMLC may also require the Land Registration Authority and all its Registries of Deeds to submit copies of relevant documents of all real estate transactions.
Rule 8. The AMLC Secretariat. - The AMLC shall be assisted by the AMLC Secretariat in the discharge of its functions.
A. Executive Director. - The AMLC Secretariat shall be headed by an Executive Director who shall be appointed by the AMLC for a term of five (5) years. He must be a member of the Philippine Bar, at least thirty-five (35) years of age, must have served for at least five (5) years either at the BSP, the SEC or the IC, and of good moral character, unquestionable integrity, and known probity. He shall be considered a full-time, permanent employee of the BSP with the rank of Assistant Governor, and shall be entitled to such benefits and subject to rules and regulations, as well as prohibitions, as are applicable to officers of similar rank.
B. Composition. - In organizing the Secretariat, the AMLC may choose from those who have served, continuously or cumulatively, for at least five (5) years in the BSP, the SEC or the IC. All members of the Secretariat shall be considered regular employees of the BSP and shall be entitled to such benefits and subject to such rules and regulations as are applicable to BSP employees of similar rank.
C. Detail and Secondment. - The AMLC may enlist the assistance of the BSP, the SEC or the IC, or any other branch, department, bureau, office, agency or instrumentality of the government, including government-owned and controlled corporations, in undertaking any and all anti-money laundering operations. This includes the use of any member of their personnel who may be detailed or seconded to the AMLC, subject to existing laws and Civil Service Rules and Regulations.
Detailed personnel shall continue to receive their salaries, benefits and emoluments from their respective mother units. Seconded personnel shall receive, in lieu of their respective compensation packages from their respective mother units, the salaries, emoluments and all other benefits which their AMLC Secretariat positions are entitled to.
Rule 9. Preventive Measures. -
A. Customer Due Diligence. - Covered persons shall establish and record the true identity of their clients based on official documents, as defined under Rule 3.M of this RIRR. They shall maintain a system of verifying the true identity of their clients based on reliable, independent source, documents, data, or information. In case of corporate clients, covered persons are required to maintain 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 persons shall establish appropriate systems and methods, and adequate internal controls, compliant with the AMLA, this RIRR, other AMLC issuances, the guidelines issued by the Supervising Authorities, and internationally accepted anti-money laundering standards, for verifying and recording the true and full identity of their customers.
In conducting customer due diligence, a risk-based approach shall be undertaken depending on the type of customer, business relationship, or nature of the product, transaction or activity.
1. Customer Identification. -
a. Face-to-Face Contact. - Covered persons shall conduct face-to-face contact at the commencement of the relationship, or as reasonably practicable so as not to interrupt the normal conduct of business, taking into account the nature of the product, type of business and the risks involved; provided that money laundering risks are effectively managed.
The use of Information and Communication Technology in the conduct of face-to-face contact may be allowed, provided that the covered person is in possession of and has verified the identification documents submitted by the prospective client prior to the interview and that the entire procedure is documented.
b. Minimum Customer Information and Identification Documents. -
i. For individual customers and authorized signatories of juridical entities, covered persons shall gather the following customer information:
a. Name of customer;
b. Date and place of birth;
c. Name of beneficial owner, if applicable;
d. Name of beneficiary (in case of insurance contracts or remittance transactions);
e. Present address;
f. Permanent address;
g. Contact number or information;
i. Specimen signatures or biometrics of the customer;
j. Nature of work and name of employer or nature of self‐employment/ business, if applicable;
k. Sources of funds or property; and
l. Tax Identification Number (TIN), Social Security System (SSS) number, or Government Service Insurance System (GSIS) number, if applicable.
Customers who engage in a transaction with a covered person for the first time shall be required to present the original and submit a clear copy of at least one (1) official identification document.
Where the customer or authorized representative is a foreign national, covered persons shall require said foreign national to present passport or Alien Certificate of Registration issued by the Bureau of Immigration.
ii. For business entities, covered persons shall gather the following customer information, and shall obtain all of the following official documents:
(a) Customer Information (b) Identification Documents
i. Name of entity;
ii. Name of authorized signatory;
iii. Name of beneficial owner, if applicable;
iv. Official address;
v. Contact number or information;
vi. Nature of business; and
vii. Specimen signatures or biometrics of the authorized signatory. i. Certificates of Registration issued by the Department of Trade and Industry (DTI) for sole proprietors, or Certificate of Incorporation issued by the Securities and Exchange Commission (SEC) for corporations and partnerships, and by the BSP for money changers/foreign exchange dealers and remittance agents;
ii. Secondary License or Certificate of Authority issued by the Supervising Authority or other government agency;
iii. Articles of Incorporation/Partnership;
iv. Latest General Information Sheet;
v. Corporate/Partners’ Secretary Certificate citing the pertinent portion of the Board or Partners’ Resolution authorizing the signatory to sign on behalf of the entity; and
vi. For entities registered outside of the Philippines, similar documents and/or information duly authenticated by a senior officer of the covered person assigned in the country of registration; in the absence of said officer, the documents should be authenticated by the Philippine Consulate, company register or notary public, where said entities are registered.
c. Third Party Reliance. - A covered person may rely on a third party to perform customer identification, including face-to-face contact. The third party shall be:
1. A covered person; or
2. A financial institution or DNFBP operating outside the Philippines that is covered by equivalent customer identification and face-to-face requirements.
Notwithstanding the foregoing, the ultimate responsibility for identifying the customer remains with the covered person relying on the third party.
Provided that, in cases of high risk customers, the covered person relying on the third person shall also conduct enhanced due diligence procedure.
d. Outsourcing the Conduct of Customer Identification. - Covered persons may outsource the conduct of customer identification, including face-to-face contact, to a counter-party, intermediary or agent. The outsource, counter-party or intermediary shall be regarded as agent of the covered person—that is, the processes and documentation are those of the covered person itself. The ultimate responsibility for identifying the customer and keeping the identification documents remains with the covered person.
The covered person outsourcing the conduct of customer identification, including face-to-face contact, shall ensure that the employees or representatives of the counter-party, intermediary or agent undergo equivalent training program as that of the covered person’s own employees undertaking similar activity.
e. Identification and Verification of a Beneficial Owner, Trustee, Nominee, or Agent. - Where an account is opened or a transaction is conducted by any person in behalf of another, covered persons shall establish and record the true and full identity and existence of both the account holder or transactor and the beneficial owner or person on whose behalf the transaction is being conducted.
