Philippines Anti-Money Laundering Act of 2001 – An Overview and Summary of Requirements
The Philippines’ government enacted this anti-money laundering law in 2001 and it defines the crime of money laundering, details penalties for violating these rules and also provides guidelines for financial institutions on how to ensure compliance with the law. The Bangko Sentral ng Pilipinas (BSP) oversees the enforcement of this Act.
1. Requirements for preventing money laundering
Customer Identification
- Covered institutions should establish and record the true identity of its clients based on official documents.
- They should maintain a system of verifying the true identity of their clients
- In case of corporate clients, they should require a system of verifying their
- Legal existence
- Organizational structure
- 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 should be absolutely prohibited.
- Peso and foreign currency non-checking numbered accounts should be allowed.
- The BSP can conduct annual testing to determine the existence and true identity of the owners of such accounts.
Recordkeeping
- All records of all transactions of covered institutions should be maintained and safely stored for 5 years from the dates of transactions.
- With respect to closed accounts, the records on customer identification, account files and business correspondence, should be preserved and safely stored for at least five years from the dates when they were closed.
Reporting of Covered Transactions
- Covered institutions should report to the BSP’s Anti Money Laundering Council (AMLC) all covered transactions within five working days from occurrence.
- When reporting covered transactions to the AMLC, covered institutions and their officers, employees, representatives, agents, advisors, consultants or associates should not communicate, directly or indirectly, to any person the fact that a covered transaction report was made, its contents or any related information.
2. Authority to Freeze – If the AMLC determines that any deposit or similar account is related to unlawful activity, it can issue a freeze order to be effective immediately.
3. Authority to Inquire into Bank Deposits - The AMLC can inquire into or examine any particular deposit or investment with any banking institution or non-bank financial institution upon order of any competent court in cases of violation of this Act
4. Forfeiture Provisions
- Revised Rules of Court on Civil forfeiture should be applied
- The offender should submit a verified petition to declare segregation or exclusion of the legitimate property from the corresponding monetary instrument or property.
- If any particular monetary instrument or property has been altered in value, the convicted offender should pay an amount equal to the said value.
5. Mutual Assistance among States
- AMLC can execute or refuse the request for assistance from a foreign state.
- AMLC has the following powers to act on the request from a foreign state:
- Track down, freeze, restrain and seize assets alleged to be proceeds of any unlawful activity
- Give information needed by the foreign State
- Apply for an order of forfeiture of any monetary instrument or property in the court
- AMLC can obtain assistance from foreign states in all the above.
- The AMLC can refuse request for assistance where it contravenes any provision of the Constitution or the execution of a request is likely to prejudice the national interest of the Philippines.
6. Penal Provisions
Penalties for the Crime of Money Laundering
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Money Laundering Offence
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Penalty
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Any person knowing that any monetary instrument or property represents, involves, or relates to, the proceeds of any unlawful activity, transacts or attempts to transact said monetary instrument or property.
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7-17 years imprisonment
Fine of not less than 3 million Php but not more than twice the value of the monetary instrument or property
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Any person knowing that any monetary instrument or property involves the proceeds of any unlawful activity, performs or fails to perform any act as a result of which he facilitates the offense of money laundering
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4-7 years imprisonment
Fine of not less than 1 million Php but not more than 3 million Php
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Any person knowing that any monetary instrument or property is required under this Act to be disclosed and filed with the Anti-Money Laundering Council (AMLC), fails to do so.
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6 months -4 years imprisonment
Fine of not less than 100,000 Php but not more than 500,000 Php or both
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Penalties for Failure to Keep Records:
- 6 months to 1 year imprisonment
- Fine of not less than 100,000 Php but not more than 500,000 Php or both
Penalties for Malicious Reporting.
- 6 months to 4 years imprisonment
- Fine of not less than 100,000 Php but not more than 500,000 Php
Penalties for Breach of Confidentiality.
- 3-8 years of imprisonment
- Fine of not less than 500,000 Php but not more than 1 million Php
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