REPUBLIC ACT NO.

9160
AN ACT DEFINING THE CRIME OF MONEY LAUNDERING,
PROVIDING PENALTIES THEREFOR AND FOR OTHER
PURPOSES

“Anti-Money Laundering Act of 2001”

1. PURPOSE, POLICIES AND PROCEDURES

Section 1. Title and Purposes.

1.1. This set of rules and regulations shall be known as the “2018 Implementing
Rules and Regulations” (IRR) of the AMLA.

1.2. This IRR was promulgated to provide the details of implementation of the
AMLA, as well as to assist all covered persons, supervising authorities, law
enforcement and other government agencies, and other stakeholders by
prescribing the rules and regulations to combat money laundering, terrorism
financing being a predicate offense to money laundering, and other
associated unlawful activities.

Section 2. State Policies on AML/CTF.

The provisions of this IRR are in line with the following State Policies:
(a) To protect and preserve the integrity of the Philippine financial system,
including the confidentiality of bank accounts.

Reviewer: Atty. Ivan Yannick S. Bagayao CPA, MBA

 (b) To ensure that the Philippines shall not be used as a money laundering site
for the proceeds of any unlawful activity.

(c) To extend cooperation, consistent with Philippines’ foreign policy, in

transnational investigations and prosecutions of persons involved in money
laundering activities wherever committed.

(d) To protect life, liberty and property from acts of terrorism and to condemn
terrorism and those who support and finance it; and to recognize it as
inimical and dangerous to national security and the welfare of the people;
and to make the financing of terrorism a crime against the Filipino people,
against humanity and against the law of nations.
(e) To recognize and to adhere to international commitments to combat the
financing of terrorism, specifically to the International Convention for the
Suppression of the Financing of Terrorism, as well as other binding
terrorism related resolutions of the United Nations Security Council,
pursuant to Chapter 7 of the United Nations Charter.

(f) To reinforce the fight against terrorism by preventing and suppressing the
commission of said offenses through freezing and forfeiture of property or
funds while protecting human rights.

Section 3. Governing Principles

The anti-money laundering/counter-terrorism financing (AML/CTF) regime of the
Philippines shall be governed by the following principles:
(a) The AMLC, as the country’s financial intelligence unit, is vested by law with
independence to perform its mandate. It upholds the continuous
development of a team of highly ethical and professional personnel and
implements efficient processes in the delivery of its mandate.

Reviewer: Atty. Ivan Yannick S. Bagayao CPA, MBA

 (b) The AML/CTF laws, rules and regulations and other relevant issuances are
implemented using a risk-based approach in a way that responds to the
need to bring the financially excluded into the regulated financial sector,
while at the same time maintaining effective safeguards and effective
controls against money laundering/terrorism financing risks.

(c) A strong compliance culture, good governance and observance of high

ethical standards in the conduct of business are good foundations for an
effective AML/CTF regime. It will be developed and sustained through
capacity building and deterrence of violations through imposition of
appropriate, proportionate and dissuasive sanctions.
(d) A sound risk management system to identify, assess, mitigate, monitor, and
control risks associated with money laundering/terrorism financing is
essential.

(e) Timely and effective domestic and international cooperation and

established coordination mechanism are critical in the investigation and
prosecution of money laundering/terrorism financing and associated
unlawful activities.

(f) The implementation of AML laws, rules and regulations shall conform to
international AML/CTF standards and best practices.

(g) The observance of the constitutional requirements on due process, and

injunction against ex post facto laws and bills of attainder.

2. DEFINITION OF TERMS

Section 1. Definitions.
For purposes of this IRR, the following terms are hereby defined as follows:

Reviewer: Atty. Ivan Yannick S. Bagayao CPA, MBA

 “Account” refers to a bank account, electronic money account, investment
account, insurance policy, membership account, and other similar contract or
service agreement, business or professional relationships between a covered
person and its customers where funds or any monetary instrument of the latter are
held by the former.

“Anti-Money Laundering Act” (AMLA) refers to Republic Act No. 9160, as

amended by Republic Act No. 9194, 10167, 10365, and 10927.

“Anti-Money Laundering Council” (AMLC) refers to the Philippines’ central

AML/CTF authority and financial intelligence unit, which is the government
instrumentality mandated to implement the AMLA and TFPSA. It also refers to the
official name of the Council, which is the governing body of the said government
agency. For purposes of this IRR, the government agency shall be referred
hereafter as the “AMLC”, while the governing body shall be referred hereafter as
the “Council”.

“Appropriate Government Agency” (AGA) refers to the Philippine Amusement

and Gaming Corporation (PAGCOR), Cagayan Economic Zone Authority (CEZA),
Aurora Pacific Economic Zone and Freeport Authority (APECO), or other
government agency, as may be determined by law, which may authorize casinos
to engage in gaming operations.

“Asset” refers to a monetary instrument, property, or both.

“Asset Preservation Order” (APO) refers to a provisional remedy aimed at

preserving monetary instruments or properties in any way related to an unlawful
activity or money laundering offense defined herein, during the pendency of civil
forfeiture proceedings.

Reviewer: Atty. Ivan Yannick S. Bagayao CPA, MBA

 “Average Due Diligence” (ADD) refers to the normal level of customer due
diligence that is appropriate in cases where there is medium risk of money
laundering or terrorism financing.

“Bangko Sentral ng Pilipinas” (BSP) refers to the central bank of the Republic of
the Philippines established pursuant to the provisions of the 1987 Constitution and
Republic Act No. 7653.

“Bank Inquiry” (BI) refers to a provisional remedy that allows the AMLC to
examine or inquire into particular bank accounts or investment with a bank or non-
bank financial institution, notwithstanding the provisions of Republic Act No. 1405,
as amended; Republic Act No. 6426, as amended; Republic Act No. 8791; and
other bank secrecy laws.

“Bearer Negotiable Instruments” (BNIs) refers to monetary instruments in bearer

form such as, traveler’s checks; negotiable instruments, including checks,
promissory notes and money orders, that are either in bearer form, endorsed
without restriction, made out to a fictitious payee, or otherwise in such form that
title thereto passes upon delivery; and incomplete instruments, including checks,
promissory notes and money orders, signed, but with the payee’s name omitted.

“Bearer Shares” refers to negotiable instruments that accord ownership in a

juridical person to the person who possesses the bearer share certificate.

“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;

(2) Has ultimate effective control over a juridical person or legal arrangement;
or

Reviewer: Atty. Ivan Yannick S. Bagayao CPA, MBA

 (3) Owns, at least, twenty percent (20%) shares, contributions or equity interest
in a juridical person or legal arrangement. Control includes whether the
control is exerted by means of trusts, agreements, arrangements,
understandings, or practices, and whether or not the individual can exercise
control through making decisions about financial and operating policies.