The covered person shall determine the true nature of the parties’ capacities and duties by obtaining a copy of the written document evidencing their relationship and apply the same standards for assessing the risk profile and determining the standard of due diligence to be applied to both. In case it entertains doubts as to whether the account holder or transactor is being used as a dummy in circumvention of existing laws, it shall apply enhanced due diligence or file a suspicious transaction report, if warranted.
2. Risk Assessment. - Covered persons shall develop clear, written and graduated customer acceptance policies and procedures, including a set of criteria for customers that are likely to pose low, normal, or high risk to their operations. The criteria may include: (1) the nature of the service or product to be availed of by the customers; (2) the purpose of the account or transaction; (3) the amount of funds to be deposited by a customer or the size of transactions undertaken; (4) the regularity or duration of the transaction; (5) the fact that a customer came from a high risk jurisdiction; (6) the existence of suspicious transaction indicators; and (7) such other factors the covered persons may deem reasonable or necessary to consider in assessing the risk of a customer to money laundering.
Covered persons shall set the standards in applying reduced, normal, and enhanced customer due diligence, including a set of conditions for the denial of account opening or services.
a. Reduced Due Diligence. - Where lower risks of money laundering and terrorist financing have been identified, through an adequate analysis of risk by the covered persons, reduced due diligence procedures may be applied. The reduced due diligence procedures should be commensurate with the lower risk factors, but are not acceptable whenever there is suspicion of money laundering or terrorist financing, or specific higher risk scenarios apply.
In strictly limited circumstances and where there is proven low risk of money laundering and terrorist financing, the Supervising Authorities may issue guidelines allowing certain exemptions, taking into account the nature of the product, type of business and the risks involved; provided that money laundering risks are effectively managed.
b. Enhanced Due Diligence. - Covered persons shall examine the background and purpose of all complex, unusually large transactions, all unusual patterns of transactions, which have no apparent economic or lawful purpose, and other transactions that may be considered suspicious.
Where the risks of money laundering or terrorist financing are higher, covered persons should be required to conduct enhanced due diligence measures, consistent with the risks identified.
For this purpose, covered persons shall perform the following:
i. gather additional customer information and identification documents, such as, but not limited to, occupation, volume of assets information available through public databases, internet, and updating more regularly the identification data of customer and beneficial owner;
ii. obtain additional information on the intended nature of the business relationship; the source of funds or wealth of the customer; and the reasons for intended or performed transaction;
iii. conduct validation procedures;
iv. secure the approval of senior management to commence or continue transacting with the customer;
v. conduct enhanced ongoing monitoring of the business relationship;
vi. require the first payment to be carried out through an account in the customer’s name with a bank subject to similar customer due diligence standards, where applicable; and
vii. such other measures as the covered persons may deem reasonable or necessary.
3. Ongoing Monitoring of Customers, Accounts and Transactions. – Covered persons shall, on the basis of materiality and risk, update all customer information and identification documents of existing customers required to be obtained under the AMLA, this RIRR, other AMLC issuances, and the guidelines issued by the Supervising Authorities.
Covered persons shall establish a system that will enable them to understand the normal and reasonable account or business activity of customers to ensure that the customers’ accounts and transactions are consistent with the covered person’s knowledge of its customers, and the latter’s commercial activities, risk profile, and source of funds.
Covered persons shall apply enhanced due diligence on the customer if it acquires information in the course of its customer account or transaction monitoring that:
a. Raises doubt as to the accuracy of any information or document provided or the ownership of the entity;
b. Justifies reclassification of the customer from low or normal risk to high risk pursuant to these Rules;
c. Indicates that any of the circumstances for the filing of a suspicious transaction report exists.
If the covered person:
a. fails to satisfactorily complete the enhanced due diligence procedures; or
b. reasonably believes that performing the enhanced due diligence process will tip-off the customer,
it shall file a suspicious transaction report, and closely monitor the account and review the business relationship.
Covered persons shall, on the basis of materiality and risk, update, no later than once every three (3) years, all customer information and identification documents, unless enhanced ongoing monitoring is warranted.
4. Prohibited Accounts. - The following accounts shall be prohibited and may be the subject of the Supervising Authorities’ annual testing for the sole purpose of determining the existence and true identity of their owners:
a. Anonymous Accounts and Accounts under Fictitious Names. - Covered persons shall maintain customers’ account only in the true and full name of the account owner or holder. Anonymous accounts, accounts under fictitious names, and all other similar accounts shall be absolutely prohibited.
b. Numbered Accounts. - Numbered accounts, except non-checking numbered accounts, shall not be allowed.
Covered and suspicious transaction reports involving non-checking numbered accounts shall contain the true name of the account holder.
B. Record Keeping. - Covered persons shall maintain and safely store for five (5) years from the dates of transactions all records of customer identification and transaction documents.
1. Retention of Records Where the Account is the Subject of a Case. - If a case has been filed in court involving the account, records must be retained and safely kept beyond the five (5)-year period, until it is officially confirmed by the AMLC Secretariat that the case has been resolved, decided or terminated with finality.
2 Closed Accounts. - Covered persons shall maintain and safely store for at least five (5) years from the dates the accounts were closed, all records of customer identification and transaction documents.
3. Form of Records. - Covered persons shall retain all records as originals or in such forms as are admissible in court.
Covered persons shall, likewise, keep the electronic copies of all covered and suspicious transaction reports for, at least, five (5) years from the dates of submission to the AMLC.
For low risk customers, it is sufficient that covered persons shall maintain and store, in whatever form, a record of customer information and transactions.
C. Transaction Reporting. - Covered persons shall report to the AMLC all covered transactions and suspicious transactions within five (5) working days, unless the AMLC prescribes a different period not exceeding fifteen (15) working days, from the occurrence thereof.
For suspicious transactions, “occurrence” refers to the date of determination of the suspicious nature of the transaction, which determination should be made not exceeding ten (10) calendar days from the date of transaction. However, if the transaction is in any way related to, or the person transacting is involved in or connected to, an unlawful activity or money laundering offense, the 10-day period for determination shall be reckoned from the date the covered person knew or should have known the suspicious transaction indicator.
