XI.

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

IX. ANTI-MONEY LAUNDERING ACT (RA 9160, as amended)

A. Covered institutions and their obligations
B. Covered and suspicious transactions
C. Safe harbor provision
D. When is money laundering committed (including predicate crimes)
E. Authority to inquire into bank deposits
F. Freezing and forfeiture

MONEY LAUNDERING is the process by which money that originates from an illegal source is converted or “cleaned”
to make it appear it comes from a legitimate source
Take note the definition is not found in the law. It is found in the case of Eugenio:
“Money laundering has been generally defined by the International Criminal Police Organization (Interpol) as "any act
or attempted act to conceal or disguise the identity of illegally obtained proceeds so that they appear to have
originated from legitimate sources." 
It is an act or series or combination of acts whereby proceeds of an unlawful activity whether in cash, property or other
assets are converted, concealed or disguised so that they appear to have originated from legitimate sources.

A. Covered institutions and their obligations

SECTION 3. (a)'Covered persons', natural or juridical, refer to:

BISJAC-C
Banks & BSP regulated entities
Insurers & pre-need companies
Securities & investment professionals
Jewelry dealers >1M
Asset managers
Company service providers
Casinos

(1) Banks, non-banks, quasi-banks, trust entities, foreign exchange dealers, pawnshops, money changers, remittance
and transfer companies and other similar entities and all other persons and their subsidiaries and affiliates supervised
or regulated by the Bangko Sentral ng Pilipinas (BSP);

(2) Insurance companies, pre-need companies and all other persons supervised or regulated by the Insurance
Commission (IC); 

(3) (i) securities dealers, brokers, salesmen, investment houses and other similar persons managing securities or
rendering services as investment agent, advisor, or consultant, (ii) mutual funds, close-end investment companies,
common trust funds, and other similar persons, and (iii) other entities administering or otherwise dealing in currency,
commodities or financial derivatives based thereon, valuable objects, cash substitutes and other similar monetary
instruments or property supervised or regulated by the Securities and Exchange Commission (SEC);

Under number 3, these are not your ordinary corporations. Just because you’re a corporation registered with the SEC
does not automatically subject you to the AMLA.
It has to be a financial institution. Those under number 3 are entities holding a secondary license. The primary license
is your certificate of incorporation. The secondary franchise allows you to engage in specific activities. An ordinary
corporation only has 1 franchise. Banks require a secondary franchise. Others such as investment companies also
require secondary license from the SEC

(4) Jewelry dealers in precious metals, who, as a business, trade in precious metals, for transactions in excess of
One million pesos (P1,000,000.00);

(5) Jewelry dealers in precious stones, who, as a business, trade in precious stones, for transactions in excess of One
million pesos (P1,000,000.00);

(6) 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; and

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 XI. ANTI-MONEY LAUNDERING ACT (RA 9160, AS AMENDED)

Formation agents also refer to the promoters who incorporate companies. They are covered persons

(7) Persons who provide any of the following services:

(i) managing of client money, securities or other assets;
(ii) management of bank, savings or securities accounts;
(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, the term 'covered persons' shall exclude lawyers and accountants acting as
independent legal professionals in relation to information concerning their clients or where disclosure of information
would compromise client confidences or the attorney-client relationship: Provided, That these lawyers and
accountants are authorized to practice in the Philippines and shall continue to be subject to the provisions of their
respective codes of conduct and/or professional responsibility or any of its amendments."

Example. Me as a lawyer is asked by a client to provide corporate secretarial services. Am I now a covered person?
Not covered if acting as independent legal professional
However, if you are employed by the company as an internal counsel, you cannot be considered as independent legal
professional. So if you are acting as corporate secretary, or director, you may be considered as covered person

(8) casinos, including internet and ship-based casinos, with respect to their casino cash transactions related to their
gaming operations.

This includes POGOs (Philippine Offshore Gaming Operators)

Significance of being included in the term “covered person”

AMLA has required certain obligations from a covered person

Obligations of a covered institution

SECTION 9. (a) Customer Identification. — Covered institutions shall establish and record the true identity of its
clients based on official documents. They shall maintain a system of verifying the true identity of their clients and, in
case of corporate clients, require a system of verifying their legal existence and organizational structure, as well as the
authority and identification of all persons purporting to act on their behalf. The provisions of existing laws to the
contrary notwithstanding, anonymous accounts, accounts under fictitious names, and all other similar accounts shall
be absolutely prohibited. Peso and foreign currency non-checking numbered accounts shall be allowed. The BSP may
conduct annual testing solely limited to the determination of the existence and true identity of the owners of such
accounts.