“Beneficial Ownership Verification” (BOV) is the process of taking reasonable

measures to identify and verify the beneficial owner, including the determination of
the true nature of the beneficial owner’s capacities and duties vis-à-vis his agent,
nominee or trustee.
“Beneficiary” refers to:
(1) General: any person for whose benefit an account was created or a
transaction was made.

(2) For trust agreements: any person for whose benefit the trust has been
created.

(3) For life insurance or investment-linked insurance policies: any person who
will be paid the policy proceeds.

(4) For wire transfers: refers to a person or legal arrangement who is identified
by the originator as the receiver of the requested wire transfer.

“Beneficiary Financial Institution” refers to the financial institution, which

receives the wire transfer from the originating/ordering financial institution, directly
or through an intermediary financial institution, and makes the funds available to
the beneficiary.

“Biometric Information” refers to a front facing photograph, fingerprint, iris scan,

and/or such other unique identifiable features of an individual.

Reviewer: Atty. Ivan Yannick S. Bagayao CPA, MBA

 “Casino” refers to a business authorized by the appropriate government agency
to engage in gaming operations.

“Casino Cash Transaction” refers to transactions involving the receipt of cash by

a casino paid by or on behalf of a customer; or transactions involving the payout
of cash by a casino to a customer or to any person on his behalf.

“Civil Forfeiture” (CF) refers to the non-conviction-based proceedings aimed at

forfeiting, in favor of the government, monetary instruments or properties related
to an unlawful activity or money laundering offense defined herein.
“Close Relationship/Associate” refers to persons who are widely and publicly
known, socially or professionally, to maintain a particularly close relationship with
the PEP, and include persons who are in a position to conduct substantial domestic
and international financial transactions on behalf of the PEP.

“Correspondent Banking” refers to the provision of banking services by one

bank, called the correspondent bank, to another bank, called the respondent bank.

“Company Service Provider” (CSP) refers to a person engaged in the business

of providing the following services for customers, who need to perform or offer a
service or activity, but are not capable of doing or do not want to do so directly due
to financial or operational reasons, or business judgment:
(1) acting as a formation agent of juridical persons;

(2) 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;

(3) providing a registered office; business address or accommodation,

correspondence or administrative address for a company, a partnership or
any other juridical person or legal arrangement; and

Reviewer: Atty. Ivan Yannick S. Bagayao CPA, MBA

 (4) acting as (or arranging for another person to act as) a nominee shareholder
for another person.

“Cover Payment” refers to a wire transfer that combines a payment message sent
directly by the originating/ordering financial institution to the beneficiary financial
institution with the routing of the funding instruction, called the cover, from the
originating/ordering financial institution to the beneficiary financial institution
through one or more intermediary financial institutions.

“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 with or involving jewelry dealers, dealers in precious metals

and dealers in precious stones in cash or other equivalent monetary
instrument exceeding One Million pesos (Php1,000,000.00).

(3) A casino cash transaction exceeding Five Million Pesos (PHP5,000,000.00)

or its equivalent in other currency.

“Covered Transaction Report” (CTR) refers to a report on a covered transaction,

as herein defined, filed by a covered person before the AMLC.

“Cross-Border Wire Transfer” refers to any wire transfer where the originating
and/or beneficiary financial institutions are located in different countries. It shall
also refer to any chain of wire transfers in which, at least, one of the financial
institutions involved is located in a different country.

“Customer/Client” refers to any person who keeps or maintains an account, or

otherwise transacts business with a covered person. It includes the following:

Reviewer: Atty. Ivan Yannick S. Bagayao CPA, MBA

 (1) Beneficial owner, or any natural person who ultimately owns or controls a
customer and/or on whose behalf an account is maintained or a transaction
is conducted;

(2) Transactors, agents and other authorized representatives of beneficial

owners;

(3) Beneficiaries of trusts, investment and pension funds, insurance policies,

and remittance transactions;

(4) Persons whose assets are managed by an asset manager;

(5) Trustors/grantors/settlors of a trust; and

(6) Insurance policy holders, whether actual or prospective.

“Customer Due Diligence” (CDD) refers to the procedure of identifying and

verifying the true identity of customers, and their agents and beneficial owners,
including understanding and monitoring of their transactions and activities.

“Customer Identification Process” (CIP) refers to the process of determining the

identity of the customer vis-à-vis the valid and acceptable identification document
submitted to, and/or presented before, the covered person.

“Customer Verification Process” (CVP) refers to the process of validating the

truthfulness of the information, and confirming the authenticity of the identification
documents, presented, submitted and provided by the customer; or other ways of
verifying the identity and assessing the risk profile of customers, and their agents
and beneficial owners, through the use of reliable and independent sources,
documents, data or information.

Reviewer: Atty. Ivan Yannick S. Bagayao CPA, MBA

 “Dealer in Precious Metals and Stones/Jewelry 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.

“Designated Non-Financial Businesses and Professions” (DNFBP) refer to

businesses and professions, which are not under the supervision or regulation of
the BSP, SEC and IC, and designated as covered persons under the AMLA.
“Determination of the Purpose of Relationship” (DPR) refers to the process of
identifying the purpose and intended nature of the account, transaction, or
business or professional relationship.

“Domestic Wire Transfer” refers to any wire transfer where the originating and
beneficiary financial institutions are located in the same country. It shall refer to
any chain of wire transfers that takes place entirely within the borders of a single
country, even though the system used to transfer the payment message may be
located in another country.

“Demographic Data” refers to a person’s full name, sex, date and place of birth,
address, citizenship or nationality, and such other personal information from which
the identity of a person can be ascertained.

“Enhanced Due Diligence” (EDD) refers to the enhanced level of scrutiny

intended to provide a more comprehensive understanding of the risks associated
with the client, as well as confirmation of factual information provided by the client,
to mitigate risks presented.

“Financial Intelligence” refers to the gathering and analysis of information about

the transactions and financial activities of persons of interest, to understand their

Reviewer: Atty. Ivan Yannick S. Bagayao CPA, MBA

 nature and capabilities, and predict their future actions. It may also refer to
intelligence information, which is the result of the analysis of the information
gathered.

“Financial Intelligence Unit” (FIU) refers to the national center for the receipt and
analysis of: (a) suspicious transaction reports; and (b) other information relevant
to ML/TF and associated unlawful activities, and for the dissemination of the results
of that analysis.

“Financial Investigation” refers to an inquiry into the financial affairs of persons

related to ML/TF and associated unlawful activity, with a view to:
(1) identifying the extent of criminal networks and/or the scale of criminality;

(2) identifying and tracing the proceeds and instrumentalities of crime, terrorism
funds or any other assets that are, or may become, subject to forfeiture
proceedings; and

(3) developing and/or gathering of evidence which can be used in litigation of

cases.