Should a transaction be determined to be both a covered and a suspicious transaction, the same shall be reported as a suspicious transaction.
1. Substance and Form of Reports. - Covered persons shall ensure the accuracy and completeness of covered transaction report and suspicious transaction report, which shall be filed in the forms prescribed by the AMLC and shall be submitted in a secured manner to the AMLC in electronic form.
2. Confidentiality of Reporting. - When reporting covered or suspicious transactions, covered persons, and their officers and employees, are prohibited from communicating, directly or indirectly, in any manner or by any means, to any person or entity, or the media, the fact that a covered or suspicious transaction has been or is about to be reported, the contents of the report, or any other information in relation thereto.
Any information about such reporting shall not be published or aired, in any manner or form, by the mass media, or through electronic mail, or other similar devices.
In case of violation thereof, the concerned officer, and employee, of the covered person and media shall be held criminally liable.
3. Safe Harbor Provision. - No administrative, criminal or civil proceedings shall lie against any person for having made a covered transaction or suspicious transactaction report in the regular performance of his duties and in good faith, whether or not such reporting results in any criminal prosecution under the AMLA or any other Philippine law.
4. Enrollment with the AMLC’s Reporting System. - All covered persons shall register with the AMLC’s electronic reporting system within ninety (90) days from the effectivity of this RIRR.
FOR SPECIFIC CUSTOMERS AND ACTIVITIES
Rule 9-A. Preventive Measures for Specific Customers and Activities. -
1. Politically Exposed Persons. - Covered persons shall establish and record the true and full identity of PEPs, as well as their immediate family members and entities related to them.
a. In case of domestic PEPs or persons who have been entrusted with a prominent function by an international organization, in addition to performing the applicable due diligence measures under Rule 9, covered persons shall:
i. Take reasonable measures to determine whether a customer or the beneficial owner is a PEP; and
ii. In cases when there is a higher risk business relationship, adopt measures under paragraphs b.ii to b.iv below.
b. In relation to foreign PEPs, in addition to performing the applicable customer due diligence measures under Rule 9, covered persons shall:
i. Put in place risk management systems to determine whether a customer or the beneficial owner is a PEP;
ii. Obtain senior management approval before establishing (or continuing, for existing customers) such business relationships;
iii. Take reasonable measures to establish the source of wealth and the source of funds of customers and beneficial owners identified as PEPs; and
iv. Conduct enhanced ongoing monitoring on that relationship.
2. Correspondent Banking. - Covered persons shall adopt policies and procedures to prevent correspondent banking activities from being utilized for money laundering activities, and designate an officer responsible in ensuring compliance with these policies and procedures.
A covered person may rely on the customer identification process undertaken by the respondent bank pursuant to the circulars and guidelines that may be promulgated by the BSP.
a. In relation to cross-border correspondent banking and other similar relationships, covered persons are required to:
i. Gather sufficient information about the respondent institution to understand fully the nature of the respondent’s business, and to determine from publicly available information the reputation of the institution and the quality of supervision, including whether it has been subject to a money laundering and terrorist financing (ML/TF) investigation or regulatory action;
ii. Assess the respondent institution’s anti-money laundering and combating the financing of terrorism (AML/CFT) controls;
iii. Obtain approval from senior management before establishing new correspondent relationships; and
iv. Clearly understand the respective AML/CFT responsibilities of each institution.
b. With respect to “payable-through accounts,” covered persons are required to satisfy themselves that the respondent bank:
i. Has performed customer due diligence obligations on its customers that have direct access to the accounts of the correspondent bank; and
ii. Is able to provide relevant customer due diligence information upon request to the correspondent bank.
Covered persons are prohibited from entering into, or continuing, correspondent banking relationships with shell banks and should have measures to satisfy themselves that respondent financial institutions do not permit their accounts to be used by shell banks.
3. Shell Company/Bank and Bearer Share Entities. - A covered person shall always apply enhanced due diligence on both the entity and its beneficial owners when dealing with a shell company.
No shell bank shall be allowed to operate or be established in the Philippines. Covered persons shall refuse to deal, enter into, or continue, correspondent banking relationship with shell banks. They shall likewise guard against establishing relations with foreign financial institutions that permit their accounts to be used by shell banks.
A covered person dealing with bearer share entities shall be required to conduct enhanced due diligence on said entities and their existing stockholders and/or beneficial owners at the time of opening of the account. These entities shall be subject to ongoing monitoring at all times and the list of stockholders and/or beneficial owners shall be updated within thirty (30) days after every transfer of ownership and the appropriate enhanced due diligence shall be applied to the new stockholders and/or beneficial owners.
4. Wire/Fund Transfers. - Covered persons shall establish policies and procedures designed to prevent wire/fund transfers from being utilized for money laundering activities, which shall include, but are not limited to the following:
a. The beneficiary institution shall not accept instructions to pay-out wire/fund transfers to non-customer beneficiary, unless it has conducted the necessary customer due diligence to establish the true and full identity and existence of said beneficiary. Should the originator and beneficiary be the same person, the beneficiary institution may rely on the customer due diligence conducted by the originating institution subject to the rules on Third Party Reliance promulgated by the BSP, treating the originating institution as third party;
b. The originating institution shall not accept instructions to wire/fund transfer from a non-customer originator, unless it has conducted the necessary customer due diligence to establish the true and full identity and existence of said originator;
c. In cross border wire/fund transfers, if the originator is a high risk customer as herein described, the beneficiary institution shall conduct enhanced due diligence on the beneficiary and the originator. Where additional information cannot be obtained, or any information or document provided is false or falsified, or the result of the validation process is unsatisfactory, the beneficiary institution shall refuse to effect the wire/fund transfers or the pay-out of funds without prejudice to the reporting of a suspicious transaction to the AMLC;
d. Whenever possible, manually initiated fund transfer (MIFT) instructions should not be the primary delivery method. Every effort shall be made to provide client with an electronic banking solution;
e. Cross border and domestic wire/fund transfers and related message.
i. For those not exceeding the threshold amount to be determined by the BSP or its equivalent in foreign currency, they shall include accurate and meaningful originator and beneficiary information. The following information shall remain with the transfer or related message through the payment chain:
a. the name of the originator;
b. the name of the beneficiary; and
c. an account number of the originator and beneficiary, or in its absence, a unique transaction reference number.
