RULES IMPLEMENTING THE ANTI-MONEY LAUNDERING LAW VIRTUAL LAW LIBRARY (2024)

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TheRules and Regulations Implementing the Anti-Money Laundering Act of 2001
REPUBLICACT NO. 9160.

Section 1.Title. - These Rules shall be known and cited as the "Rulesand Regulations Implementing RepublicAct No. 9160" (the Anti-MoneyLaundering Act of 2001 [AMLA]).

Sec. 2. Purpose.- These Rules are promulgated to prescribe the procedures andguidelinesfor the implementation of the AMLA.

Sec. 3. Declarationof Policy. – It is the policy of the State that:

(a) Theintegrityand confidentiality of bank accounts shall be protected and preserved;

(b) ThePhilippinesshall not be used as a money laundering site for the proceeds of anyunlawfulactivity; and

(c)Consistentwith its foreign policy, the Philippines shall extend cooperation intransnationalinvestigations and prosecutions of persons involved in money launderingactivities wherever committed.

Sec. 4. Definitionof Terms. -

(a) "Covered institutions" refer to the following:

(1) Banks,offshore banking units, quasi-banks, trust entities, non-stock savingsand loan associations, pawnshops, and all other institutions includingtheir subsidiaries and affiliates supervised and/or regulated by theBangkoSentral ng Pilipinas (BSP).

Asubsidiarymeans an entity more than fifty percent (50%) of the outstanding votingstock of which is owned by a bank, quasi-bank, trust entity or anyotherinstitution supervised or regulated by the BSP.

Anaffiliatemeans an entity at least twenty percent (20%) but not exceeding fiftypercent(50%) of the voting stock of which is owned by a bank, quasi-bank,trustentity, or any other institution supervised and/or regulated by the BSP.

(2)Insurancecompanies, insurance agents, insurance brokers, professionalreinsurers,reinsurance brokers, holding companies, holding company systems and allother persons and entities supervised and/or regulated by the InsuranceCommission (IC).

Aninsurancecompany includes those entities authorized to transact insurancebusinessin the Philippines, whether life or non-life and whether domestic,domesticallyincorporated or branch of a foreign entity. A contract of insurance isan agreement whereby one undertakes for a consideration to indemnifyanotheragainst loss, damage or liability arising from an unknown or contingentevent. Transacting insurance business includes making or proposing tomake,as insurer, any insurance contract, or as surety, any contract ofsuretyshipas a vocation and not as merely incidental to any other legitimatebusinessor activity of the surety, doing any kind of business specificallyrecognizedas constituting the doing of an insurance business within the meaningofPresidential Decree (P. D.) No. 612, as amended, including areinsurancebusiness and doing or proposing to do any business in substanceequivalentto any of the foregoing in a manner designed to evade the provisions ofP. D. No. 612, as amended.

Aninsuranceagent includes any person who solicits or obtains insurance on behalfofany insurance company or transmits for a person other than himself anapplicationfor a policy or contract of insurance to or from such company or offersor assumes to act in the negotiation of such insurance.

Aninsurancebroker includes any person who acts or aids in any manner insoliciting,negotiating or procuring the making of any insurance contract or inplacingrisk or taking out insurance, on behalf of an insured other thanhimself.

Aprofessionalreinsurer includes any person, partnership, association or corporationthat transacts solely and exclusively reinsurance business in thePhilippines,whether domestic, domestically incorporated or a branch of a foreignentity.A contract of reinsurance is one by which an insurer procures a thirdpersonto insure him against loss or liability by reason of such originalinsurance.

Areinsurancebroker includes any person who, not being a duly authorized agent,employeeor officer of an insurer in which any reinsurance is effected, acts oraids in any manner in negotiating contracts of reinsurance or placingrisksof effecting reinsurance, for any insurance company authorized to dobusinessin the Philippines.

Aholding companyincludes any person who directly or indirectly controls any authorizedinsurer.

Aholding companysystem includes a holding company together with its controlled insurersand controlled persons.

(3) (i)Securitiesdealers, brokers, salesmen, associated persons of brokers or dealers,investmenthouses, investment agents and consultants, trading advisors, and otherentities managing securities or rendering similar services, (ii) mutualfunds or open-end investment companies, close-end investment companies,common trust funds, pre-need companies or issuers and other similarentities;(iii) foreign exchange corporations, money changers, money payment,remittance,and transfer companies and other similar entities, and (iv) otherentitiesadministering or otherwise dealing in currency, commodities orfinancialderivatives based thereon, valuable objects, cash substitutes and othersimilar monetary instruments or property supervised and/or regulated bythe Securities and Exchange Commission (SEC).