(b) Record Keeping. — All records of all transactions of covered institutions shall be maintained and safely stored for
five (5) years from the dates of transactions. With respect to closed accounts, the records on customer identi fication,
account files and business correspondence, shall be preserved and safely stored for at least five (5)years from the
dates when they were closed.

(c) Reporting of Covered and Suspicious Transactions. — Covered persons shall report to the AMLC all covered
transactions and suspicious transactions within five (5) working days from occurrence thereof, unless the AMLC
prescribes a different period not exceeding fifteen (15) working days. (Amendment to R.A. No. 9160 (Anti-Money
Laundering Act of 2001), Republic Act No. 10365, [February 15, 2013])

C. Safe harbor provision

Lawyers and accountants acting as independent legal professionals are not required to report covered and suspicious
transactions if the relevant information was obtained in circumstances where they are subject to professional secrecy
or legal professional privilege. (Amendment to R.A. No. 9160 (Anti-Money Laundering Act of 2001), Republic Act No.
10365, [February 15, 2013])

Should a transaction be determined to be both a covered transaction and a suspicious transaction, the covered
institution shall be required to report the same as a suspicious transaction. (Amendment to R.A. No. 9160 (Anti-Money
Laundering Act of 2001), Republic Act No. 9194, [March 7, 2003])

When reporting covered or suspicious transactions to the AMLC, covered institutions and their officers and employees
shall not be deemed to have violated Republic Act No. 1405, as amended, Republic Act No. 6426, as
amended, Republic Act No. 8791 and other similar laws, but are prohibited from communicating, directly or indirectly,
in any manner or by any means, to any person, the fact that a covered or suspicious transaction report was made, the
contents thereof, or any other information in relation thereto. In case of violation thereof, the concerned officer and

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 XI. ANTI-MONEY LAUNDERING ACT (RA 9160, AS AMENDED)

employee of the covered institution shall be criminally liable. However, no administrative, criminal or civil proceedings,
shall lie against any person for having made a covered or suspicious transaction report in the regular performance of
his duties in good faith, whether or not such reporting results in any criminal prosecution under this  Act or any other
law. (Safe Harbor Provision which is for covered persons) (Amendment to R.A. No. 9160 (Anti-Money Laundering Act
of 2001), Republic Act No. 9194, [March 7, 2003])

"When reporting covered or suspicious transactions to the AMLC, 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, the
media, the fact that a covered or suspicious transaction has been reported or is about to be reported, the contents of
the report, or any other information in relation thereto. Neither may such reporting be published or aired in any manner
or form by the mass media, electronic mail, or other similar devices. In case of violation thereof, the concerned officer
and employee of the covered person and media shall be held criminally liable."(Amendment to R.A. No. 9160 (Anti-
Money Laundering Act of 2001), Republic Act No. 10365, [February 15, 2013])

Customer Identification
This is to ensure that customers are properly identified
The covered person must develop certain procedures so that its customers are identified and known
Banks have a KYC system: Know Your Client – including your name, you salary (filled up when you apply)
Stricter when the customer is a corporation

B. Covered and suspicious transactions

Covered Transaction
SECTION 3. (b)'Covered transaction' is a transaction in cash or other equivalent monetary instrument involving a
total amount in excess of Five hundred thousand pesos (P500,000.00) within one (1) banking day; for covered
persons under Section 3(a)(8), a single casino cash transaction involving an amount in excess of Five million pesos
(P5,000,000.00) or its equivalent in any other currency.

Regardless of the circumstance of the deposit, the covered person is required to report it to the AMLC. It is a
ministerial duty the moment you reach the threshold amount
It is IN EXCESS of Php500,000 within 1 banking day

Suspicious Transaction (SUSU DIC)

SECTION 3. (b-1) 'Suspicious transaction' are transactions with covered institutions, regardless of the amounts
involved, where any of the following circumstances exist:

1. There is no underlying legal or trade obligation, purpose or economic justification;

Example: You opened an account in the bank. Someone deposited 400k in your account. The bank is not required to
report it since it is not a covered transaction.
The following week, somebody deposited another 400k. Still not required.
Next week, another 400k, and so on. It depends now because when the bank sees that there was no basis for anyone
to deposit in your account 4ook every week because you had no contract with that person transferring money, the
bank can actually inquire what the basis is. Is there a contract or sale?
If the bank is satisfied, there is no suspicious transaction. If the bank is not satisfied with your reason, the bank can
report you. You just receive money out of the blue. Bank senses something fishy going on.