“Freeze Order” (FO) refers to a provisional remedy aimed at blocking or restraining

monetary instruments or properties in any way related to an unlawful activity, as
herein defined, from being transacted, withdrawn, deposited, transferred,
removed, converted, concealed, or otherwise moved or disposed without affecting
the ownership thereof.

“Gaming Operations” refers to games of chance and variations thereof offered by

casinos, and approved by the AGA under their enabling laws and other applicable
issuances. It shall exclude: (1) Traditional bingo operations authorized by the AGA;
(2) Lotteries and sweepstakes of the Philippine Charity Sweepstakes Office; and

Reviewer: Atty. Ivan Yannick S. Bagayao CPA, MBA

 (3) Such other games of chance and variations as may be declared exempt by the
AGA based on the result of their risk assessment, in consultation with AMLC.

“Identification and Verification of Agents” (IVA) refers to the process of

establishing and recording the true and full identity and existence of an agent,
nominee, trustee or other authorized representatives who is acting as an account
holder or transactor, and other person who is acting in behalf of a beneficial owner
or principal, including verifying the validity of the authority of the agent, nominee,
trustee, or authorized representative.

“Identification Data” refers to both the identification information and identification

document, as herein defined.
“Identification Document” (ID) refers to any of the following evidence of identity:
(1) For Filipino citizens: Those issued by any of the following official authorities:
(a) PhilID;

(b) Other identification documents issued by the Government of the

Republic of the Philippines, including its political subdivisions,
agencies, and instrumentalities; and

(c) Other identification documents that can be verified using reliable,

independent source documents, data or information.

(2) For foreign nationals:

(a) PhilID, for resident aliens;

(b) Passport;

(c) Alien Certificate of Registration; and

Reviewer: Atty. Ivan Yannick S. Bagayao CPA, MBA

 (d) Other identification documents issued by the Government of the
Republic of the Philippines, including its political subdivisions,
agencies, and instrumentalities.

(3) For Filipino students:

(a) PhilID;

(b) School ID signed by the school principal or head of the educational

institution; and

(c) Birth Certificate issued by the Philippine Statistics Authority; 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.

“Identification Information/Personal Information” refers to the demographic

data and biometric information of a natural person, or information about a juridical
person or legal arrangement, from which the identity of a person is apparent or can
be reasonably and directly ascertained by the person holding the information, or
when put together with other information would directly and certainly identify a
person.

“Immediate Family Member” refers to individuals related to the PEP within the
second degree of consanguinity or affinity.

“Independent Legal/Accounting Professional” refers to lawyers/accountants

working in a private firm or as a sole practitioner who, by way of business or
occupation, provides purely legal or accounting services to their clients.
“Information and Communication Technology” (ICT) refers to the totality of
electronic means to access, create, collect, store, process, receive, transmit,
present and disseminate information.

Reviewer: Atty. Ivan Yannick S. Bagayao CPA, MBA

 “Institutional Risk Assessment” refers to a comprehensive exercise to identify,
assess and understand a covered person’s ML/TF threats, vulnerabilities and the
consequential risks, with a view to mitigate illicit flow of funds and transactions.

“Instrumentality” refers to any monetary instrument or property used to finance,

operate, and/or maintain an unlawful activity. This definition is in relation to
“monetary instrument or property related to unlawful activity”.

“Insurance Commission” (IC) refers to the Philippines’ regulator of the insurance

and pre-need industries.

“Intermediary Financial Institution” refers to a financial institution in a serial

payment or cover payment chain that receives and transmits a wire transfer on
behalf of the ordering financial institution and the beneficiary financial institution,
or another intermediary financial institution.

“Internet-Based Casino” refers to casinos in which persons participate by the use

of remote communication facilities such as, but not limited to, internet, telephone,
television, radio or any other kind of electronic or other technology for facilitating
communication.

“Jewel” refers to organic substances that have a market-recognized gem level of

quality, beauty and rarity, such as pearl, amber and coral.

“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.

“Law Enforcement Agency” (LEA) refers to the Philippine National Police,

National Bureau of Investigation, and other government agencies that are

Reviewer: Atty. Ivan Yannick S. Bagayao CPA, MBA

 responsible for the prevention, investigation, apprehension, and/or detention of
individuals suspected of, or convicted for, violations of criminal laws.

“Materially-linked Accounts” refer to:

(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;

(5) All accounts of juridical persons or legal arrangements that are owned,
controlled or ultimately effectively controlled by the natural person whose
accounts, monetary instruments or properties are subject of the freeze order
or order of inquiry, or where the latter has ultimate effective control; and

(6) All other accounts, shares, units, or monetary instruments that are similar,
analogous, or identical to any of the foregoing.

“Monetary Instrument” refers, but is not limited, to the following:

(1) Coins or currency of legal tender of the Philippines, or of any other country;

Reviewer: Atty. Ivan Yannick S. Bagayao CPA, MBA

 (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,

preneed 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.

“Monetary Instrument or Property Related to an Unlawful Activity” refers to:

(1) All proceeds of an unlawful activity;

(2) All instrumentalities of an unlawful activity, including all moneys,

expenditures, payments, disbursements, costs, outlays, charges, accounts,
refunds, and other similar items for the financing, operations, and
maintenance of any unlawful activity;

Reviewer: Atty. Ivan Yannick S. Bagayao CPA, MBA

 (3) All monetary instruments or property, including monetary, financial or
economic means, devices, accounts, documents, papers, items, objects or
things, used in or having any relation to any unlawful activity or money
laundering, regardless of the current owner or possessor, and
circumstances of ownership or acquisition; and (4) For purposes of freeze
order and bank inquiry order: related and materially linked accounts.

“Money Laundering” (ML) refers to the crime defined under Section 4 of the
AMLA.

“Money Laundering/Terrorism Financing Prevention Program” (MTPP) refers

to a covered person’s comprehensive, risk-based, and written internal policies,
controls and procedures to implement the relevant laws, rules and regulations, and
best practices to prevent and combat ML/TF and associated unlawful activities in
the operational level.

“Money or Value Transfer Service” (MVTS) refers to financial services that

involve the acceptance of cash, checks, other monetary instruments or other
stores of value, and the payment of a corresponding sum in cash or other form to
a beneficiary by means of a communication, message, transfer, or through a
clearing network to which the service provider belongs.

“Mutual Legal Assistance” (MLA) refers to the formal method of cooperation

between two jurisdictions for purposes of seeking assistance in the production of
documents, asset freezing and forfeiture, extradition, enforcement of foreign
judgment, and other kinds of legal assistance in criminal matters.

“National Risk Assessment” (NRA) refers to a comprehensive exercise to

identify, assess and understand a country’s ML/TF threats, vulnerabilities and the
consequential risks, with a view to mitigate illicit flow of funds and transactions.

Reviewer: Atty. Ivan Yannick S. Bagayao CPA, MBA

 “Non-Profit Organization” (NPO) refers to a juridical person, legal arrangement
or organization that primarily engages in raising or disbursing funds for purposes
such as charitable, religious, cultural, educational, social or fraternal purposes, or
for the carrying of other types of “good works”.