ii. For those that are equal or greater than the said threshold amount or its equivalent in foreign currency, the following information shall be obtained from all qualifying wire transfers:
a. the name of the originator;
b. the originator account number where such an account is used to process the transaction;
c. the originator’s address, or national identity number, or customer identification number, or date and place of birth;
d. the name of the beneficiary; and
e. the beneficiary account number where such an account is used to process the transaction.
f. Should any wire/fund transfer amounting to or exceeding the threshold amount as determined by the BSP, or its equivalent in foreign currency, be unaccompanied by the required originator and beneficiary information, the beneficiary institution shall exert all efforts to establish the true and full identity and existence of the originator by requiring additional information from the originating institution or intermediary institution. It shall likewise apply enhanced customer due diligence to establish the true and full identity and existence of the beneficiary. Where additional information cannot be obtained, or any information or document provided is false or falsified, or the result of the validation process is unsatisfactory, the beneficiary institution shall refuse to effect the wire/fund transfer or the pay-out of funds without prejudice to the reporting of a suspicious transaction to the AMLC.
5. Customer from High Risk Jurisdiction. - A customer from a foreign jurisdiction that is recognized as having inadequate internationally accepted anti-money laundering standards, or presents greater risk for money laundering or its associated unlawful activities, shall be subject to enhanced customer due diligence.
6. Foreign Branches and Subsidiaries. – Covered persons shall ensure that their foreign branches and majority-owned subsidiaries apply the requirements under the AMLA, this RIRR, and other AMLC issuances, where the minimum AML/CFT requirements of the host county are less strict, to the extent that the laws and regulations of the host country permit.
If the host country does not permit the proper implementation of the measures under the AMLA, this RIRRs, and other AMLC issuances, covered persons shall apply appropriate additional measures to manage the ML/TF risks, and inform their respective Supervising Authorities and the AMLC.
Rule 10. Freeze Order. -
A. Freeze Order. - Upon verified ex parte petition by the AMLC and after determination that probable cause exists that any monetary instrument or property is in any way related to an unlawful activity, the Court of Appeals may issue a freeze order, which shall be effective immediately, directing the concerned covered persons and government agency to desist from allowing any transaction, withdrawal, transfer, removal, conversion, concealment, or other disposition of the subject monetary instrument or property.
1. Freezing of Related Accounts and Materially-Linked Accounts. - Considering the intricate and diverse web of interlocking accounts that a person may create in different covered persons, and the high probability that these accounts are utilized to divert, move, conceal, and disguise the monetary instrument or property subject of the freeze order, the AMLC may include in its petition the freezing of related and materially-linked accounts.
2. Period to Resolve Petition. - The Court of Appeals shall resolve the petition to freeze within twenty-four (24) hours from filing thereof.
3. Effectivity of Freeze Order. - The freeze order shall be effective immediately and shall not exceed six (6) months depending upon the circumstances of the case. On motion of the AMLC filed before the expiration of the original period of the freeze order, the court may, for good cause shown, extend its effectivity. Upon the timely filing of such motion and pending resolution by the Court of Appeals, the freeze order shall remain effective.
4. No Prior Criminal Charge, Pendency of or Conviction Necessary. - No prior criminal charge, pendency of or conviction for an unlawful activity or money laundering offense is necessary for the commencement or the resolution of a petition for freeze order.
5. Rule of Procedure. - Proceedings for the issuance of freeze order shall be governed by the “Rule of Procedure in Cases of Civil Forfeiture, Asset Preservation, and Freezing of Monetary Instrument, Property, or Proceeds Representing, Involving, or Relating to an Unlawful Activity or Money Laundering Offense under Republic Act No. 9160, as Amended” (A.M. No. 05-11-04-SC).
B. Motion to Lift. - A person whose monetary instrument or property has been frozen may file a motion to lift the freeze order. The court must resolve the motion before the expiration of the freeze order.
C. Lifting the Effects of the Freeze Order. - The freeze order shall be deemed ipso facto lifted after its expiration, unless a money laundering complaint against the person whose monetary instrument or property was frozen, or a petition for civil forfeiture against the frozen monetary instrument or property, has been filed, in which case the freeze order shall remain effective until the money laundering case is terminated or an asset preservation order is issued, respectively.
Upon the expiration of the freeze order, the covered person shall secure a written confirmation from the AMLC Secretariat to ascertain if a petition for civil forfeiture or money laundering complaint has been filed.
D. Injunction Against Freeze Order. - No court shall issue a temporary restraining order or a writ of injunction against any freeze order, except the Supreme Court.
E. Duties of Covered Persons and Concerned Government Agencies Upon Receipt of Freeze Order. -
1. Implement Freeze Order. - Upon receipt of the notice of the freeze order, the covered person and government agency concerned shall immediately freeze the monetary instrument or property subject thereof, and shall immediately desist from and not allow any transaction, withdrawal, transfer, removal, conversion, other movement or concealment thereof.
2. Freeze Related Accounts. - Upon receipt of the freeze order and upon verification by the covered person that there are accounts related to the monetary instrument or property subject of the freeze order, the covered person shall immediately freeze these related accounts wherever these may be found.
If the related accounts cannot be determined within twenty-four (24) hours from receipt of the freeze order due to the volume and/or complexity of the transactions, or any other justifiable factors, the covered person shall effect the freezing of the related accounts within a reasonable period and shall submit a supplemental return thereof to the Court of Appeals and the AMLC within twenty-four (24) hours from the freezing of said related accounts.
3. Furnish Copy of Freeze Order to Owner or Holder. - The covered person and government agency concerned shall likewise immediately furnish a copy of the notice of the freeze order upon the owner or holder of the monetary instrument or property or related accounts subject thereof.
4. Submit Detailed Return. - Within twenty-four (24) hours from receipt of the freeze order, the covered person and government agency concerned shall submit, by personal delivery, to the Court of Appeals and to the AMLC, a written detailed return on the freeze order.
The covered person shall also submit to the AMLC, through the internet, an electronic detailed return in a format to be prescribed by the latter.