Asecuritiesbroker includes a person engaged in the business of buying and sellingsecurities for the account of others.

Asecuritiesdealer includes any person who buys and sells securities for his/heraccountin the ordinary course of business.

Asecuritiessalesman includes a natural person, employed as such or as an agent, bya dealer, issuer or broker to buy and sell securities.

Anassociatedperson of a broker or dealer includes an employee thereof who directlyexercises control of supervisory authority, but does not include asalesman,or an agent or a person whose functions are solely clerical orministerial.

See Also
Bureau of Customs Passenger Guidelines - Embassy of the Philippines in SingaporeBangko Sentral ng Pilipinas Foreign Exchange RegulationsICA | Taking Cash In and Out of SingaporeCurrency, Credit Cards, Changing Money in the Philippines

Aninvestmenthouse includes an enterprise which engages or purports to engage,whetherregularly or on an isolated basis, in the underwriting of securities ofanother person or enterprise, including securities of the Governmentandits instrumentalities.

A mutualfundor an open-end investment company includes an investment company whichis offering for sale or has outstanding, any redeemable security ofwhichit is the issuer.

Aclosed-endinvestment company includes an investment company other than open-endinvestmentcompany.

A commontrustfund includes a fund maintained by an entity authorized to performtrustfunctions under a written and formally established plan, exclusivelyforthe collective investment and reinvestment of certain moneyrepresentingparticipation in the plan received by it in its capacity as trustee,forthe purpose of administration, holding or management of such fundsand/orproperties for the use, benefit or advantage of the trustor or ofothersknown as beneficiaries.

Apre-need companyor issuer includes any corporation supervised and/or regulated by theSECand is authorized or licensed to sell or offer for sale pre-need plans.

Aforeign exchangecorporation includes any enterprise which engages or purports toengage,whether regularly or on an isolated basis, in the sale and purchase offoreign currency notes and such other foreign-currency denominatednon-bankdeposit transactions as may be authorized under its articles ofincorporation.

Aninvestmentagent or consultant or trading advisor includes any person who isengagedin the business of advising others as to the value of any security andthe advisability of trading in any security or in the business ofissuingreports or making analysis of capital markets. However, in case theissuanceof reports or the rendering of the analysis of capital markets issolelyincidental to the conduct of the business or profession of banks, trustcompanies, journalists, reporters, columnists, editors, lawyers,accountants,teachers, and publishers of newspapers and business or financialpublicationsof general and regular circulation, including their employees, theyshallnot be deemed to be investment agents or consultants or trade advisorswithin the contemplation of the AMLA and these Rules.

A moneychangerincludes any person in the business of buying or selling foreigncurrencynotes.

A moneypayment,remittance and transfer company includes any person offering to pay,remitor transfer or transmit money on behalf of any person to another person.

(b) "Customer" refers to any person or entity that keeps an account, orotherwisetransacts business, with a covered institution and any person or entityon whose behalf an account is maintained or a transaction is conducted,as well as the beneficiary of said transactions. A customer alsoincludesthe beneficiary of a trust, an investment fund, a pension fund or acompanyor person whose assets are managed by an asset manager, or a grantor ofa trust. It includes any insurance policy holder, whether actual orprospective.

(c) "MonetaryInstrument" refers to:

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

(2)Drafts,checks and notes;

(3)Securitiesor negotiable instruments, bonds, commercial papers, depositcertificates,trust certificates, custodial receipts or deposit substituteinstruments,trading orders, transaction tickets and confirmations of sale orinvestmentsand money market instruments;

(4)Other similarinstruments where title thereto passes to another by endorsem*nt,assignmentor delivery; and

(5)Contractsor policies of insurance, life or non-life, and contracts of suretyship.

(d) "Offender" refers to any person who commits a money laundering offense.

(e)"Person" refers to any natural or juridical person.

(f) "Proceeds"refers to an amount derived or realized from an unlawful activity. Itincludes:

(1) Allmaterialresults, profits, effects and any amount realized from any unlawfulactivity;

(2) Allmonetary,financial or economic means, devices, documents, papers or things usedin or having any relation to any unlawful activity; and

(3) Allmoneys,expenditures, payments, disbursem*nts, costs, outlays, charges,accounts,refunds and other similar items for the financing, operations, andmaintenanceof any unlawful activity.

