The Anti-Money Laundering Act of 2001

7/31/2019 The Anti-Money Laundering Act of 2001

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THE AMLA AMENDMENTS ACT(R.A. No. 10167 ent it led, An Act t o Fur t her

St rengt hen the Ant i-Money Laundering Law ,Amending f or t he Pur pose Sect ions 10 and

11 of Republic Act No. 9160, otherw iseknow n as t he Ant i-Money Laundering Act of2001 , as amended, and for ot her Pur poses)


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Specially f or t he

Global Associat ion of Risk Prof essionals

22 August 2012

15 t h Floor, SGV Bui ld ing6760 Ayala Avenue, Makat i Cit y


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The AMLA, as amended:

R.A. No. 9160

- took effect on 17 October 2001

R.A. No. 9194

- took effect on 23 March 2003

R.A. No. 10167 (An Act to Further Strengthen the Anti-Money Laundering Law, Amending for the PurposeSections 10 and 11 of Republic Act No. 9160, otherwiseknown as the Anti-Money Laundering Act of 2001, asamended, and for other Purposes)

- took effect on 06 July 2012


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I . Reasons w hy R.A. No. 10167 w as passed

Financial Action Task Force (FATF) Statementson the Philippines dated 22 October 2010, 25February 2011, 24 June 2011, 28 October2011 and 16 February 2012

enhance financial transparency. ensure capacity for competent authorities.

FATF-approved Philippine Action Plan

conduct ex parte bank inquiry.

Republic vs. Eugenio (G.R. No. 174629, 14February 2008)


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I I . Salient Feat ures of R.A. No. 10167

A. PETI TI ON FOR FREEZE ORDER(Sec. 10 of t he AMLA, as amended)

Ex parte petition by the AMLC should beverified.The Court of Appeals should act on thepetition within 24 hours from filing.24-hour periods computation shall exclude thenonworking day.Motion to lift freeze order may be filed.CA must resolve the motion before theexpiration of the 20-day original freeze order.Only the Supreme Court shall issue a TRO or awrit of injunction against any freeze order.


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Aut hori t y t o fr eeze under R.A. No. 10168(The Terror ism Financing Prevent ion andSuppression Act of 2012)

1. Upon its own initiative, or at the ATCs request, the

AMLC may issue an ex parte order to freeze w ithout delayproperty or funds:

(a) related in any way to TF or terrorism; or

(b) of any person, group of persons, terroristorganization, or association, in relation to whom thereis probable cause to believe that they are committing orattempting or conspiring to commit, or participating inor facilitating the commission of financing of terrorismor acts of terrorism.


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The Freeze Order

shall be effective for a period not exceeding20 days, but may be extended for up to 6months by the CA;

20-day period shall be tolled upon the filingof a petition to extend the effectivity of thefreeze order.


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2. Consistent with the Philippines internationalobligations, issue a freeze order with respect toproperty or funds of a designated organization,association, group or any individual to comply withbinding terrorism-related UNSC Resolutions.

The Freeze Order

shall be effective until the basis for the issuancethereof shall have been lifted.

Principle of Effective Judicial Protection

-within 20 days from issuance of the freeze order,an aggrieved party may file with the CA apetition to determine the basis of the freeze order.


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Failur e t o Com ply w it h t he AMLCs FreezeOrder ( Sec. 16 , R.A. No. 10168)

Elements:

(1) There is a freeze order issued by the AMLCwhich is received by the coveredinstitution/relevant government agency;

(2) The covered institution/relevant government

agency does not comply with such freeze orderby failing immediately to preserve the subjectproperty or funds and to forthwith serve a copyof the notice of the freeze order upon theowner or holder of the property or funds.


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Penalty:

(1) imprisonment and fine-imprisonment from 6 months to 4 years, anda fine of not less than Php100,000 normore than Php500,000 at the discretion of thecourt;

(2) administrative sanctions on the erringcovered institution.


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Old Provision New Provision

Prior notice Ex parte Ex parte

Form No need for verification Verified petitionWhere to file CA CAPeriod withinwhich the CAshould act onpetition

No provision Within 24 hours from filing of the petition Nonworking day excluded from the

computation

Period of freezeorder

20 days unless extendedby the CA

20 days unless extended by the CA

Remedy of accountholder

No provision Accountholder may file a motion to lift thefreeze order which should be resolved by theCA before the expiration of the 20-day originalfreeze order

Prohibition onTRO

No provision Only the SC can issue a TRO/writ of injunctionagainst any freeze order.

Freeze of otheraccounts

No provision in the law,but related web of accounts may be frozenby the court (as per theRIRRs) in the samepetition for the freeze of the principal and

identified accounts.

Related web of accounts are now referred toas related accounts but defined under Section11 (Authority to inquire into bank deposits).

Compari son of t he AMLAs old and new provi sions on f reeze


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B. APPLI CATI ON FOR BANK I NQUI RY( Sec. 11 of t he AMLA, as amended)

Ex parte application for inquiry into bank depositsor investments, including related accounts, by the

AMLC with the CA (used to be with the RTC).