5. Contents of the Detailed Return. - The detailed return on the freeze order shall specify all the pertinent and relevant information, which shall include the following:
a. For covered persons: The account numbers and/or description of the monetary instrument, property, or proceeds involved;
b. For concerned government agencies:
i. Certificates of title numbers of registered real property and the volumes and pages of the registration books of the Register of Deeds where the same are registered;
ii. Registration in the Primary Entry Book and corresponding Registration Book in the Register of Deeds for unregistered real property;
iii. Registration with the Register of Deeds of the enabling or master deed for a condominium project, declaration of restrictions relating to such condominium project, certificate of title conveying a condominium and notice of assessment upon any condominium;
iv. Tax declarations for improvements built on land owned by a different party, together with the annotation of the contract of lease on the title of the owner of the land as registered in the Register of Deeds;
v. Certificates of registration for motor vehicles and heavy equipment indicating the engine numbers, chassis numbers and plate numbers;
vi. Certificates of numbers for seacraft;
vii. Registration certificates for aircraft; or
vii. Commercial invoices or notarial identification for personal property capable of manual delivery;
c. For covered persons and government agencies, whichever are applicable:
i. The names of the account holders, personal property owners or possessors, or real property owners or occupants;
ii. The value of the monetary instrument, property, or proceeds as of the time the assets were ordered frozen;
iii. All relevant information as to the status and nature of the monetary instrument, property, or proceeds;
iv. The date and time when the freeze order was served; and
v. The basis for the identification of the related accounts.
Rule 11. Bank Inquiry. -
A. Bank Inquiry with Court Order. - Notwithstanding the provisions of Republic Act No. 1405, as amended; Republic Act No. 6426, as amended; Republic Act No. 8791, and other laws, the AMLC may inquire into or examine any particular deposit or investment account, including related accounts, with any banking institution or non-bank financial institution, upon order by the Court of Appeals based on an ex parte application in cases of violation of the AMLA when it has been established that probable cause exists that the deposits or investments involved, including related accounts, are in any way related to an unlawful activity or a money laundering offense.
1. Period to Resolve Application. - The Court of Appeals shall resolve the application within twenty-four (24) hours from filing thereof.
2. Inquiry Into or Examination of Related Accounts. - A court order ex parte must be obtained before the AMLC can inquire into the related accounts. The procedure for the ex parte application for an order of inquiry into the principal account shall be the same for that of the related accounts.
3. Compliance with Article III, Sections 2 and 3 of the Constitution. - The authority to inquire into or examine the main account and the related accounts shall comply with the requirements of Article III, Sections 2 and 3 of the 1987 Constitution.
4. No Prior Criminal Charge, Pendency of or Conviction Necessary. - No prior criminal charge, pendency of or conviction for an unlawful activity or money laundering offense is necessary for the commencement or the resolution of an application for bank inquiry.
B. Bank Inquiry without Court Order. - The AMLC shall issue a resolution authorizing the AMLC Secretariat to inquire into or examine any particular deposit or investment account, including related accounts, with any banking institution or non-bank financial institution and their subsidiaries and affiliates when it has been established that probable cause exists that the deposits or investments involved, including related accounts, are in any way related to any of the following unlawful activities:
1. Kidnapping for ransom under Article 267 of Act No. 3815, otherwise known as the Revised Penal Code, as amended;
2. Sections 4, 5, 6, 8, 9, 10, 11, 12, 13, 14, 15 and 16 of Republic Act No. 9165, otherwise known as the Comprehensive Dangerous Drugs Act of 2002;
3. Hijacking and other violations under Republic Act No. 6235; destructive arson and murder, as defined under the Revised Penal Code, as amended;
4. Felonies or offenses of a nature similar to those mentioned in Section 3(i) (1), (2) and (12) of the AMLA which are punishable under the penal laws of other countries;
5. Terrorism and conspiracy to commit terrorism as defined and penalized under Republic Act No. 9372; and
6. 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.
C. Duties of the Covered Persons Upon Receipt of Bank Inquiry Order. - The concerned covered persons shall immediately, upon receipt of the court order or AMLC Resolution, give the AMLC and/or its Secretariat full access to all information, documents or objects pertaining to the deposit, investment, account and/or transaction.
Certified true copies of the documents pertaining to deposit, investment, account and/or transaction subject of the bank inquiry shall be submitted to the AMLC Secretariat, within five (5) working days from receipt of the court order or AMLC Resolution.
D. Authority of the Bangko Sentral ng Pilipinas to Inquire Into or Examine Bank Accounts. - In the course of a periodic or special examination, the BSP may inquire into or examine bank accounts, including customer identification, account opening, and transaction documents, for the purpose of checking compliance by covered persons under its supervision or regulation with the requirements of the AMLA, this RIRR, and other AMLC issuances.
Rule 12. Asset Forfeiture. -
A. Civil Forfeiture. - Upon determination that probable cause exists that any monetary instrument or property is in any way related to an unlawful activity or a money laundering offense, the AMLC shall file with the regional trial court, through the Office of the Solicitor General, a verified petition for civil forfeiture.
1. Equal Value Assets. - The petition for civil forfeiture shall include other monetary instrument or property of equal value in cases where the monetary instrument or property that should be subject of forfeiture:
a. cannot be located despite due diligence;
b. has been substantially altered, destroyed, diminished in value or otherwise rendered worthless by any act or omission;
c. has been concealed, removed, converted, or otherwise transferred;
d is located outside the Philippines or has been placed or brought outside the jurisdiction of the court; or
e. has been commingled with other monetary instrument or property belonging to either the offender himself or a third person or entity, thereby rendering the same difficult to identify or be segregated for purposes of forfeiture.
2. No Prior Criminal Charge, Pendency of or Conviction Necessary. - No prior criminal charge, pendency of or conviction for an unlawful activity or money laundering offense is necessary for the commencement or the resolution of a petition for civil forfeiture.
3. Rule of Procedure. - Civil forfeiture proceedings shall be governed by the “Rule of Procedure in Cases of Civil Forfeiture, Asset Preservation, and Freezing of Monetary Instrument, Property, or Proceeds Representing, Involving, or Relating to an Unlawful Activity or Money Laundering Offense under Republic Act No. 9160, as Amended” (A.M. No. 05-11-04-SC).
B. Asset Forfeiture in Money Laundering Cases. - Where there is conviction for money laundering, 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 an unlawful activity.