(g) "Property"includes any thing or item of value, real or personal, tangible orintangible,or any interest therein or any benefit, privilege, claim or right withrespect thereto.

(h) "SupervisingAuthority" refers to the BSP, the SEC and the IC. Where the SECsupervisionapplies only to the incorporation of the registered institution, withinthe limits of the AMLA, the SEC shall have the authority to require andask assistance from the government agency having regulatory powerand/orlicensing authority over said covered institution for theimplementationand enforcement of the AMLA and these Rules.

(i) "Transaction"refers to any act establishing any right or obligation or giving risetoany contractual or legal relationship between the parties thereto. Italsoincludes any movement of funds by any means with a covered institution.

Sec. 5. Limitationsof the Rules. -

(a)The provisions of the AMLA and these Rules shall not apply to deposits,investments, and all other accounts of customers with coveredinstitutionsthat were opened or created prior to the effectivity of the AMLA onOctober17, 2001. Hence, no covered transaction reports, investigation andprosecutionof money laundering cases, or any other action authorized under theAMLA,may be undertaken with respect to such deposits, investments andaccountsas well as transactions or circ*mstances in relation thereto, that havebeen completed prior to October 17, 2001. However, the AMLA and theseRulesshall apply to all movements of funds respecting such deposits,investmentsand accounts as well as transactions or circ*mstances in relationthereto,that are initiated or commenced on or after October 17, 2001.

(b) TheAMLAand these Rules shall not be used for political persecution orharassmentor as an instrument to hamper competition in trade and commerce.

Section 1. Composition.– The members of the Anti-Money Laundering Council (AMLC) created underthe AMLA shall be the Governor of the BSP, the Insurance Commissionerandthe Chairman of the SEC. The Governor of the BSP shall be the Chairman.

Sec. 2. Collegiality.– The AMLC is a collegial body where the Chairman and the members oftheAMLC are entitled to one (1) vote each.

Sec. 3. UnanimousDecision. – The AMLC shall act unanimously in discharging itsfunctionsas defined in the AMLA and in these Rules. However, in the case of theincapacity, absence or disability of any member to discharge hisfunctions,the officer duly designated or authorized to discharge the functions ofthe Governor of the BSP, the Chairman of the SEC or the InsuranceCommissioner,as the case may be, shall act in his stead in the AMLC.

Sec. 4. Delegationof Authority. – Action on routinary administrative matters may bedelegatedto any member of the AMLC or to any ranking official of the Secretariatunder such guidelines as the AMLC may determine.

Sec. 5. Secretariat.–

(a) TheSecretariatshall be headed by an Executive Director who shall be appointed by theAMLC for a term of five (5) years. He must be a member of thePhilippineBar, at least thirty-five (35) years of age and of good moralcharacter,unquestionable integrity and known probity. He shall be considered aregularemployee of the BSP with the rank of Assistant Governor, and shall beentitledto such benefits and subject to such rules and regulations as areapplicableto officers of similar rank.

(b) Otherthanthe Executive Director whose qualifications are provided for in theprecedingparagraph, in organizing the Secretariat, the AMLC may only choose fromamong those who have served, continuously or cumulatively, for at leastfive (5) years in the BSP, the SEC or the IC, but who need not beincumbentstherein at the time of their appointment in the Secretariat. Allmembersof the Secretariat shall be considered regular employees of the BSP andshall be entitled to such benefits and subject to such rules andregulationsas are applicable to BSP employees of similar rank.

Sec. 6. Detailand Secondment of Personnel. – The AMLC is authorized under Section 7 (10) of the AMLA to enlist the assistance of the BSP, the SEC or theIC or any other branch, department, bureau, office, agency orinstrumentalityof the government, including government-owned and –controlledcorporations,in undertaking any and all anti-money laundering operations. Thisincludesthe use of any member of their personnel who may be detailed orsecondedto the AMLC, subject to existing laws and Civil Service Rules andRegulations.

Sec. 7. Confidentialityof Proceedings. – The members of the AMLC, the Executive Director,and all the members of the Secretariat, whether permanent, on detail oron secondment, shall not reveal in any manner except under orders ofthecourt, the Congress or any government office or agency authorized bylaw,or under such conditions as may be prescribed by the AMLC, anyinformationknown to them by reason of their office. In case of violation of thisprovision,the person shall be punished in accordance with the pertinentprovisionsof R. A. Nos. 3019, 6713 and 7653.