CA shall act on the application within 24 hoursfrom filing.

Inclusion of nonworking days in thecomputation of the 24-hour period.


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The term related accounts is defined.

Court order ex parte is necessary before the AMLCcan inquire into related accounts. The procedurefor the ex parte application of (for) a court orderfor the principal account/s shall be similar to thatof the related accounts.

The authority to inquire into the mainaccount/s and the related accounts shallcomply with the requirements of Article III,Sections 2 (search warrant) and 3 (privacy of communication and correspondence) of the1987 Constitution.

Related accounts may be frozen.


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No court order authorizing inquiry is required in

cases involving: kidnapping for ransom, a narcotics offense

and hijacking, destructive arson and murder,and felonies or offenses of a nature similar tothe aforesaid which are punishable under the

penal laws of other countries; terrorism and conspiracy to commit terrorism

as defined and penalized under the HumanSecurity Act (HSA) of 2007;

terrorism financing and organizing anddirecting others to commit terrorism financing(Section 4 of the Terrorism FinancingPrevention and Suppression Act of 2012 [R.A.No. 10168]), including being anaccomplice/accessory to TF (Section 6 and 7,R.A. No. 10168)


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attempt and conspiracy to commit the

financing terrorism (Section 5, RA No. 10168),including being an accomplice to conspiracy tocommit terrorism financing (Section 6, R.A.No. 10168);

attempt and conspiracy to commit dealingwith property or funds of designated persons(Section 5, R.A. No. 10168);


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BSP may check the compliance of a coveredinstitution with the requirements of the AMLA and itsIRRs.

Its authority to inquire into any bank depositor investment was replaced with the

authority to check compliance of a coveredinstitution with the AML and IRR requirements.

The authority to check compliance is broader.


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Aut horit y t o inquir e under R.A. No. 10168(The Terrorism Financing Prevention andSuppression Act)

Upon its own initiative, or at the ATCs request, the AMLCmay invest igate any propert y or funds :

(a) related to terrorism financing or acts of terrorism;

(b) of any person or persons in relation to whomthere is probable cause to believe that suchperson or persons are committing or attempting orconspiring to commit or participating in orfacilitating terrorism financing or acts of terrorism.

For this purpose, the AMLC is authorized to inquire intoor examine deposits and investments with any bankinginstitution or non-bank financial institution and theirsubsidiaries and affiliates without a court order.( Section 10, R.A. No. 10168)


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Compari son of t he AMLAs old and new

provisions on bank inquir yOld Provision New ProvisionNotice toaccountholder

De parte (as per Republic vs.Eugenio)

Ex parte

Cases where courtorder is notrequired

Kidnapping for ransom, anarcotics offense andhijacking, destructive arsonand murder

(1) kidnapping for ransom, a narcoticsoffense and hijacking, destructive arsonand murder, and felonies or offenses of anature similar to the aforesaid which arepunishable under the penal laws of othercountries; and(2) terrorism and conspiracy to committerrorism as defined and penalized underthe Human Security Act (HSA) of 2007.

Period within whichthe CA should act onpetition

No provision Within 24 hours from filing of the petition Nonworking day included in the

computation


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Power of BSP BSP may inquire into orexamine any deposit orinvestment with any banking

institution or non-bankfinancial institution when theexamination is made in thecourse of a periodic or specialexamination, in accordancewith the rules of examinationof the BSP.

BSP may check compliance of a CI with therequirements of the AMLA and its IRRs inthe course of a periodic or special

examination.

Inquiry into related

accounts

No provision, but in practice,

AMLC is allowed by courts toinquire into related web of accounts in the ordergranting the application forbank inquiry on the principalaccounts.

AMLC authorized to inquire into related

accounts.

Related accounts may only be inquiredinto in a separate application and afterorder granting the inquiry is obtained.Related accounts should therefore beidentified and specified in a separateapplication.

Related accounts was defined underSection 11 (Authority to inquire into bankdeposits)

The procedure for application for an ex parte order for bank inquiry for the

principal account shall be the same withthat of the related accounts.


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Protection under

the Bill of Rights

No provision, but the Bill of

Rights (Article III, Sections 2and 3 of the 1987 PhilippineConstitution) is deemedincorporated in the provision.

The authority to inquire/examine shall

comply with the provisions of theConstitution on search and seizure andarrest and privacy of communication andcorrespondence.


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I I I . Reasons w hy t he pending AMLAAmendment s Part I I ( House BillNo. 4275 and Senate Bill No .3123) must be passed

The 1988 United Nations Convention Against IllicitTraffic in Narcotic Drugs and PsychotropicSubstances (1988 Vienna Convention);The 2000 United Nations Convention againstTransnational Organized Crime and the ProtocolsThereto (2000 Palermo Convention);


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FATF Statements on the Philippines dated 22October 2010, 25 February 2011, 24 June 2011,28 October 2011, 16 February 2012, and 22 June2012:

Take additional measures to adequately

criminalize ML; Further expand provisions regardingconfiscation of funds related to moneylaundering;

Extend the coverage of reporting entities.


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The Anti-Money Laundering Act of 2001

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