C. Claim on Forfeited Assets. - Where the court has issued an order of forfeiture of the monetary instrument or property in a criminal prosecution for any money laundering offense, the offender or any other person claiming an interest therein may apply, by verified petition, for a declaration that the same legitimately belongs to him and for segregation or exclusion of the monetary instrument or property corresponding thereto. The verified petition shall be filed with the court which rendered the judgment of forfeiture, within fifteen (15) days from the date of the finality of the order of forfeiture, in default of which the said order shall become final and executory. This provision shall also apply in civil forfeiture.
D. Payment in Lieu of Forfeiture. - Where the court has issued an order of forfeiture of the monetary instrument or property subject of a money laundering offense, and said order cannot be enforced because any particular monetary instrument or property cannot, with due diligence, be located, or it has been substantially altered, destroyed, diminished in value or otherwise rendered worthless by any act or omission, directly or indirectly, attributable to the offender, or it has been concealed, removed, converted, or otherwise transferred to prevent the same from being found or to avoid forfeiture thereof, or it is located outside the Philippines or has been placed or brought outside the jurisdiction of the court, or it has been commingled with other monetary instruments or property belonging to either the offender himself or a third person or entity, thereby rendering the same difficult to identify or be segregated for purposes of forfeiture, the court may, instead of enforcing the order of forfeiture of the monetary instrument or property or part thereof or interest therein, accordingly order the convicted offender to pay an amount equal to the value of said monetary instrument or property. This provision shall apply in both civil and criminal forfeiture.
REQUEST FOR ASSISTANCE
Rule 13. Request for Assistance. -
A. Request for Assistance from a Foreign State. - Where a foreign State makes a request for assistance in the investigation or prosecution of a money laundering offense, the AMLC may execute the request or refuse to execute the same and inform the foreign State of any valid reason for not executing the request or for delaying the execution thereof. The principles of mutuality and reciprocity shall, at all times, be recognized.
B. Powers of the AMLC to Act on a Request for Assistance from a Foreign State. - The AMLC may execute a request for assistance from a foreign State by:
1. tracking down, freezing, restraining and seizing assets alleged to be proceeds of any unlawful activity under the procedures laid down in the AMLA, this RIRR, and other AMLC issuances;
2. giving information needed by the foreign State within the procedures laid down in the AMLA, this RIRR, and other AMLC issuances; and
3. applying for an order of forfeiture of any monetary instrument or property with the court: Provided, that the court shall not issue such an order unless the application is accompanied by an authenticated copy of the order of a court in the requesting State ordering the forfeiture of said monetary instrument or property of a person who has been convicted of a money laundering offense or an unlawful activity in the requesting State, and a certification or an affidavit of a competent officer of the requesting State stating that the conviction and the order of forfeiture are final and that no further appeal lies in respect of either.
C. Obtaining Assistance from Foreign States. - The AMLC may make a request to any foreign State for assistance in:
1. tracking down, freezing, restraining and seizing assets alleged to be proceeds of any unlawful activity;
2. obtaining pertinent information and documents that it needs relating to any money laundering offense or any other matter directly or indirectly related thereto;
3. to the extent allowed by the law of the foreign State, applying with the proper court therein for an order to enter any premises belonging to or in the possession or control of, any or all of the persons named in said request, and/or search any or all such persons named therein and/or remove any document, material or object named in said request: Provided, That the documents accompanying the request in support of the application have been duly authenticated in accordance with the applicable law or regulation of the foreign State; and
4. applying for an order of forfeiture of any monetary instrument or property in the proper court in the foreign State: Provided, That the request is accompanied by an authenticated copy of the order of the Regional Trial Court ordering the forfeiture of said monetary instrument or property and an affidavit of the clerk of court stating that the order of forfeiture is final and that no further appeal lies in respect of it.
D. Limitations on Requests for Mutual Assistance. - The AMLC may refuse to comply with any request for assistance where the action sought in the request contravenes any provision of the Constitution or the execution of the request is likely to prejudice the national interest of the Philippines, unless there is a treaty between the Philippines and the requesting State relating to the provision of assistance in relation to money laundering offenses.
E. Requirements for Requests for Mutual Assistance from Foreign States. - A request for mutual assistance from a foreign State must:
1. confirm that an investigation or prosecution is being conducted in respect of a money launderer named therein or that he has been convicted of any money laundering offense;
2. state the grounds on which any person is being investigated or prosecuted for money laundering or the details of his conviction;
3. give sufficient particulars as to the identity of said person;
4. give particulars sufficient to identify any covered person believed to have any information, document, material or object which may be of assistance to the investigation or prosecution;
5. ask from the covered person concerned any information, document, material or object which may be of assistance to the investigation or prosecution;
6. specify the manner in which and to whom said information, document, material or object obtained pursuant to said request, is to be produced;
7. give all the particulars necessary for the issuance by the court in the requested State of the writs, orders or processes needed by the requesting State; and
8. contain such other information as may assist in the execution of the request.
F. Authentication of Documents. - A document is authenticated if it is signed or certified by a judge, magistrate or equivalent officer in or of, the requesting State, and authenticated by the oath or affirmation of a witness or sealed with an official or public seal of a minister, secretary of state, or officer in or of, the government of the requesting State, or of the person administering the government or a department of the requesting territory, protectorate or colony.
The certificate of authentication may also be made by a secretary of the embassy or legation, consul general, consul, vice consul, consular agent or any officer in the foreign service of the Philippines stationed in the foreign State in which the record is kept, and authenticated by the seal of his office.
G. Suppletory Application of the Revised Rules of Court. - For attachment of Philippine properties in the name of persons convicted of any unlawful activity, execution and satisfaction of final judgments of forfeiture, application for examination of witnesses, procuring search warrants, production of bank documents and other materials, and all other actions not specified in the AMLA, this RIRR, and other AMLC issuances, and assistance for any of the aforementioned actions, which is subject of a request by a foreign State, resort may be had to the proceedings pertinent thereto under the Revised Rules of Court.
H. Authority to Assist the United Nations and Other International Organizations. - The AMLC shall cooperate with the National Government and/or take appropriate action in respect of conventions, resolutions and other directives, involving money laundering, of the United Nations (UN), the UN Security Council, and other international organizations of which the Philippines is a member.