Sec. 8. Meetings.– The AMLC shall meet every first Monday of the month or as often asmaybe necessary at the call of the Chairman. Subject to the rule onconfidentialityin the immediately preceding section, the meetings of the AMLC may beconductedthrough modern technologies such as, but not limited to,teleconferencingand video-conferencing.

Sec. 9. Budget.– The budget appropriated by the Congress shall be used to defrayoperationalexpenses of the AMLC, including indemnification for legal costs andexpensesreasonably incurred for the services of external counsel or inconnectionwith any civil, criminal or administrative action, suit or proceedingsto which members of the AMLC and the Executive Director and othermembersof the Secretariat may be made a party by reason of theperformanceof their functions or duties.

Section 1. Authorityto Initiate Investigations on the Basis of Voluntary Citizens’Complaintsand Government Agency Referrals. -

(a) Anyperson,including covered institutions not subject to any account secrecy lawsand branches, departments, bureaus, offices, agencies andinstrumentalitiesof the government, including government-owned and –controlledcorporations,may report to the AMLC any activity that engenders reasonable beliefthatany money laundering offense under Section 4 of the AMLA and definedunderRule 4 of these Rules is about to be, is being or has been committed.

(b) Thepersonso reporting shall file a Voluntary Citizens’ Complaint (VCC) orGovernmentReferral (GR) in the form prescribed by the AMLC. The VCC and GR formsshall indicate that the members of the AMLC, the Executive Director andall the members of the Secretariat are bound by the confidentialityruleprovided in Section 7, Rule 2 of these Rules. The VCC shall be signedbythe complainant. The GR shall be signed by the authorizedrepresentativeof the government agency concerned, indicating his current position andrank therein.

(c)Any person who files a VCC or GR shall not incur any liability for alltheir acts in relation thereto that were done in good faith. However,anyperson who, with malice, or in bad faith, reports or files a completelyunwarranted or false information relative to any money launderingtransactionagainst any person shall be subject to the penalties provided for underSection 14 (c) of the AMLA.

(d) On thebasisof the VCC or GR, the AMLC may initiate investigation thereof, andbasedon the evidence gathered, the AMLC may cause the filing of criminalcomplaintswith the Department of Justice or the Ombudsman for the prosecution ofmoney laundering offenses.

Sec. 2. Authorityto Initiate Investigations on the Basis of Covered Transaction Reports.-

(a) CoveredTransactions. The mandatory duty and obligation of coveredinstitutionsto make reports to the AMLC covers the following transactions:

(1) Asingletransaction involving an amount in excess of Four million Philippinepesos(Php4,000,000.00) or an equivalent amount in foreign currency based onthe prevailing exchange rate where the client is not properlyidentifiedand/or the amount is not commensurate with his business or financialcapacity.

(2) Asingletransaction involving an amount in excess of Four million Philippinepesos(Php4,000,000.00) or an equivalent amount in foreign currency based onthe prevailing exchange rate which has no underlying legal or tradeobligation,purpose, origin, or economic justification.

(3) Aseriesor combination of transactions conducted within five (5) consecutivebankingdays aggregating to a total amount in excess of Four million Philippinepesos (Php4,000,000.00) or an equivalent in foreign currency based ontheprevailing exchange rate where the client is not properly identifiedand/orthe amount is not commensurate with his business or financial capacity.

(4) Aseriesor combination of transactions conducted within five (5) consecutivebankingdays aggregating to a total amount in excess of Four million Philippinepesos (Php4,000,000.00) or an equivalent in foreign currency based ontheprevailing exchange rate exchange rate where most, if not all thetransactions,do not have any underlying legal or trade obligation, purpose, origin,or economic justification.

(5) Asingleunusually large and complex transaction in excess of Four millionPhilippinepesos (Php4,000,000.00), especially a cash deposit or investment havingno credible purpose or origin, underlying trade obligation or contract,regardless of whether or not the client is properly identified and/ortheamount is commensurate with his business or financial capacity.

(6) Aseries,combination or pattern of unusually large and complex transactionsaggregatingto, without reference to any period, a total amount in excess of FourmillionPhilippine pesos (Php4,000,000.00), especially cash deposits and/orinvestmentshaving no credible purpose or origin, underlying trade obligation orcontract,regardless of whether or not the client is properly identified and/ortheamount is commensurate with his business or financial capacity.