“Offender” refers to any person who commits a money laundering offense.

“Ongoing Monitoring Process” (OMP) refers to the process of conducting

continuing due diligence, including continually assessing the risks, understanding
the transactions and activities, and updating, based on risk and materiality, the
identification information and/or identification documents, of customers, their
agents and beneficial owners.

“Originating/Ordering Financial Institution” refers to the financial institution,

which initiates the wire transfer and transfers the funds upon receiving the request
for a wire transfer on behalf of the originator.
“Originator” refers to the account holder who allows the wire transfer from that
account or where there is no account, the person that places an order with the
originating/ordering financial institution to perform a wire transfer.

“Other Government Agency” (OGA) refers to a government agency that is not an

SA, AGA or LEA.

“Parallel Financial Investigation” refers to conducting a financial investigation or

investigation into the ML/TF aspect of a case alongside, or in the context of, the
investigation into the associated unlawful activity.

“Payable-through Accounts” refers to correspondent accounts that are used

directly by third parties to transact business on their own behalf.

“Person/Entity” refers to any natural or juridical person.

Reviewer: Atty. Ivan Yannick S. Bagayao CPA, MBA

 “Philippine Identification Card” (PhilID) refers to the non-transferrable
identification card issued by the Philippine Statistics Authority (PSA) to all citizens
and resident aliens registered under the Philippine Identification System. It shall
serve as the official government-issued identification document of cardholders in
dealing with all government agencies, local government units, government and
controlled corporations, government financial institutions, and all private sector
entities.

“Philippine Identification System” (PhilSys) refers to the Philippine

Government’s central identification platform, established under Republic Act No.
11055, otherwise known as the “Philippine Identification System Act” (PhilSys Act),
for all citizens and resident aliens of the Philippines.

“PhilSys Number” (PSN) refers to the randomly generated, unique and permanent
identification number assigned to every citizen or resident alien, upon birth or
registration, by the PSA.
“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.

“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,
soldiers, 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.

Reviewer: Atty. Ivan Yannick S. Bagayao CPA, MBA

 “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.

“Probable Cause” refers to such facts and circumstances which would lead a
reasonably discreet, prudent, or cautious man to believe that: (1) 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; or (2) ML/TF has
been committed and that the respondent is probably guilty thereof.
“Proceeds” refers to an amount derived or realized from any unlawful activity, as
herein defined.

“Property” refers to anything 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, as herein defined, such as, but not limited to:
(a) Cash;

(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.

Reviewer: Atty. Ivan Yannick S. Bagayao CPA, MBA

 (2) Personal property, used as instrumentalities in the commission of any
unlawful activity, as herein defined, 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 or local
government unit 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 not belonging to the party against whom the freeze order or
asset preservation order is issued and held by any other person, or standing
on the records of the registry of deeds or local government unit in the name
of any other person, but are:
(a) derived from, or traceable to, any unlawful activity; or

(b) used as an instrumentality in the commission of any unlawful activity,

as herein defined.

“Purely Legal/Accounting Service” refers to:

(1) Rendition of purely litigation, notarial, legal counseling, and/or other
services that can only be undertaken by a lawyer, as a professional;

(2) Rendition of purely accounting, auditing and/or other services that can only
be undertaken by a certified public accountant, as a professional.

“Relationship” refers to the business or professional relationship between the

covered person and its customer.

Reviewer: Atty. Ivan Yannick S. Bagayao CPA, MBA

 “Request for Information” (RFI) refers to a request for information by FIUs, LEAs
and OGAs, whether domestic or foreign, for intelligence or investigative purposes
only.

“Realty Transaction” refers to a real estate transaction involving an amount in

excess of Five Hundred Thousand Pesos (PHP500,000.00).

“Realty Transaction Report” (RTR) refers to a report, including copies of the

relevant documents, on a realty transaction, as herein defined, filed by the Land
Registration Authority and all its Registry of Deeds, before the AMLC.

“Reduced Due Diligence” (RDD) refers to the lowest level of customer due
diligence that is appropriate in cases where there is low risk of money laundering
or terrorism financing.

“Related Account” refers to an account, 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, regardless of the layer of accounts that
the funds had passed through or transactions that they had undergone.

“Risk” refers to the risk of loss arising from ML/TF activities.

“Risk-Based Approach” refers to the process by which countries, competent

authorities, and covered persons identify, assess, and understand the ML/TF risks
to which they are exposed, and take the appropriate mitigation measures in
accordance with the level of risk. This includes prioritization and efficient allocation
of resources by the relevant key players and stakeholders in applying AML/CTF
measures in their operations in a way that ensures that they are commensurate
with the risks involved.

Reviewer: Atty. Ivan Yannick S. Bagayao CPA, MBA

 “Sectoral Risk Assessment” refers to a comprehensive exercise to identify,
assess and understand an industry’s, or business or professional sector’s, threats,
vulnerabilities and the consequential risks, with a view to mitigate illicit flow of funds
and transactions.

“Securities and Exchange Commission” (SEC) refers to the Philippines’

company register and regulator of the securities industry.

“Serial Payment” refers to a direct sequential chain of payment where the wire
transfer and accompanying payment message travel together from the
originating/ordering financial institution to the beneficiary financial institution,
directly or through one or more intermediary financial institutions.

“Shell Bank” refers to a bank that has no physical presence in the country in which
it is incorporated and licensed, and which is unaffiliated with a regulated financial
group that is subject to effective consolidated supervision.

“Ship-Based Casino” refers to casinos, the operation of which is undertaken on

board a vessel, ship, boat or any other water-based craft wholly or partly intended
for gambling.

“Source of Fund” refers to the origin of the funds or other monetary instrument
that is the subject of the transaction, or business or professional relationship
between a covered person and its customer, such as cash on hand, safety deposit
box with a covered person, and a particular bank or investment account.

“Source of Wealth” refers to the resource from which the customer’s wealth,
including all monetary instruments and properties, came, comes, or will come from,
such as employment, business, investment, foreign remittance, inheritance,
donation, and winnings.

Reviewer: Atty. Ivan Yannick S. Bagayao CPA, MBA

 “Straight-through Processing” refers to payment transactions that are conducted
electronically without the need for manual intervention.

“Strategic Analysis” refers to the high-level macro analysis of data to decipher

the underlying patterns and trends that would enable the AMLC to draw
conclusions and develop long-term strategies for the prevention of ML/TF, and to
provide input for policy formulation.

“Substantial Evidence” refers to such a level of evidence which a reasonable

mind might accept as adequate to justify or support a conclusion that a specific
violation was committed.

“Supervising Authority” (SA) refers to the BSP, the SEC, the IC, or other
government agencies designated by law to supervise or regulate a particular
financial institution or DNFBP.