However, the AMLC may refuse to comply with any request in relation to a convention, resolution or directive where the action sought therein contravenes the provision of the Constitution or the execution thereof is likely to prejudice the national interest of the Philippines.
I. Extradition. - The Philippines shall negotiate for the inclusion of money laundering offenses among the extraditable offenses in all future treaties.
With respect, however, to the state parties that are signatories to the United Nations Convention Against Transnational Organized Crime that was ratified by the Philippine Senate on October 22, 2001, money laundering is deemed to be included as an extraditable offense in any extradition treaty existing between said state parties, and the Philippines shall include money laundering as an extraditable offense in every extradition treaty that may be concluded between the Philippines and any of said state parties in the future.
Rule 14. Penal Provisions. -
A. Penalties for Money Laundering. - The following are the penalties to be imposed on persons convicted of money laundering:
1. Penalties for Section 4(a), (b), (c) and (d) of the AMLA. - The penalty of imprisonment ranging from seven (7) to fourteen (14) years and a fine of not less than three million pesos (Php3,000,000.00), but not more 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), (b), (c) and (d) of the AMLA, as amended.
2. Penalties for Section 4(e) and (f) of the AMLA. - The penalty of imprisonment from four (4) to seven (7) years and a fine of not less than one million five hundred thousand pesos (Php1,500,000.00) but not more than three million pesos (Php3,000,000.00), shall be imposed upon a person convicted under Section 4(e) and (f) of the AMLA, as amended.
3. Penalties for the Last Paragraph of Section 4 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 pesos (Php100,000.00) but not more than five hundred thousand pesos (Php500,000.00), or both, shall be imposed on a person convicted under the last paragraph of Section 4 of the AMLA, as amended.
B. Penalties for Knowingly Participating in the Commission of Money Laundering. - The penalty of imprisonment ranging from four (4) to seven (7) years and a fine corresponding to not more than two hundred percent (200%) of the value of the monetary instrument or property laundered shall be imposed upon the covered person, its directors, officers or personnel who knowingly participated in the commission of the crime of money laundering.
C. Penalties for Failure to Keep Records. - The penalty of imprisonment from six (6) months to one (1) year or a fine of not less than one hundred thousand pesos (Php100,000.00) but not more than five hundred thousand pesos (Php500,000.00), or both, shall be imposed on a person convicted under Section 9(b) of the AMLA.
D. Penalties for 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 pesos (Php100,000.00) but not more than five hundred thousand pesos (Php500,000.00), at the discretion of the court: Provided, that the offender is not entitled to avail of the benefits of the Probation Law.
If the offender is a corporation, association, partnership or any other juridical person, the penalty of imprisonment and/or fine 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 and 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.
Any public official or employee who is called upon to testify and refuses to do the same or purposely fails to testify shall suffer the same penalties herein prescribed.
E. Penalties for Breach of Confidentiality. - The punishment of imprisonment ranging from three (3) to eight (8) years and a fine of not less than five hundred thousand pesos (Php500,000.00) but not more than one million pesos (Php1,000,000.00), shall be imposed on a person convicted for a violation under Section 9(c) of the AMLA. In case of a breach of confidentiality that is published or reported by the media, the responsible reporter, writer, president, publisher, manager and editor-in-chief shall be liable under the AMLA.
F. Criminal Liability of Corporate Entities. - If the offender is a corporate entity, the penalties herein shall be imposed upon the responsible officers who participated in, or allowed by their gross negligence the commission of the crime; and/or directors or trustees who willfully and knowingly voted for or assented to violate the AMLA, this RIRR, or other AMLC issuances.
Rule 15. Administrative Sanctions. -
A. Imposition of Administrative Sanctions. - After due notice and hearing, the AMLC shall, at its discretion, impose sanctions, including monetary penalties, warning or reprimand, upon any covered person, its directors, officers, employees, or any other person for the violation of the AMLA and this RIRR, or for failure or refusal to comply with AMLC orders, resolutions and other issuances. Such monetary penalties shall be in amounts as may be determined by the AMLC to be appropriate, which shall not be more than five hundred thousand pesos (Php500,000.00) per violation.
The imposition of administrative sanctions shall be without prejudice to the filing of criminal charges against the persons responsible for the violation.
B. Rules on Imposition of Administrative Sanctions. - The AMLC may promulgate rules on the imposition of administrative sanctions, taking into consideration the attendant circumstances, such as the nature and gravity of the violation or irregularity.
C. Non-discrimination Against Certain Types of Customers. - The provisions of the AMLA shall not be construed or implemented in a manner that will discriminate against certain customer types, such as politically-exposed persons, as well as their relatives; or against a certain religion, race, or ethnic origin; or such other attributes or profiles when used as the only basis to deny these persons access to the services provided by the covered persons.
Whenever a bank, or quasi-bank, financial institution or whenever any person or entity commits said discriminatory act, the person or persons responsible for such violation shall be subject to sanctions as may be deemed appropriate by their respective Supervising Authorities.
PROHIBITIONS AGAINST POLITICAL PERSECUTION
Rule 16. Prohibitions Against Political Persecution. - The AMLA and this RIRR 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 against, and no assets shall be frozen, attached or forfeited to the prejudice of a candidate for an electoral office during an election period.
Rule 17. Restitution. - Restitution for any aggrieved party shall be governed by the provisions of the New Civil Code.
ANTI-MONEY LAUNDERING PROGRAMS
Rule 18. Anti-Money Laundering Programs. -
A. Anti-Money Laundering Guidelines and Circulars of Supervising Authorities. - The Supervising Authorities shall issue and/or update their respective anti-money laundering guidelines and circulars for the guidance and compliance of covered persons under their respective jurisdictions, to assist the AMLC in effectively implementing the provisions of the AMLA, this RIRR, and other AMLC issuances.
The anti-money laundering guidelines and circulars of Supervising Authorities shall include, but not limited to, the following:
1. Details, policies, and procedures in implementing the provisions on Customer Due Diligence, considering risk-based approach, financial inclusion, sound AML risk management practices, and internationally-accepted AML standards;
2. Red flag indicators that engender a reasonable belief that a money laundering offense is about to be, is being, or has been committed;
3. System/procedure of flagging and monitoring transactions that qualify as suspicious transactions or covered transactions;
4. Guidelines on risk-management system to determine whether a customer or beneficial owner is a PEP;
5. Policies on identification, assessment, management and mitigation of money laundering risks that may arise from the development of new products and new business practices, including new delivery mechanisms; and the use of new or developing technologies for both new and pre-existing products; and
6. Rules on AML compliance examination, including access to pertinent records and information, and AML rating system.
Notwithstanding the foregoing, all anti-money laundering guidelines and circulars of Supervising Authorities shall be consistent with internationally-accepted AML standards and the provisions of the AMLA, this RIRR and other AMLC issuances.