(b) Obligationto Report Covered Transactions. All covered institutions supervisedor regulated by the BSP, the SEC and the IC shall report all coveredtransactionsto the AMLC within five (5) working days from the date of thetransactionor from the date when the covered institution concerned gained/acquiredinformation/knowledge that the transaction is a covered transaction.

(c) CoveredTransaction Report Form. The Covered Transaction Report (CTR) shallbe in the form prescribed by the appropriate Supervising Authority andapproved by the AMLC. It shall be signed by the employee(s) who dealtdirectlywith the customer in the transaction and/or who made the initialinternalreport within the covered institution, the compliance officer or hisequivalent,and a senior official of the bank with a rank not lower than seniorvice-president.The CTR shall be filed with the AMLC in a central location, to bedeterminedby the AMLC, as indicated in the instructions on the CTR form.

(d) Exemptionfrom Bank Secrecy Laws. When reporting covered transactions to theAMLC, banks and their officers, employees, representatives, agents,advisors,consultants or associates shall not be deemed to have violated R. A.No.1405, as amended, R. A. No. 6426, as amended, R.A. No. 8791 and other similar laws.

(e) SafeHarbor Provision. No administrative, criminal or civil proceedingsshall lie against any person for having made a covered transactionreportin the regular performance of his duties and in good faith, whether ornot such reporting results in any criminal prosecution under the AMLAorany other Philippine law.

(f) Filingof Criminal Complaints. On the basis of the CTR, the AMLC mayinitiateinvestigation thereof, and based on the evidence gathered, the AMLC maycause the filing of criminal complaints with the Department of Justiceor the Ombudsman for the prosecution of money laundering offenses.

(g) MaliciousReporting. Any person who, with malice, or in bad faith, reports orfiles a completely unwarranted or false information relative to anymoneylaundering transaction against any person, shall be subject to apenaltyof imprisonment from six (6) months to four (4) years and a fine of notless than One hundred thousand Philippine pesos (Php100,000.00) but notmore than Five hundred thousand Philippine pesos (Php500,000.00), atthediscretion of the court: Provided, That the offender is notentitledto avail of the benefits under the Probation Law.

If theoffenderis a corporation, association, partnership or any juridical person, thepenalty shall be imposed upon the responsible officers, as the case maybe, who participated or failed to prevent its commission. If theoffenderis a juridical person, the court may suspend or revoke its license. Ifthe offender is an alien, he shall, in addition to the penalties hereinprescribed, be deported without further proceedings after serving thepenaltiesherein prescribed. If the offender is a public official or employee, heshall, in addition to the penalties prescribed herein, suffer perpetualor temporary absolute disqualification from office, as the case may be.

(h) Breachof Confidentiality. When reporting covered transactions to theAMLC,covered institutions and their officers, employees, representatives,agents,advisors, consultants or associates are prohibited from communicating,directly or indirectly, in any manner or by any means, to any person,entity,or the media, the fact that a covered transaction report was made, thecontents thereof, or any other information in relation thereto. Neithermay such reporting be published or aired in any manner or form by themassmedia, electronic mail, or other similar devices. Violation of thisprovisionshall constitute the offense of breach of confidentiality punishedunderSection 14 (d) of the AMLA with imprisonment from three (3) to eight(8)years and a fine of not less than Five hundred thousand Philippinepesos(Php500,000.00) but not more than One million Philippine pesos(Php1,000,000.00).

(i) Fileof Covered Transactions. – Covered institutions shall maintain acompletefile on all covered transactions that have been reported to theAMLC. Covered institutions shall undertake the necessary adequatesecuritymeasures to ensure the confidentiality of such file. The file ofcoveredtransactions shall be kept for at least five (5) years: Provided, Thatif money laundering cases based thereon have been filed in court, thefilemust be retained beyond the five(5)-year period until it is confirmedthatthe case has been finally resolved or terminated by the court.

Sec. 3. Authorityto Freeze Accounts. –

(a) The AMLCis authorized under Section s 6 (6) and 10 of the AMLA to freeze anyaccountor any monetary instrument or property subject thereof upondeterminationthat probable cause exists that the same is in any way related to anyunlawfulactivity and/or money laundering offense. The AMLC may freeze anyaccountor any monetary instrument or property subject thereof prior to theinstitutionor in the course of, the criminal proceedings involving the unlawfulactivityand/or money laundering offense to which said account, monetaryinstrumentor property is any way related. For purposes of Section 10 of the AMLAand Section 3, Rule 3 of these Rules, probable cause includes suchfactsand circ*mstances which would lead a reasonably discreet, prudent orcautiousman to believe that an unlawful activity and/or a money launderingoffenseis about to be, is being or has been committed and that the account orany monetary instrument or property subject thereof sought to be frozenis in any way related to said unlawful activity and/or money launderingoffense.