“Suspicious Circumstance” refers to any of the following circumstances, the

existence of which makes a transaction suspicious:
(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;

Reviewer: Atty. Ivan Yannick S. Bagayao CPA, MBA

 (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 ML/TF or related unlawful activity
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,
such as the relevant transactions in related and materially-linked accounts,
as herein defined.

“Suspicion” refers to a person’s state of mind—based on his skills, experience,

and/or understanding of the customer profile—which considers that there is a
possibility that any of the suspicious circumstances exists.

“Suspicious Transaction” refers to a transaction, regardless of amount, where

any of the suspicious circumstances, as herein defined, is determined, based on
suspicion or, if available, reasonable grounds, to be existing.

“Suspicious Transaction Report” (STR) refers to a report on a suspicious

transaction, as herein defined, filed by a covered person before the AMLC.

“Tactical Analysis” refers to the analysis of data directed towards the short-term
development of investigative priorities and deployment of resources, which include
the analysis of time, space, offender, victim, and modus operandi for individual
high-profile crimes, repeat incidents, and crime patterns, with a specific focus on
crime series.

“Terrorism Financing” (TF) refers to the crime defined under Sections 4 of the
TFPSA.

Reviewer: Atty. Ivan Yannick S. Bagayao CPA, MBA

 “Terrorism Financing Prevention and Suppression Act” (TFPSA) refers to
Republic Act No. 10168.

“Transaction” refers to any act establishing any right or obligation, or giving rise
to any contractual or legal relationship between the covered person and its
customer. It also includes any movement of funds, by any means, in the ordinary
course of business of a covered person.
“Trustee” refers to a person in whom confidence is reposed as regards property
for the benefit of another person called the trustor/grantor/settlor.

“Trustor/Grantor/Settlor” refers to a person who establishes a trust, or who

transfers ownership of his assets to a trustee by means of a trust deed or similar
arrangement.

“Unique Transaction Reference Number” refers to a combination of letters,

numbers or symbols, determined by the payment service provider, in accordance
with the protocols of the payment and settlement system or messaging system
used for the wire transfer.

“Virtual Asset” refers to a digital representation of value that can be digitally

traded, or transferred, and can be used for payment or investment purposes.

“Virtual Asset Provider” refers to any person who, as a business, conducts one
or more of the following activities or operations for or on behalf of another person:
(a) Exchange between virtual assets and fiat currencies;

(b) Exchange between one or more forms of virtual assets;

(c) Transfer (the conduct of a transaction on behalf of another person that

moves a virtual asset from one one virtual asset address or account to
another) of virtual assets;

Reviewer: Atty. Ivan Yannick S. Bagayao CPA, MBA

 (d) Safekeeping and/or administration of virtual assets or instruments enabling
control over virtual assets; and

(e) Participation in and provision of financial services related to an issuer’s offer

and/or sale of a virtual asset.

“Wire Transfer” refers to any transaction carried out on behalf of an originator,

through an originating/ordering financial institution, by electronic means, with a
view to making an amount of funds available to a beneficiary at a beneficiary
financial institution, irrespective of whether the originator and the beneficiary are
the same person.

3. UNLAWFUL ACTIVITIES

Section 1. Unlawful Activities.

Unlawful activities refer to any act or omission, or series or combination thereof,
involving or having direct relation, to the following:
(a) “Kidnapping for Ransom” under Article 267 of Act No. 3815, otherwise
known as the Revised Penal Code, as amended;

(b) 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”;

(c) 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”;

(d) “Plunder” under Republic Act No. 7080, as amended;

Reviewer: Atty. Ivan Yannick S. Bagayao CPA, MBA

 (e) “Robbery” and “Extortion” under Articles 294, 295, 296, 299, 300, 301 and
302 of the Revised Penal Code, as amended;

(f) “Jueteng” and “Masiao” punished as illegal gambling under Presidential

Decree No. 1602;

(g) “Piracy on the High Seas” under the Revised Penal Code, as amended, and
Presidential Decree No. 532:
(h) “Qualified Theft” under Article 310 of the Revised Penal Code, as
amended;

(i) “Swindling” under Article 315 and “Other Forms of Swindling” under Article
316 of the Revised Penal Code, as amended:

(j) “Smuggling” under Republic Act No. 455, and Republic Act No. 1937, as
amended, otherwise known as the “Tariff and Customs Code of the
Philippines”;

(k) Violations under Republic Act No. 8792, otherwise known as the “Electronic
Commerce Act of 2000”;

(l) “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;

(m) “Terrorism” and “Conspiracy to Commit Terrorism”, as defined and

penalized under Sections 3 and 4 of Republic Act No. 9372;

(n) “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”;

Reviewer: Atty. Ivan Yannick S. Bagayao CPA, MBA

 (o) “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;

(p) “Frauds and Illegal Exactions and Transactions” under Articles 213, 214,
215 and 216 of the Revised Penal Code, as amended;
(q) “Malversation of Public Funds and Property” under Articles 217 and 222 of
the Revised Penal Code, as amended;

(r) “Forgeries” and “Counterfeiting” under Articles 163, 166, 167, 168, 169 and
176 of the Revised Penal Code, as amended;

(s) Violations of Sections 4 to 6 of Republic Act No. 9208, otherwise known as

the “Anti Trafficking in Persons Act of 2003, as amended”;

(t) 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”;

(u) Violations of Sections 86 to 106 of Chapter IV of Republic Act No. 8550,

otherwise known as the “Philippine Fisheries Code of 1998”;

(v) Violations of Sections 101 to 107, and 110 of Republic Act No. 7942,
otherwise known as the “Philippine Mining Act of 1995”;

(w) 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”;

Reviewer: Atty. Ivan Yannick S. Bagayao CPA, MBA

 (x) Violations of Section 7(b) of Republic Act No. 9072, otherwise known as the
“National Caves and Cave Resources Management Protection Act”;

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

(z) 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”;

(aa) Violation of Presidential Decree No. 1612, otherwise known as the “Anti-
Fencing Law”;

(bb) Violation of Section 6 of Republic Act No. 8042, otherwise known as the
“Migrant Workers and Overseas Filipinos Act of 1995, as amended”;

(cc) Violation of Republic Act No. 8293, otherwise known as the “Intellectual
Property Code of the Philippines, as amended”;

(dd) Violation of Section 4 of Republic Act No. 9995, otherwise known as the
“Anti-Photo and Video Voyeurism Act of 2009”;

(ee) Violation of Section 4 of Republic Act No. 9775, otherwise known as the
“Anti-Child Pornography Act of 2009”;

(ff) 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”;

Reviewer: Atty. Ivan Yannick S. Bagayao CPA, MBA

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

(hh) Felonies or offenses of a nature similar to the aforementioned unlawful

activities that are punishable under the penal laws of other countries.