2. The client is not properly identified;

3. The amount involved is not commensurate with the business or financial capacity of the client;
Bank will ask you what the source of your income is when you open an account. If you put there your compensation is
20k every month, then 1 day you deposit 450k, and the next day another 450k and so on, it is not commensurate with
your financial capacity
Again, if the bank is not satisfied with your explanation, the bank can report you to the AMLC for suspicious
transaction

4. Taking into account all known circumstances, it may be perceived that the client's transaction is structured in order
to avoid being the subject of reporting requirements under the Act;
When it is a covered transaction, the bank is required to report it. Example you deposited 450k today and another
450k tomorrow, that is a suspicious transaction because you might have received 900k and it would then have been
subject to reporting requirement but you deposited them in two to avoid being considered a covered transaction
So it is not covered but as a mode to avoid, you did it. This could be a suspicious transaction.

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 institution;

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 XI. ANTI-MONEY LAUNDERING ACT (RA 9160, AS AMENDED)

So if you deposit 20k per day the suddenly you’re depositing 300k, or 400k, that is a deviation so the bank will ask you
why you are depositing suddenly a different account
Banks are strict with this. They will really ask you.

6. The transaction is in any way related to an unlawful activity or offense under this Act that is about to be, is being or
has been committed; or SEIDAC

7. Any transaction that is similar or analogous to any of the foregoing.

If a transaction is a covered or suspicious transaction, it does not mean you are already violating the AMLA. There is
nothing wrong being reported because the reporting requirement is automatic when you transact with more than 500k.
However, the AMLC will not automatically charge you with violation of the AMLA.

Since they are not violations, they are only circumstances which would require a covered person to make a report to
the AMLC. These transactions will trigger an obligation on the part of the covered person.

We said before that lawyers and accountants acting in their independent capacity do not fall under the term covered
person. However, the actual interpretation of the BSP is this:
“Lawyers and accountants acting in an independent capacity are considered covered persons as far as the first 2
obligations are concerned.”
So they are still required to set up a system to identify the clients and to retain records of the transaction but they are
not required to report covered or suspicious transactions.

D. Predicate Crimes/Unlawful Activities

Section 3B-1 says when the transaction is in any way related to an unlawful activity or offense under this Act that is
about to be, is being or has been committed, it is required to be reported as suspicious transaction

D HAM PERPEK SSS JQ GF

Drug Offenses
Hijacking, Arson, Murder
Plunder, Piracy
E-Commerce Act Violation, Extorsion
Robbery
Kidnapping for ransom
Swindling, Smuggling, SRC Violation
Jueteng, Qualified Theft
Graft & Corrupt Practices, Similar Foreign Offenses

6F 4C 3M 2T WBC HIV
One person, committed Fraudulent Acts, Forgery, because of the proceeds he was able to buy a Fishpond and a
Forest, but one day he was found on a Fence, dead shot with a Firearm.

A car was Carnapped with a child which was brought to a Cave (Caves Protection Law) which was Child Abused and
Child Porno.

Someone Malversed, bought a Mine and put up an agency for Migrant Workers and OFW.
Terrorism, Terrorism Financing
Wildlife Protection, Bribery and Corruption of Public Officers
Human Trafficking, IP Law violations, Voyeurism (Photo & Video)

SECTION 3. (i) '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, 12, 13, 14, 15, and 16 of Republic Act No. 9165, otherwise known as
the  Comprehensive Dangerous Drugs Act of 2002; (Drug offenses)
Sec 4 – Importation of Dangerous Drugs and/or Controlled Precursors and Essential Chemicals||| 
Sec 5 - Sale, Trading, Administration, Dispensation, Delivery, Distribution and Transportation of Dangerous Drugs
and/or Controlled Precursors and Essential Chemicals||| 
Sec 6 - Maintenance of a Den, Dive or Resort||| 
Sec 8 - Manufacture of Dangerous Drugs and/or Controlled Precursors and Essential Chemicals||| 
Sec 9 - Illegal Chemical Diversion of Controlled Precursors and Essential Chemicals||

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 XI. ANTI-MONEY LAUNDERING ACT (RA 9160, AS AMENDED)

Sec 10 - Manufacture or Delivery of Equipment, Instrument, Apparatus, and Other Paraphernalia for Dangerous Drugs

and/or Controlled Precursors and Essential Chemicals
Sec 12 - Possession of Equipment, Instrument, Apparatus and Other Paraphernalia for Dangerous Drugs|||
Sec 13 - Possession of Dangerous Drugs During Parties, Social Gatherings or Meetings||| 
Sec 14 - Possession of Equipment, Instrument, Apparatus and Other Paraphernalia for Dangerous Drugs During
Parties, Social Gatherings or Meetings|||
Sec 15 - Use of Dangerous Drugs||| 
Sec 16 - Cultivation or Culture of Plants Classified as Dangerous Drugs or are Sources Thereof

