The Anti-Money Laundering Act (Republic Act No. 9160, as amended) criminalizes money laundering and establishes a reporting and enforcement framework to prevent the Philippines from being used as a haven for laundering the proceeds of crime. Money laundering is committed by any person who, knowing that any monetary instrument or property represents, involves, or relates to the proceeds of an unlawful activity, transacts or attempts to transact with it, converts or conceals it, or fails to disclose or file a report as required. The law lists the predicate unlawful activities (such as drug trafficking, graft, plunder, robbery, swindling, and many others), and laundering the proceeds of these is punished. Covered persons (institutions) include banks and other entities supervised by the central bank, insurance companies and entities supervised by the insurance regulator, securities dealers and entities supervised by the securities regulator, and designated non-financial businesses and professions such as jewelry dealers, company service providers, and, within limits, certain professionals, as well as casinos and real estate developers and brokers under the amendments. Covered persons have core obligations: customer due diligence (know-your-customer), record keeping, and reporting. They must file a Covered Transaction Report (CTR) for transactions in cash or other equivalent monetary instrument exceeding the threshold amount, and a Suspicious Transaction Report (STR) for transactions with no underlying legal or trade obligation, or that are otherwise suspicious, regardless of amount. Reporting is not a violation of bank secrecy laws, and covered persons and their officers are protected from liability for good-faith reporting; conversely, tipping off the client that a report was made is prohibited. The Anti-Money Laundering Council may investigate, and it may seek a freeze order from the Court of Appeals (ex parte) over accounts related to an unlawful activity, and may institute civil forfeiture proceedings. So the AMLA punishes laundering the proceeds of listed crimes and obliges covered institutions to know their customers, keep records, and report covered and suspicious transactions.
What the Law Punishes
RA 9160 (AMLA) criminalizes money laundering — transacting with, converting, or concealing property known to be the proceeds of a listed unlawful activity (drugs, graft, plunder, robbery, swindling, and others), or failing to report.
Covered Persons and Duties
Covered persons include banks and central-bank-supervised entities, insurance and securities entities, certain designated non-financial businesses, and (under amendments) casinos and real estate developers/brokers. Duties: customer due diligence (KYC), record keeping, and reporting.
The Two Reports
- Covered Transaction Report (CTR) — for cash or equivalent transactions above the threshold; and
- Suspicious Transaction Report (STR) — for suspicious transactions regardless of amount.
Enforcement
Reporting is not a breach of bank secrecy, and good-faith reporting is protected; tipping off the client is prohibited. The AMLC may investigate, seek an ex parte freeze order from the Court of Appeals, and pursue civil forfeiture.
Practical Takeaways
- Laundering proceeds of listed crimes is punished;
- Covered institutions must do KYC and file CTRs and STRs;
- The AMLC can freeze accounts and pursue forfeiture.
Frequently Asked Questions
What is money laundering under the AMLA? Transacting with, converting, concealing, or failing to report monetary instruments or property known to represent or relate to the proceeds of a listed unlawful activity such as drug trafficking, graft, plunder, or swindling.
Who are covered persons under the AMLA? Banks and central-bank-supervised entities, insurance and securities entities, designated non-financial businesses and professions, and under the amendments, casinos and real estate developers and brokers, among others.
What is the difference between a CTR and an STR? A Covered Transaction Report is filed for cash or equivalent transactions exceeding the threshold amount. A Suspicious Transaction Report is filed for suspicious transactions regardless of the amount involved.
Does reporting violate bank secrecy? No. Reporting under the AMLA is not a violation of bank secrecy laws, and covered persons and their officers are protected from liability for good-faith reporting. Tipping off the client that a report was made is prohibited.
This commentary is for general informational purposes only and does not constitute legal advice. For guidance specific to your situation, please consult a licensed attorney.
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