(b) Thefreezeorder on such account shall be effective immediately for a period notexceedingfifteen (15) days.

(c) TheAMLCmust serve notice of the freeze order upon the covered institutionconcernedand the owner or holder of the deposit, investment or similar account,simultaneously with the issuance thereof. Upon receipt of the notice ofthe freeze order, the covered institution concerned shall immediatelystop,freeze, block, suspend or otherwise place under its absolute controltheaccount and the monetary instrument or property subject thereof.

(d) Theowneror holder of the account so notified shall have a non-extendible periodof seventy-two (72) hours upon receipt of the notice to file a verifiedexplanation with the AMLC why the freeze order should be lifted.Failureof the owner or holder of the account to file such verified explanationshall be deemed waiver of his right to question the freeze order.

(e) TheAMLCshall have seventy-two (72) hours from receipt of the writtenexplanationof the owner or holder of the frozen account to resolve the same. IftheAMLC fails to act within said period, the freeze order shallautomaticallybe dissolved. However, the covered institution shall not lift thefreezeorder without securing official confirmation from the AMLC.

(f) Beforethefifteen (15)-day period expires, the AMLC may apply in court for anextensionof said period. Upon the timely filing of such application and pendingthe decision of the court to extend the period, said period shall besuspendedand the freeze order shall remain effective.

(g) Incasethe court denies the application for extension, the freeze order shallremain effective only for the balance of the fifteen (15)-day period.

(h) Nocourtshall issue a temporary restraining order or writ of injunction againstany freeze order issued by the AMLC or any court order extending periodof effectivity of the freeze order except the Court of Appeals or theSupremeCourt.

(i) Noassetsshall be frozen to the prejudice of a candidate for an electoral officeduring an election period.

Sec. 4. Authorityto Inquire into Accounts. –

(a) The AMLC is authorized under Section 7 (2) of the AMLA to issue ordersaddressedto the appropriate Supervising Authority or any covered institution todetermine and reveal the true identity of the owner of any monetaryinstrumentor property subject of a covered transaction report, or a request forassistancefrom a foreign State, or believed by the AMLC, on the basis ofsubstantialevidence, to be, in whole or in part, wherever located, representing,involving,or related to, directly or indirectly, in any manner or by any means,theproceeds of an unlawful activity. For purposes of the AMLA and theseRules,substantial evidence includes such relevant evidence as a reasonablemindmight accept as adequate to support a conclusion.

(b)Incase of any violation of the AMLA involving bank deposits andinvestments,the AMLC may inquire into or examine any particular deposit orinvestmentwith any banking institution or non-bank financial institution uponorderof any competent court when the AMLC has established that there isprobablecause that the deposits or investments involved are in any way relatedto any unlawful activity and/or money laundering offense. The AMLC mayfile the application for authority to inquire into or examine anyparticularbank deposit or investment in court, prior to the institution or in thecourse of, the criminal proceedings involving the unlawful activityand/ormoney laundering offense to which said bank deposit or investment isanyway related. For purposes of Section 11 of the AMLA and Section 4, Rule3 of these Rules, probable cause includes such facts and circ*mstanceswhich would lead a reasonably discreet, prudent or cautious man tobelievethat an unlawful activity and/or a money laundering offense is about tobe, is being or has been committed and that the bank deposit orinvestmentsought to be inquired into or examined is in any way related to saidunlawfulactivity and/or money laundering offense.

Sec. 5. Authorityto Institute Civil Forfeiture Proceedings. – The AMLC is authorizedunder Section 7 (3) of the AMLA to institute civil forfeitureproceedingsand all other remedial proceedings through the Office of the SolicitorGeneral.

Sec. 6. Authorityto Assist the United Nations and other International Organizations andForeign States. – The AMLC is authorized under Section s 7 (8) and13(b) and (d) of the AMLA to receive and take action in respect of anyrequestof foreign states for assistance in their own anti-money launderingoperations.It is also authorized under Section 7 (7) of the AMLA to cooperate withthe National Government and/or take appropriate action in respect ofconventions,resolutions and other directives of the United Nations (UN), the UNSecurityCouncil, and other international organizations of which the Philippinesis a member. However, the AMLC may refuse to comply with any suchrequest,convention, resolution or directive where the action sought thereincontravenesthe provision of the Constitution or the execution thereof is likely toprejudice the national interest of the Philippines.