So not all offenses under the Dangerous Drugs Act are considered unlawful activities. Only those specified

(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;
Par B - Directly or indirectly requesting or receiving any gift, present, share, percentage, or benefit, for himself or for
any other person, in connection with any contract or transaction between the Government and any other party,
wherein the public officer in his official capacity has to intervene under the law.|||

Par C - Directly or indirectly requesting or receiving any gift, present or other pecuniary or material benefit, for himself
or for another, from any person for whom the public officer, in any manner or capacity, has secured or obtained, or will
secure or obtain, any Government permit or license, in consideration for the help given or to be given, without
prejudice to Section thirteen of this Act|
|| 
Par E - Causing any undue injury to any party, including the Government, or giving any private party any unwarranted
benefits, advantage or preference in the discharge of his official administrative or judicial functions through manifest
partiality, evident bad faith or gross inexcusable negligence. This provision shall apply to officers and employees of
offices or government corporations charged with the grant of licenses or permits or other concessions

Par G - Entering, on behalf of the Government, into any contract or transaction manifestly and grossly
disadvantageous to the same, whether or not the public officer profited or will profit thereby

Par H - Director or indirectly having financing or pecuniary interest in any business, contract or transaction in
connection with which he intervenes or takes part in his official capacity, or in which he is prohibited by the
Constitution or by any law from having any interest

Par I - Directly or indirectly becoming interested, for personal gain, or having a material interest in any transaction or
act requiring the approval of a board, panel or group of which he is a member, and which exercises discretion in such
approval, even if he votes against the same or does not participate in the action of the board, committee, panel or
group

(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;
297 and 298 are not included, which refer to attempted robbery. Only consummated robbery are included because if
it’s just attempted, there is nothing to launder there
Art 294 - Robbery with Violence Against or Intimidation of Persons|
Art 295 - Robbery with Physical Injuries, Committed in an Uninhabited Place and by a Band
Art 296 - Definition of a Band and Penalty Incurred by the Members Thereof
Art 299 - Robbery in an Inhabited House or Public Building or Edifice Devoted to Worship||| 
Art 300 - Robbery in an Uninhabited Place and by a Band|||
Art 301 - What is an Inhabited House, Public Building or Building Dedicated to Religious Worship and Their
Dependencies
Art 302 - Robbery in an Uninhabited Place or in a Private Building|||

(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 of the Revised Penal Code, as amended;

RP vs Glasgow Credit: The crime here was estafa, so that is included under unlawful activities

(10)  Smuggling under Republic Act Nos. 455 and 1937; 

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 XI. ANTI-MONEY LAUNDERING ACT (RA 9160, AS AMENDED)

a. RA 455- Revised Administrative Code

b. RA 1937 – Tariff and Customs Code

(11)  Violations under Republic Act No. 8792, otherwise known as the Electronic Commerce Act of 2000;
All violations of E-Commerce Act are unlawful activities

(12)  Hijacking and other violations under  Republic Act No. 6235; destructive arson and murder, as defined under
the  Revised Penal Code, as amended, including those perpetrated by terrorists against non-combatant persons and
similar targets; 

(13) Terrorism and conspiracy to commit terrorism as defined and penalized under Sections 3 and 4 of Republic Act
No. 9372 or The Human Security Act
(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;
(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;
a. Section 78 – Unlawful occupation or destruction of forest or grazing lands
b. Section 79 – Pasturing livestock

If you pasture livestock land considered as forest land, that is violation of sec 79. Any money that you profit from such
act if you attempt to launder it is a violation of the AMLA