B. Money Laundering Prevention Programs of Covered Persons. -
1. Formulation and Implementation. - Covered persons shall formulate and implement their money laundering prevention program (MLPP) in accordance with the AMLA, this RIRR, other AMLC issuances, and the anti-money laundering guidelines and circulars of the Supervising Authorities. The MLPP shall be approved by the responsible officer (in case of single proprietorship and partnership), the Board of Directors, the country or regional head, or its equivalent for local branches of foreign juridical entities.
Covered persons are given one (1) year from the effectivity of this RIRR to formulate or update their respective MLPP.
2. Updating. - Covered persons shall regularly update their anti-money laundering programs, in no case longer than, two (2) years, to incorporate changes in the anti-money laundering laws, rules and regulations, policies and procedures, latest trends in money laundering typologies, and latest guidelines and circulars of the Supervising Authorities.
C. Training Programs for Personnel. - Covered persons shall provide all their responsible officers and personnel with effective training and continuing education programs to enable them to fully comply with all their obligations under the AMLA, this RIRR, and other AMLC issuances.
COMPLIANCE CHECKING AND INVESTIGATION
Rule 19. Compliance Checking and Investigation. -
A. Compliance Checking. -
1. Authority of the Supervising Authorities to Assist the AMLC in Compliance Checking. - The Supervising Authorities shall assist the AMLC in checking the compliance of covered persons under their respective jurisdictions on the requirements of the AMLA, this RIRR and other AMLC issuances.
2. Checking of Covered Person’s MLPP. - Covered persons shall make available its MLPP upon request of the AMLC or the Supervising Authorities.
B. Investigation. -
1. Authority to Investigate. - The AMLC, through its Secretariat, shall investigate suspicious transactions and covered transactions deemed suspicious, money laundering activities, and other violations of the AMLA, this RIRR, and other AMLC issuances.
In the exercise of its investigative function, the AMLC, through its Secretariat, may:
a. direct covered persons to produce information, documents and objects necessary to determine the true identity of persons subject of investigation;
b. require responsible officers and employees of covered persons and pertinent government agencies to give statements pertinent to the transaction, person or violation being investigated; and
c. request information, documents and objects from domestic government agencies; foreign states, including its financial intelligence units, law enforcement agencies, and financial regulators; or the United Nations and other international organizations or entities.
Provided, that transaction documents pertaining to specific deposits and investments in banks shall be subject to the provisions on Bank Inquiry.
2. Duty of Covered Persons to Cooperate with AMLC. - Covered persons shall immediately give the authorized personnel of the AMLC Secretariat, full access to all information, documents or objects pertaining to the account, transaction and/or person subject of the investigation.
Certified true copies of the documents pertaining to account, transaction and/or person subject of the investigation shall be submitted within five (5) working days from receipt of the request or order from the AMLC Secretariat.
NON-INTERVENTION IN THE OPERATIONS
OF THE BUREAU OF INTERNAL REVENUE
Rule 20. Non-intervention in the Operations of the Bureau of Internal Revenue. - The AMLC shall not intervene nor participate in any manner in the operations of the Bureau of Internal Revenue.
PROHIBITIONS AGAINST EX POSTFACTO LAWS
AND BILLS OF ATTAINDER
Rule 21. Prohibitions Against Ex Post Facto Laws and Bills of Attainder. - The constitutional injunction against ex post facto laws and bills of attainder shall be respected in the implementation of the AMLA, this RIRR and other AMLC issuances.
Rule 22. Miscellaneous Provisions. -
A. Budget and Appropriations for the AMLC. -
1. Budget. - The annual budget appropriated by Congress for the AMLC in the General Appropriations Act shall be used to defray the capital, maintenance and operational expenses of the AMLC.
2. Costs and Expenses. - The budget shall answer for indemnification for legal costs and expenses reasonably incurred for the services of external counsel in connection with any civil, criminal or administrative action, suit or proceeding to which members of the AMLC, and the Executive Director and other members of the AMLC Secretariat may be made a party by reason of the performance of their functions or duties. The costs and expenses incurred in defending the aforementioned action, suit, or proceeding may be paid by the AMLC in advance of the final disposition of such action, suit or proceeding upon receipt of an undertaking by or on behalf of the member to repay the amount advanced should it be ultimately determined that said member is not entitled to such indemnification.
B. Information Security and Confidentiality. - The AMLC and its Secretariat shall securely protect information received or processed and shall not reveal, in any manner, any information known to them by reason of their office. This prohibition shall apply even after their separation from the AMLC.
The AMLC shall formulate rules governing information exchange and dissemination, the security and confidentiality of such information, including procedures for handling, storage, and protection of, as well as access to such information.
Rule 23. Separability Clause. - If any provision of this RIRR or the application thereof to any person or circumstance is held to be invalid, the other provisions of this RIRR, and the application of such provision or rule to other persons or circumstances, shall not be affected thereby.
Rule 24. Repealing Clause. - All office orders, circulars, rules, regulations and other issuances, or parts thereof, that are inconsistent with this RIRR are hereby repealed, amended or modified accordingly; Provided, that the penal provisions shall not apply to acts done prior to the effectivity of the AMLA on October 17, 2001.
Rule 25. Effectivity. - This RIRR shall take effect fifteen (15) days after publication in the Official Gazette or in a newspaper of general circulation.
The “2016 Revised Implementing Rules and Regulations of Republic Act No. 9160, as Amended” is hereby approved by the ANTI-MONEY LAUNDERING COUNCIL this 21st day of September 2016 in the City of Manila, Philippines.
AMANDO M. TETANGCO, JR.
(Governor, Bangko Sentral ng Pilipinas)
TERESITA J. HERBOSA EMMANUEL F. DOOC
(Chairperson, Securities and Exchange Commission) (Commissioner, Insurance Commission)
Click to view PDF file