Sec. 7. Authorityto Develop and Implement Educational Programs. – The AMLC isauthorizedunder Section 7 (9) of the AMLA to develop educational programs on thepernicious effects of money laundering, the methods and techniques usedin money laundering, the viable means of preventing money launderingandthe effective ways of prosecuting and punishing offenders. The AMLCshallconduct nationwide information campaigns to heighten awareness of thepublicof their civic duty as citizens to report any and all activities whichengender reasonable belief that a money laundering offense underSection 4 of the AMLA is about to be, is being or has been committed.

Sec. 8. Authorityto Issue, Clarify and Amend the Rules and RegulationsImplementingR. A. No. 9160. – The AMLC is authorized under Section s 7 (7), 18and19 of the AMLA to promulgate as well as clarify and/or amend, as may benecessary, these Rules. The AMLC may make appropriate issuances forthispurpose.

Sec. 9. Authorityto Establish Information Sharing System. – Subject to suchlimitationsas provided for by law, the AMLC is authorized under Section 7 (7) oftheAMLA to establish an information sharing system that will enable theAMLCto store, track and analyze money laundering transactions for theresoluteprevention, detection and investigation of money laundering offenses.Forthis purpose, the AMLC shall install a computerized system that will beused in the creation and maintenance of an information database. TheAMLCis also authorized, under Section 7 (9) of the AMLA to enter intomemorandaof agreement with the intelligence units of the Armed Forces of thePhilippines,the Philippine National Police, the Department of Finance, theDepartmentof Justice, as well as their attached agencies, and other domestic ortransnationalgovernmental or non-governmental organizations or groups for sharing ofall information that may, in any way, facilitate the resoluteprevention,investigation and prosecution of money laundering offenses and otherviolationsof the AMLA.

Sec. 10. Authorityto Establish System of Incentives and Rewards. – The AMLC isauthorizedunder Section 15 of the AMLA to establish a system of specialincentivesand rewards to be given to the appropriate government agency and itspersonnelthat led and initiated the investigation, prosecution, and convictionofpersons involved in money laundering offenses under Section 4 of theAMLA.Any monetary reward shall be made payable out of the funds appropriatedby Congress.

Sec. 11. OtherInherent, Necessary, Implied or Incidental Powers. – The AMLC shallperform such other functions and exercise such other powers as may beinherent,necessary, implied or incidental to the functions assigned, and powersgranted, to it under the AMLA for the purpose of carrying out thedeclaredpolicy of the AMLA.

Section 1. MoneyLaundering Offenses and their Corresponding Penalties. – Moneylaunderingis a crime whereby the proceeds of an unlawful activity are transacted,thereby making them appear to have originated from legitimate sources.It is a process comprising of three (3) stages, namely, placement orthephysical disposal of the criminal proceeds, layering or the separationof the criminal proceeds from their source by creating layers offinancialtransactions to disguise the audit trail, and integration or theprovisionof apparent legitimacy to the criminal proceeds. Any transactioninvolvingsuch criminal proceeds or attempt to transact the same during theplacement,layering or integration stage shall constitute the crime of moneylaundering.

(a) When itis committed by a person who, knowing that any monetary instrument orpropertyrepresents, involves, or relates to, the proceeds of any unlawfulactivity,transacts or attempts to transact said monetary instrument or property,the penalty is imprisonment from seven (7) to fourteen (14) years and afine of not less than Three million Philippine pesos (Php3,000,000.00)but not more than twice the value of the monetary instrument orpropertyinvolved in the offense.

(b) Whenitis committed by a person who, knowing that any monetary instrument orpropertyinvolves the proceeds of any unlawful activity, performs or fails toperformany act, as a result of which he facilitates the offense of moneylaunderingreferred to in paragraph (a) above, the penalty is imprisonment fromfour(4) to seven (7) years and a fine of not less than One million fivehundredthousand Philippine pesos (Php1,500,000.00) but not more than ThreemillionPhilippine pesos (Php3,000,000.00).

(c) Whenitis committed by a person who, knowing that any monetary instrument orpropertyis required under this Act to be disclosed and filed with the AMLC,failsto do so, the penalty is imprisonment from six (6) months to four (4)yearsor a fine of not less than One hundred thousand Philippine pesos(Php100,000.00)but not more than Five hundred thousand Philippine pesos(Php500,000.00),or both.