(21) Violations of Sections 86 to 106 of Chapter VI, of Republic Act No. 8550, otherwise known as the Philippine
Fisheries Code of 1998;
a. SECTION 86. Unauthorized Fishing or Engaging in Other Unauthorized Fisheries Activities
b. SECTION 87. Poaching in Philippine Waters|||
c. SECTION 88. Fishing Through Explosives, Noxious or Poisonous Substance, and/or Electricity||| 
d. SECTION 89. Use of Fine Mesh Net||
e. SECTION 90. Use of Active Gear in the Municipal Waters and Bays and Other Fishery Management Areas||| 
f. SECTION 91. Ban on Coral Exploitation and Exportation
g. SECTION 92. Ban on Muro-Ami Other Methods and Gear Destructive to Coral Reefs and Other Marine Habitat
h. SECTION 93. Illegal Use of Superlights
i. SECTION 94. Conversion of Mangroves
j. SECTION 95. Fishing in Overfished Area and During Closed Season||| 
k. SECTION 96. Fishing in Fishery Reserves,  Refuge and Sanctuaries||| 
l. SECTION 97. Fishing Or Taking of Rare, Threatened or Endangered Species
m. SECTION 98. Capture of Sabalo and Other Breeders/Spawners||| 
n. SECTION 99. Exportation of Breeders,  Spawners,  Eggs or Fry||| 
o. SECTION 100. Importation or Exportation of Fish or Fishery Species
p. SECTION 101. Violation of Catch Ceilings||
q. SECTION 102. Aquatic Pollution
r. SECTION 103. Other Violations: failure to comply with minimum safety standards; failure to conduct yearly report on
fishponds; gathering and marketing shell fishes; obstruction to navigation or flow and ebb of tide in any stream, river,
lake or bay; construction and operation of fish corrals/traps, fish pens and fish cages
s. SECTION 104. Commercial Fishing Vessel Operators Employing Unlicensed Fisherfolk or Fishworker or Crew||| 
t. SECTION 105. Obstruction of Defined Migration Paths
u. SECTION 106. Obstruction to Fishery Law Enforcement Officer

(22) Violations of Sections 101 to 107, and 110 of Republic Act No. 7942, otherwise known as the Philippine Mining
Act of 1995;
a. SECTION 101. False Statements||| 
b. SECTION 102. Illegal Exploration
c. SECTION 103. Theft of Minerals||| 
d. SECTION 104. Destruction of Mining Structures||| 
e. SECTION 105. Mines Arson||| 

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 XI. ANTI-MONEY LAUNDERING ACT (RA 9160, AS AMENDED)

f. SECTION 106. Willful Damage to a Mine

g. SECTION 107. Illegal Obstruction to Permittees or Contractors||| 
h. SECTION 110. Other Violations. — Any other violation of this Act and its implementing rules and regulations

(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) Violation of Section 7(b) of Republic Act No. 9072, otherwise known as the National Caves and Cave Resources
Management Protection Act;
Sec 7b - Gathering, collecting, possessing, consuming, selling, bartering or exchanging or offering for sale without
authority any cave resource

(25) Violation of Republic Act No. 6539, otherwise known as the Anti-Carnapping Act of 2002, as amended;

(26) Violations of Sections 1, 3 and 5 of Presidential Decree No. 1866, as amended, otherwise known as the decree
Codifying the Laws on Illegal/Unlawful Possession, Manufacture, Dealing In, Acquisition or Disposition of Firearms,
Ammunition or Explosives;

(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 by Republic Act No. 10022;
Sec 6 – Illegal recruitment

(29) Violation of Republic Act No. 8293, otherwise known as the Intellectual Property Code of the Philippines;
All violations

(30) Violation of Section 4 of Republic Act No. 9995, otherwise known as the Anti-Photo and Video Voyeurism Act of
2009;
Sec 4 – take photo or video coverage; copy or reproduce; sell or distribute; publish or broadcast persons performing
sexual acts

(31) Violation of Section 4 of Republic Act No. 9775, otherwise known as the Anti-Child Pornography Act of 2009;
Sec 4 – Unlawful or prohibited acts (e.g. hire a child to perform pornography; produce or direct; publish or offer;
possess; provide a venue; to lure a child; to conspire to commit any of the unlawful acts)

(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;
a. SECTION 5. Child Prostitution and Other Sexual Abuse
b. SECTION 7. Child Trafficking
c. SECTION 8. Attempt to Commit Child Trafficking||| 
d. SECTION 9. Obscene Publications and Indecent Shows||| 
e. SECTION 10(c). Any person who shall induce, deliver or offer a minor to any one prohibited by this Act to keep or
have in his company a minor||| 
f. SECTION 10(D). Any person, owner, manager or one entrusted with the operation of any public or private place of
accommodation, whether for occupancy, food, drink or otherwise, including residential places, who allows any person
to take along with him to such place or places any minor herein described
g. SECTION 10(E).  Any person who shall use, coerce, force or intimidate a street child or any other child to: beg or
use begging for a living; act as conduit or middlemen in drug trafficking or pushing; conduct any illegal activities
h. SECTION 11. Sanctions for Establishments or Enterprises which Promote, Facilitate, or Conduct Activities
Constituting Child Prostitution and Other Sexual Abuse, Child Trafficking, Obscene Publications and Indecent Shows,
and Other Acts of Abuse||| 
i. SECTION 12. Employment of Children||| 
j. SECTION 14. Prohibition on the Employment of Children in Certain Advertisements||| 

(33) Fraudulent practices and other violations under Republic Act No. 8799, otherwise known as the Securities
Regulation Code of 2000; and

(34) Felonies or offenses of a similar nature that are punishable under the penal laws of other countries.”