Section 2. Same Conduct Approach.

In determining whether or not a felony or offense punishable under the penal laws
of other countries is “of a similar nature” so as to constitute an unlawful activity
under the AMLA, it is sufficient that both the Philippines and the other jurisdiction
criminalize the conduct or activity underlying the offense, regardless of whether
both countries place the offense within the same category, or denominate the
offense under the same nomenclature.

Section 3. Amendment and Repeal of Laws Prescribing the Details of the

Unlawful Activities.
3.1. Any unlawful activity which law has been amended, by way of renaming,
renumbering or rephrasing the relevant provisions thereof, shall continue to
be an unlawful activity under the AMLA. Provided that the material elements
of the unlawful activity under the amendatory law remains the same with the
amended law; or the unlawful activity, as defined under the amendatory law
includes or is necessarily included in the unlawful activity under the
amended law.

3.2. Any law repealing, superseding or replacing the law covering any unlawful
activity defined herein, shall be construed as the continuation of the
repealed, superseded or replaced law, which is the basis of the unlawful
activity cited under the AMLA. Provided that the new law provides the same
elements as the unlawful activity under the repealed, superseded or
replaced law.

Reviewer: Atty. Ivan Yannick S. Bagayao CPA, MBA

 4. COVERED PERSONS

Section 1. Covered Persons.

The following are the covered persons under the AMLA:
(a) The following financial institutions:
(1) Persons supervised and/or regulated by BSP, including their
subsidiaries and affiliates, which are also covered persons,
supervised and/or regulated by the BSP such as:
(a) Banks;

(b) Quasi-banks;

(c) Trust entities

(d) Pawnshops;

(e) Non-stock savings and loan associations;

(f) Other Non-bank financial institutions which under special laws

are subject to BSP supervision and/or regulation;

(g) Electronic money issuers; and

(h) Foreign exchange dealers, money changers, and remittance

and transfer companies.

(2) Persons supervised or regulated by IC, such as:

(a) Insurance companies;

(b) Pre-need companies;

Reviewer: Atty. Ivan Yannick S. Bagayao CPA, MBA

 (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 are
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, closed-end

investment companies or issuers, and other similar entities;
and

(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.

Reviewer: Atty. Ivan Yannick S. Bagayao CPA, MBA

 (b) The following DNFBPs:
(1) Jewelry dealers.

(2) Dealers in precious metals, and dealers in precious stones.

(3) Company service providers, which, as a business, provide any of the

following services to third parties:
(a) acting as a formation agent of juridical persons;
(b) 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;

(c) providing a registered office; business address or

accommodation, correspondence or administrative address
for a company, a partnership or any other juridical person or
legal arrangement; and

(d) acting as (or arranging for another person to act as) a

nominee shareholder for another person.

(4) Persons, including lawyers, accountants and other professionals,

who provide any of the following services:
(a) Managing of client money, securities or other assets;

(b) Management of bank, savings, securities or other assets;

(c) Organization of contributions for the creation, operation or

management of companies; and

Reviewer: Atty. Ivan Yannick S. Bagayao CPA, MBA

 (d) Creation, operation or management of juridical persons or
arrangements, and buying and selling business entities.

(5) Casinos, including internet-based casinos and ship-based casinos,

with respect to their casino cash transactions related to their gaming
operations.

The “Casino Implementing Rules and Regulations of Republic Act

No. 10927” shall govern the implementation of the AMLA with regard
to casinos, unless, otherwise indicated therein by the AMLC and the
AGAs.

Section 2. Primary Duties of Covered Persons.

2.1. Covered persons shall comply with all the requirements under the AMLA
and TFPSA, their respective IRR, and other AMLC issuances. They shall
have the duty to cooperate with the AMLC in the discharge of the latter’s
mandate, and execution of its lawful orders and issuances, to protect their
businesses or professions from being used in ML/TF activities.

2.2. The covered persons’ board of directors, partners or sole proprietors shall
be ultimately responsible for the covered persons’ compliance with the
AMLA and TFPSA, their respective IRR, and other AMLC issuances.

Section 3. Market Entry.

3.1. Licensing or Registration with SAs.
Covered persons shall secure a license or registration with the appropriate
SAs, if any, or the appropriate government agency before they shall
operate, as required by the laws covering their operations.

3.2. Registration with AMLC.

Reviewer: Atty. Ivan Yannick S. Bagayao CPA, MBA

 All covered persons shall register with the AMLC. In line with this
requirement, and consistent with their respective authorities, SAs, or other
licensing or business registration authorities, shall prescribe registration
with the AMLC as a requirement for continued licensing and/or operations
of covered persons, and, when necessary, transacting with other covered
persons.

3.3. Prohibition against Shell Banks.

No shell bank shall be allowed to operate or be established in the
Philippines.
3.4. Prevention of Criminals from Participating in the Affairs of Covered Persons.
The AMLC and the SAs shall take the necessary legal or regulatory
measures to prevent criminals or their associates from holding, or being the
beneficial owner of, a significant or controlling interest, or holding a
management function, in covered persons.

5. MONEY, LAUNDERING, TERRORISM FINANCING AND ASSET FORFEITURE

5.1.1. Money Laundering and Terrorism Financing

Section 1. 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;

Reviewer: Atty. Ivan Yannick S. Bagayao CPA, MBA

 (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 ML offenses referred to in (1), (2),

or (3) above;

(5) aids, abets, assists in, or counsels the commission of the ML

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
ML referred to in items (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.

Section 2. Predicate Offenses to Money Laundering.

All unlawful activities, as defined herein, are the predicate offenses to ML
committed under Rule 9, Section 1(a) hereof.

Section 3. Jurisdiction over Money Laundering Cases.

3.1. Regional Trial Court.
The regional trial courts shall have jurisdiction to try ML cases committed
by private individuals, and public officers not covered by the jurisdiction of
the Sandiganbayan.

3.2. Sandiganbayan.
The Sandiganbayan shall have jurisdiction to try ML cases committed by
public officers under its jurisdiction, and private persons who are in
conspiracy with such public officers.

Section 4. Prosecution of Money Laundering Cases.

4.1. Independent Proceedings.

Reviewer: Atty. Ivan Yannick S. Bagayao CPA, MBA

 The prosecutions of ML and the associated unlawful activity shall proceed
independently. Any person may be charged with and convicted of both ML
and the associated unlawful activity.

4.2. Separate and Distinct Elements.

The elements of ML are separate and distinct from the elements of the
associated 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 ML.

4.3. Knowledge.
The element of knowledge may be established by direct or circumstantial
evidence. The deliberate non-performance of the preventive measures
under the AMLA, this IRR, AMLC issuances, and SA’s guidelines by a
covered person’s responsible directors, officers and employees shall be
considered in determining knowledge of the commission of ML offenses.