If the covered person can determine that the transaction REGARDLESS of amount is related to these unlawful
activities, that will be a suspicious transaction and automatically be reported to the AMLA
Note that tax evasion is not included. This is a weakness of our AMLA.
GR: No money laundering offense when there is no unlawful activity predicate crime.

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 XI. ANTI-MONEY LAUNDERING ACT (RA 9160, AS AMENDED)

EXC: failure to report

D. When is money laundering committed

SECTION. 4. Money Laundering Offense. – Money laundering is committed by any person who, knowing that any
monetary instrument or property represents, involves, or relates to the proceeds of any unlawful activity: (TCC ACFA)
&R
(a) transacts said monetary instrument or property;
(b) converts, transfers, disposes of, moves, acquires, possesses or uses said monetary instrument or property;
(c) conceals or disguises the true nature, source, location, disposition, movement or ownership of or rights with
respect to said monetary instrument or property;
(d) attempts or conspires to commit money laundering offenses referred to in paragraphs (a), (b) or (c);
(e) aids, abets, assists in or counsels the commission of the money laundering offenses referred to in paragraphs (a),
(b) or (c) above; and
(f) performs or fails to perform any act as a result of which he facilitates the offense of money laundering referred to in
paragraphs (a), (b) or (c) above.

Money laundering is also committed by any covered person who, knowing that a covered or suspicious transaction is
required under this Act to be reported to the Anti-Money Laundering Council (AMLC), fails to do so.

Take note that your transaction even if it is a covered or suspicious transaction, that is not an offense. It is only a
money laundering offense if there is KNOWLEDGE that the money is related to an unlawful activity and you attempt to
transact it, convert it, etc.

Also, a covered person who knows of a covered or suspicious transaction but does not do his duty to report it is also
an offense

The covered or suspicious transaction by itself is not a violation. The violation is when there is an unlawful activity and
there are proceeds and you attempt to transact, convert, or possess them (etc.)

SECTION. 6. Prosecution of Money Laundering –

a) Any person may be charged with and convicted of both the offense of money laundering and the unlawful activity as
herein defined.
(b) The prosecution of any offense or violation under this Act shall proceed independently of any proceeding relating
to the unlawful activity.

Prosecution for violation of the AMLA is different from the prosecution of the unlawful activity itself.
You don’t need to be convicted of the unlawful activity before you can be convicted of violation of AMLA
It may be that you are not yet convicted of estafa but you are already convicted of trying to convert the proceeds of
estafa to legitimate funds. Prior conviction is not an element of the crime
Question: Client asks you how to avoid these offenses?
Atty G: You don’t advise them to do anything illegal. If your client did something illegal, it’s your duty as lawyer to
defend him. That’s now a legal ethics question.

E. Authority to inquire into bank deposits

SECTION. 11. Authority to Inquire into Bank Deposits.  – 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, including related accounts, with any banking institution or non-bank
financial institution upon order of any competent court (only Court of Appeals) based on an ex parte  application in
cases of violations of this Act, when it has been established that there is probable cause that the deposits or
investments, including related accounts involved, are related to an unlawful activity as defined in Section 3(i) hereof or
a money laundering offense under Section 4 hereof; except that no court order shall be required in cases involving
activities defined in Section 3(i)(1), (2), and (12) hereof, and felonies or offenses of a nature similar to those
mentioned in Section 3(i)(1), (2), and (12), which are Punishable under the penal laws of other countries, and
terrorism and conspiracy to commit terrorism as defined and penalized under Republic Act No. 9372.

The Court of Appeals shall act on the application to inquire into or examine any deposit or investment with any
banking institution or non-bank financial institution within twenty-four (24) hours from filing of the application . (Anti-
procrastination Clause) To ensure compliance with this Act, the Bangko Sentral ng Pilipinas may, in the course of a
periodic or special examination, check the compliance of a Covered institution with the requirements of the AMLA and
its implementing rules and regulations.

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For purposes of this section, ‘related accounts’ shall refer to accounts, the funds and sources of which originated from
and/or are materially linked to the monetary instrument(s) or property(ies) subject of the freeze order(s).

A court order ex parte  must first be obtained before the AMLC can inquire into these related Accounts: Provided,That
the procedure for the ex parte application of the ex parte court order for the principal account shall be the same with
that of the related accounts."

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, which are hereby incorporated by reference.

CASE: RP vs EUGENIO
Facts:
A series of investigations concerning the award of NAIA 3 contracts to PIATCO were undertaken by the Ombudsman
and AMLC. AMLC issued resolution authorizing the Executive Director of AMLC to sign and verify an application to
inquire into and/or examine the deposits or investments of Alvarez, etc. (the persons involved). AMLC then applied to
inquire into the investments of Alvarez before the RTC which granted it being satisfied of existence of probable cause
that the deposits were related to the offense of violation of Anti-Graft and Corrupt Practices Act.

Ruling:
Still, even if the bank inquiry order may be availed of without need of a pre-existing case under the AMLA, it does not
follow that such order may be availed of ex parte. (This has now been changed by the subsequent amendment of the
law)

Discussion:
The issue here was that they filed an ex parte application but the SC said that is not allowed because the law does not
provide it. It even compared this with the Freeze
After the Eugenio case, Congress amended it. Now, ex parte is allowed with the Court of Appeals.
Probable cause is required that the money is related to an unlawful activity

AMLA does not require a court order at all times: (TT DK Foreign HAM)
Terrorism, Terrorism Financing
Drug offenses
Kidnapping for ransom
Hijacking, Arson, Murder
If the AMLC suspects that the money is related to these, they can look into the accounts by themselves. For the rest of
the unlawful activities, they need a court order and can get it through a verified ex parte petition through the CA

Who may inquire into bank deposits re terrorism?

1. AMLAC re terrorism and conspiracy to commit terrorism as defined in Human Security Act (S11 AMLA)
2. AMLAC re terrorism financing and acts of terrorism. (TFPSA of 2012)
3. Law enforcement officers authorized by CA re bank accounts of terrorists, terrorists orgs, members of terrorist org.
(S27 HSA)

Q. May a court issue ex parte an order authorizing the AMLC to inquire into a deposit or investment under S11 of the
AMLA?
A. No. A court may not issue ex parte a bank inquiry order under S11 of the AMLA. There is nothing in S11 which
states that the bank inquiry order may issue ex parte unlike in S10 which expressly authorizes the Court of Appeals to
issue a freeze order upon ex parte application by the AMLC. Notice of the application for the bank inquiry order and an
opportunity to contest the application should be afforded the depositor or investor. (Republic v. Eugenio, G.R. No.
174629, 14 February 2008, Tinga, J.).
Note: This is no longer ruling case law because of the amendment of S11 of the AMLA by R.A. No. 10167 effective 6
July 2012.

Authority of BSP to check compliance

Q. Does the constitutional prohibition against ex post facto laws apply to bank inquiry orders under S11 of the AMLA?
A. Yes. The passage of the AMLA stripped another layer off the rule on absolute confidentiality that provided a
measure of lawful protection to the account holder. For that reason, the application of the bank inquiry order as a
means of inquiring into records of transactions entered into prior to the effectivity of the AMLA on 17 October 2001
would be constitutionally infirm, offensive as it is to the ex post facto clause. However transactions entered into after
17 October 2001 may be inquired into without inflicting violence upon the ex post facto clause even if the bank
account was opened prior to the effectivity of the AMLA. (Republic v. Eugenio, G.R. No. 174629, 14 February 2008,
Tinga, J.).

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The AMLAC’s authority under §11 to file with the CA an ex parte application for inquiry into bank deposits is not
violative of due process since the AMLAC is not exercising quasi-judicial powers but is simply an investigatory body.
(Subido Law Office v. CA, 6 Dec 2016).

F. Freezing and forfeiture

Freezing
SECTION. 10.  Freezing of Monetary Instrument or Property. — Upon a 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 as defined in Section 3(i) hereof, the Court of Appeals may issue a freeze order which shall be
effective immediately, for a period of twenty (20) days. Within the twenty (20)-day period, the Court of Appeals shall
conduct a summary hearing, with notice to the parties, to determine whether or not to modify or lift the freeze order, or
extend its effectivity. The total period of the freeze order issued by the Court of Appeals under this provision shall not
exceed six (6) months. This is without prejudice to an asset preservation order that the Regional Trial Court having
jurisdiction over the appropriate anti-money laundering case or civil forfeiture case may issue on the same account
depending upon the circumstances of the case, where the Court of Appeals will remand the case and its
records: Provided, That if there is no case filed against a person whose account has been frozen within the period
determined by the Court of Appeals, not exceeding six (6) months, the freeze order shall be deemed ipso
facto lifted: Provided, further, That this new rule shall not apply to pending cases in the courts. In any case, the court
should act on the petition to freeze within twenty-four (24) hours from filing of the petition. If the application is filed a
day before a nonworking day, the computation of the twenty-four (24)-hour period shall exclude the nonworking days.