4.4. Rules of Procedure.

The Rules of Court shall govern all proceedings concerning the prosecution
of ML. The prosecution of ML and other violations of the AMLA shall be
handled by the Department of Justice, through its public prosecutors, the
Office of the Ombudsman, through the Office of the Special Prosecutor,
pursuant to the Rules on Criminal Procedure.

4.5. No ML Case During Election Period.

No case for ML may be filed against a candidate for an electoral office
during an election period.

Section 5. Terrorism Financing.

Reviewer: Atty. Ivan Yannick S. Bagayao CPA, MBA

 The provisions of the TFPSA and its IRR shall govern matters relating to TF,
including the implementation of the relevant targeted financial sanctions.

5.1.2. Freeze Order

Section 1. General Rules on Freeze Orders.

The following requirements shall be observed in the issuance of freeze orders:
(a) No prior criminal charge, pendency of a case, or conviction for an unlawful
activity or ML offense is necessary for the commencement or the resolution
of a petition for freeze order.

(b) No asset shall be frozen to the prejudice of a candidate for an electoral

office during an election period.

(c) No court shall issue a temporary restraining order or a writ of injunction

against any freeze order, except the Supreme Court.

Section 2. Court-issued Freeze Order.

2.1. Petition for Issuance of Freeze Order.
By authority of the Council, the AMLC Secretariat shall file before the Court
of Appeals, through the Office of the Solicitor General, an Ex Parte Petition
for Issuance of Freeze Order.

2.2. Related 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.

2.3. Rule of Procedure.

Reviewer: Atty. Ivan Yannick S. Bagayao CPA, MBA

 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)” and other
applicable rules that may be promulgated by the Supreme Court.

2.4. Period to Resolve Petition.

The Court of Appeals shall resolve the petition to freeze within twenty-four
(24) hours from filing thereof.

2.5. Issuance.
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, for a period of twenty (20) days,
directing the concerned covered persons and government agencies to
desist from allowing any transaction, withdrawal, deposit, transfer, removal,
conversion, other movement, concealment, or other disposition of the
subject monetary instrument or property.

2.6. Coverage.
The freeze order shall be limited only to the amount of cash or monetary
instrument, or value of property that the Court of Appeals finds there is
probable cause to be considered as proceeds of a predicate offense or
otherwise related to an unlawful activity. The freeze order shall not apply to
amounts in the same account in excess of the amount or value of the
proceeds of the predicate offense or otherwise related to an unlawful
activity.

2.7. Summary Hearing and Extension.

Reviewer: Atty. Ivan Yannick S. Bagayao CPA, MBA

 Before the expiration of the twenty (20)-day freeze order, 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 to extend its
effectivity. Pending resolution by the Court of Appeals, the freeze order shall
remain effective.

2.8. Effectivity of Freeze Order.

The freeze order shall take effect immediately and shall remain effective for
a total period not exceeding six (6) months. This is without prejudice to an
asset preservation order that the regional trial court having jurisdiction over
the appropriate AMLC 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.

2.9. Motion to Lift.

(a) A person whose monetary instrument or property has been frozen
may file a motion to lift the freeze order.

(b) If a freeze order is imposed on an account, including bank account,

of a covered person that it uses for payment of salary, rent, suppliers,
and/or taxes in the ordinary course of a legitimate business, the
covered person may apply with the court which issued the freeze
order to lift the same by submitting a bond or other acceptable
securities of equal value to the amount or value subject of the freeze
order. The bond or security when approved by the court shall secure
the payment or enforcement of any order or judgment that the AMLC
may recover in the appropriate action relating to the freeze order.

(c) The court must resolve the motion before the expiration of the freeze
order.

Reviewer: Atty. Ivan Yannick S. Bagayao CPA, MBA

 2.10. Lifting the Effects of the Freeze Order.
(a) The freeze order shall be deemed ipso facto lifted after its expiration,
unless an ML complaint against the person whose monetary
instrument or property was frozen, or a petition for CF against the
frozen monetary instrument or property, has been filed, in which case
the freeze order shall remain effective until the ML case is terminated
or an asset preservation order is issued, respectively.

(b) Before the expiration of the freeze order, the covered person shall
secure a written confirmation from the AMLC to ascertain if a petition
for civil forfeiture or an ML complaint has been filed.
Section 3. AMLC-issued Freeze Order.
Freeze orders issued by the AMLC shall be governed by the TFPSA and its IRR.
Section 4. Duties of Covered Persons and Concerned Government Agencies.
4.1. Implement Freeze Order.
(a) 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.

(b) Interests earned during the effectivity of the freeze order shall be
earned to the benefit of the frozen monetary instrument or property,
and shall be considered as fruits of the said assets in cases the court
grants the petition for civil forfeiture.

(c) Government agencies concerned, shall annotate the freeze order on

the title of the property, as may be allowed under existing laws, or
such other mechanism that would prevent any transaction,

Reviewer: Atty. Ivan Yannick S. Bagayao CPA, MBA

 withdrawal, transfer, removal, conversion, other movement or
concealment of the property subject of the freeze order.

4.2. Freeze and Report Related Accounts.

(a) Upon receipt of the freeze order that directs the freezing of related
accounts, 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.

(b) 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.

(c) Relevant transactions of related accounts shall be reported to the

AMLC as suspicious transactions.

4.3. Furnish Copy of Freeze Order to Owner or Holder.

(a) The covered person and government agency concerned shall
immediately furnish a copy of the freeze order upon the owner or
holder of the monetary instrument or property or related accounts
subject thereof.

(b) The covered person and government agency concerned shall,

likewise, immediately notify the owner or holder of a frozen related
account on why the monetary instrument or property was considered

Reviewer: Atty. Ivan Yannick S. Bagayao CPA, MBA

 as such, and furnish a copy of the freeze order, which was used as
the basis for the freeze.

4.4. Submit Detailed Return.

(a) Within twenty-four (24) hours from receipt of the freeze order or
freezing of the related account, 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.

(b) 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.
4.5. 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 and government agencies, whichever are
applicable:
(1) The names of the account holders, personal property owners
or possessors, or real property owners or occupants;

(2) The value of the monetary instrument, property, or proceeds

as of the time the assets were ordered frozen;

(3) All relevant information as to the status and nature of the

monetary instrument, property, or proceeds;

(4) The date and time when the freeze order was served; and

(5) The basis for the identification as related accounts.

Reviewer: Atty. Ivan Yannick S. Bagayao CPA, MBA

 (b) For covered persons: The account numbers and/or description of the
monetary instrument, property, or proceeds involved;

(c) For concerned government agencies:

(1) 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;

(2) Registration in the Primary Entry Book and corresponding

Registration Book in the Register of Deeds for unregistered
real property;

(3) 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;

(4) 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;

(5) Certificates of registration for motor vehicles and heavy

equipment indicating the engine numbers, chassis numbers
and plate numbers;

(6) Certificates of numbers for seacraft;

(7) Registration certificates for aircraft; or

Reviewer: Atty. Ivan Yannick S. Bagayao CPA, MBA

 (8) Commercial invoices or notarial identification for personal
property capable of manual delivery.