The freeze order or asset preservation order issued under this Act shall be limited only to the amount of cash or
monetary instrument or value of property that the court finds there is probable cause to be considered as proceeds of
a predicate offense, and the freeze order or asset preservation order shall not apply to amounts in the same account
in excess of the amount or value of the proceeds of the predicate offense.(An Act Designating Casinos as Covered
Persons Under Republic Act No. 9160, as Amended, Republic Act No. 10927, [July 14, 2017])

No court shall issue a temporary restraining order or a writ of injunction against any freeze order, except the Supreme
Court.(Amendment to R.A. No. 9160 (Anti-Money Laundering Act of 2001), Republic Act No. 10365, [February 15,
2013])

AMLC will file an ex parte petition for issuance of freeze order with the CA
Account holder need not be notified
If CA finds there is probable cause that the money subject of the petition is related to an unlawful activity, then the CA
will issue the freeze order
Effect: You cannot withdraw since the account is “frozen”

The CA’s resolution, extending the freeze order over the Ligots’ various bank accounts and personal properties "until
after all the appropriate proceedings and/or investigations being conducted are terminated” violates Ligot’s
constitutionally-protected right not to be deprived of his property without due process of law, as well as to be
presumed innocent until proven guilty. (Ligot v Republic, 6 March 2013).

AMLAC’s authority to freeze under RA 10168 (Terrorism Financing Prevention & Suppression Act)
Upon its own initiative, or at the ATC’s request, the AMLC may issue an ex parte order to freeze without delay
property or funds:
(a) related in any way to TF or terrorism; or
(b) of any person, group of persons, terrorist organization, or association, in relation to whom there is probable
cause to believe that they are committing or attempting or conspiring to commit, or participating in or
facilitating the commission of financing of terrorism or acts of terrorism.

The freeze order shall be effective for a period not exceeding 20 days, but may be extended for up to 6 months by the
CA.

The 20-day period shall be tolled upon the filing of a petition to extend the effectivity of the freeze order. (S11 RA
10168)

Forfeiture
SECTION 12. (a) Civil Forfeiture.  – Upon determination by the AMLC that probable cause exists that any monetary
instrument or property is in any way related to an unlawful activity as defined in Section 3(i) or a money laundering
offense under Section 4 hereof, the AMLC shall file with the appropriate court through the Office of the Solicitor
General, a verified ex parte  petition for forfeiture, and the Rules of Court on Civil Forfeiture shall apply.
The forfeiture shall include those other monetary instrument or property having an equivalent value to that of the
monetary instrument or property found to be related in any way to an unlawful activity or a money laundering offense,

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when with due diligence, the former cannot be located, or it has been substantially altered, destroyed, diminished in
value or otherwise rendered worthless by any act or omission, or it has been concealed, removed, converted, or
otherwise transferred, 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 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.

(b) 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 defined under Section 4 of this Act, 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
executor. This provision shall apply in both civil and criminal forfeiture.

(c) 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 defined under Section 4, 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.”
Money will be forfeited in favor of the government if there is probable cause that the money is related to an unlawful
activity

CASE: RP vs. GLASGOW

Facts:
Republic filed a complaint in the RTC for civil forfeiture of assets against the bank deposits in the account maintained
by Glasgow. It opposed the motion to dismiss of Glasgow and asserted prior conviction for unlawful activity is not a
precondition to the filing of a civil forfeiture case.
Ruling:
The Court agrees with the Republic. Whether or not there is truth in the allegation that account no. CA-005-10-
000121-5 contains the proceeds of unlawful activities is an evidentiary matter that may be proven during trial. The
complaint, however, did not even have to show or allege that Glasgow had been implicated in a conviction for, or the
commission of, the unlawful activities of estafa and violation of the Securities Regulation Code.

A criminal conviction for an unlawful activity is not a prerequisite for the institution of a civil forfeiture proceeding.
Stated otherwise, a finding of guilt for an unlawful activity is not an essential element of civil forfeiture.

Discussion:
Conviction is not necessary for there to be forfeiture. It is actually a penalty but the SC said no need for conviction
If you recall discussion on Bank Secrecy Law, when a covered institution makes a report under Sec 9, it is exempt
from the Bank Secrecy Law and the Foreign Currency Deposit Act. When AMLC makes an inquiry under Sec 11, it is
again exempt.

Take note also that even if it is not a breach of the Bank Secrecy Law, the covered person cannot disclose the fact
that he has made a report to any other person because such disclosure is a breach of confidentiality which is
penalized under Sec 14 of AMLA. If you make a malicious report, just to harass somebody, that is penalized under
Sec 14

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