5.1.3. Bank Inquiry

Section 1. Bank Inquiry Order by the Court.

1.1. Application for Issuance of Bank Inquiry Order.
By authority of the Council, the AMLC Secretariat shall file before the Court
of Appeals, through the Office of the Solicitor General, an Ex Parte
Application for the Issuance of Bank Inquiry Order to examine or inquire into
any particular deposit or investment account that is related an unlawful
activity or ML offense.
1.2. 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.

1.3. No Prior Criminal Charge, Pendency of a Case, or Conviction Necessary.

No prior criminal charge, pendency of a case, or conviction for an unlawful
activity or ML offense is necessary for the filing or the resolution of an
application for issuance of bank inquiry order.

1.4. 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.

1.5. Period to Resolve Application.

Reviewer: Atty. Ivan Yannick S. Bagayao CPA, MBA

 The Court of Appeals shall resolve the application within twenty-four (24)
hours from filing thereof.

1.6. Bank Inquiry 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 ML offense.

Section 2. Bank Inquiry Order by the AMLC.

2.1. The AMLC shall issue an ex parte order 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:
(a) Kidnapping for ransom under Article 267 of Act No. 3815, otherwise
known as the Revised Penal Code, as amended;

(b) 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;

Reviewer: Atty. Ivan Yannick S. Bagayao CPA, MBA

 (c) Hijacking and other violations under Republic Act No. 6235;
destructive arson and murder, as defined under the Revised Penal
Code, as amended;
(d) Felonies or offenses of a nature similar to those mentioned in Rule
11, Sections 2.1 (a), (b) and (c), which are punishable under the
penal laws of other countries;

(e) Terrorism and conspiracy to commit terrorism as defined and

penalized under Republic Act No. 9372; and

(f) Financing of terrorism under Section 4 and offenses punishable

under Sections 5, 6, 7 and 8 of the TFPSA.

2.2. The relevant requirements for Bank Inquiry Order by the Court shall apply
to Bank Inquiry Order by the AMLC, including the procedure for inquiry into
related accounts.
Section 3. Duties of the Covered Persons.
Covered persons shall have the following duties in relation to bank inquiry orders:
(a) 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.

(b) 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 notice of AMLC Resolution.

(c) Keep the confidentiality of the inquiry, and ensure that the owner of any
monetary instrument or property or other unauthorized personnel shall not
be informed about the inquiry, to prevent tipping-off.

Reviewer: Atty. Ivan Yannick S. Bagayao CPA, MBA

 Section 4. Bank Examination by the BSP.
4.1. In the course of a periodic or special examination of covered persons under
its supervision and/or regulation, the BSP may inquire into or examine bank
accounts, including customer identification, account opening, and
transaction documents, for the purpose of checking compliance with the
requirements of the AMLA and TFPSA, their respective IRR, and other
AMLC issuances.

4.2. The AML/CTF findings that fall within the parameters set by the AMLC shall
be referred by the BSP to the AMLC for evaluation and filing of an
administrative case, if warranted, against the covered person and its
responsible directors, officers and employees.

5.1.4. Asset Forfeiture

Section 1. General Rules on Asset Forfeiture.

The following rules shall be observed in asset forfeiture proceedings:
(a) No prior criminal charge, pendency of a case, or conviction for an unlawful
activity or ML offense is necessary for the commencement or the resolution
of a petition for civil forfeiture.

(b) No asset shall be attached or forfeited to the prejudice of a candidate for an

electoral office during an election period.

Section 1. Civil Forfeiture.

1.1. Petition for Civil Forfeiture.
Upon determination that probable cause exists that any monetary
instrument or property is in any way related to an unlawful activity or ML

Reviewer: Atty. Ivan Yannick S. Bagayao CPA, MBA

 offense, the AMLC shall file with the regional trial court, through the Office
of the Solicitor General, a verified petition for civil forfeiture.

1.2. 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 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.

1.3. 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).

1.4. Asset Preservation Order.

Upon verified petition by the AMLC, with prayer for issuance of asset
preservation order, and after determination that probable cause exists that

Reviewer: Atty. Ivan Yannick S. Bagayao CPA, MBA

 any monetary instrument or property is in any way related to an unlawful
activity, the Regional Trial Court may issue an asset preservation order, in
accordance with 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), which shall be effective immediately, forbidding any
transaction, withdrawal, deposit, transfer, removal, conversion,
concealment or other disposition of the subject monetary instrument or
property.

1.5. Motion to Discharge.

(a) A person whose monetary instrument or property has been
preserved may file a motion to discharge the asset preservation
order.

(b) If an asset preservation order is imposed on an account of a covered

person that it uses for payment of salary, rent, suppliers, and/or taxes
in the ordinary course of a legitimate business, the covered person
may apply with the court which issued the asset preservation order
to discharge the same by submitting a bond or other acceptable
securities of equal value to the amount or value subject of the asset
preservation order. The bond or security when approved by the court
shall secure the payment or enforcement of any order or judgment
that the AMLC may recover in the appropriate action relating to the
asset preservation order.

Section 2. Asset Forfeiture in ML Cases.

Where there is conviction for ML, 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 or related to an unlawful activity.

Reviewer: Atty. Ivan Yannick S. Bagayao CPA, MBA

 Section 3. Claim on Forfeited Assets.
3.1. Where the court has issued an order of forfeiture of the monetary instrument
or property in a criminal prosecution for any ML 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.

3.2. 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
executory.

3.3. This provision shall also apply in civil forfeiture.

Section 4. Payment in Lieu of Forfeiture.

4.1. Where the court has issued an order of forfeiture of the monetary instrument
or property subject of an ML offense, and said order cannot be enforced
because:
(a) any particular monetary instrument or property cannot, with due
diligence, be located;

(b) 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;

(c) it has been concealed, removed, converted, or otherwise transferred

to prevent the same from being found or to avoid forfeiture thereof;

Reviewer: Atty. Ivan Yannick S. Bagayao CPA, MBA

 (d) it is located outside the Philippines or has been placed or brought
outside the jurisdiction of the court; or
(e) 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.

4.2. This provision shall apply in both civil and criminal forfeiture.

6. REFERENCES

• Anti-Money Laundering Council. (2018). From Amlc.gov.ph:

http://www.amlc.gov.ph/images/PDFs/FINAL%202018%20IRRv1.pdf

• Congress of the Philippines - AMCL. (n.d.). From Amlc.gov.ph:

http://www.amlc.gov.ph/images/PDFs/Laws/RA09160.pdf

• Research credit to Grace Tin of CKSC

Reviewer: Atty. Ivan Yannick S. Bagayao CPA, MBA