Sec. 2. UnlawfulActivities. - These refer to any act or omission or series orcombinationthereof involving or having relation to the following:

(a)Kidnappingfor ransom under Article of Act No. 3815, the RevisedPenal Code, as amended;
(b)Robberyand extortion under Articles 294, 295, 296, 299, 300, 301 and 302 ofthesame Code;
(c)Qualifiedtheft under Article 310 of the same Code;
(d)Swindlingunder Article 315 of the same Code;
(e)Piracyon the high seas under the same Codeand Presidential Decree (P.D.) No. 532;
(f)Destructivearson and murder as defined under the same Codeand hijacking and other violations under Republic Act (R. A.) No. 6235,including those perpetrated by terrorists against non-combatant personsand similar targets;
(g)Juetengand Masiao punished as illegal gambling under P.D. No. 1602;
(h)Smugglingunder R. A. Nos. 455 and 1937;
(i)Section 3, paragraphs B, C, E, G, H and I of R.A. No. 3019, the Anti-Graft and Corrupt Practices Act, as amended;
(j)Section s3, 4, 5, 7, 8 and 9 of Article Two of R.A. No. 6425, the Dangerous Drugs Act of 1972 as amended;
(k)Plunderunder R. A.No.7080, as amended;
(l)Violations under R.A. No. 8792, the Electronic Commerce ct of 2000;
(m)Fraudulentpractices and other violations under R.A. No. 8799, the Securities Regulation Code of 2000; and
(n)Feloniesor offenses of a similar nature that are punishable under the penallawsof other countries.

Sec. 3. Jurisdictionof Money Laundering Cases. – The Regional Trial Courts shall havethejurisdiction to try all cases on money laundering. Those committed bypublicofficers and private persons who are in conspiracy with such publicofficersshall be under the jurisdiction of the Sandiganbayan.

Sec. 4. Prosecutionof Money Laundering. –

(a) Anypersonmay be charged with and convicted of both the offense of moneylaunderingand the unlawful activity as defined under Section 3 (i) of the AMLA.

(b) Anyproceedingrelating to the unlawful activity shall be given precedence over theprosecutionof any offense or violation under the AMLA without prejudice to theissuanceby the AMLC of a freeze order with respect to the deposit, investmentorsimilar account involved therein and resort to other remedies providedunder the AMLA.

(c)Knowledgeof the offender that any monetary instrument or property represents,involves,or relates to the proceeds of an unlawful activity or that any monetaryinstrument or property is required under the AMLA to be disclosed andfiledwith the AMLC, may be established by direct evidence or inferred fromtheattendant circ*mstances.

(d) Alltheelements of every money laundering offense under Section 4 of the AMLAmust be proved by evidence beyond reasonable doubt, including theelementof knowledge that the monetary instrument or property represents,involvesor relates to the proceeds of any unlawful activity. No element of theunlawful activity, however, including the identity of the perpetratorsand the details of the actual commission of the unlawful activity needbe established by proof beyond reasonable doubt. The elements of theoffenseof money laundering are separate and distinct from the elements of thefelony or offense constituting the unlawful activity.

(e) Nocasefor money laundering may be filed to the prejudice of a candidate foranelectoral office during an election period. However, this prohibitionshallnot constitute a bar to the prosecution of any money laundering casefiledin court before the election period.

(f) TheAMLCmay apply, in the course of the criminal proceedings, for provisionalremediesto prevent the monetary instrument or property subject thereof frombeingremoved, concealed, converted, commingled with other property orotherwiseto prevent its being found or taken by the applicant or otherwiseplacedor taken beyond the jurisdiction of the court. However, no assets shallbe attached to the prejudice of a candidate for an electoral officeduringan election period.

(g) Wherethereis conviction for money laundering under Section 4 of the AMLA, thecourtshall issue a judgment of forfeiture in favor of the Government of thePhilippines with respect to the monetary instrument or property foundtobe proceeds of one or more unlawful activities. However, no assetsshallbe forfeited to the prejudice of a candidate for an electoral officeduringan election period.

(h)Restitutionfor any aggrieved party shall be governed by the provisions of the NewCivil Code.

Section 1. CustomerIdentification Requirements. –

(a) TrueIdentity of Individuals as Clients. Covered institutions shallestablishappropriate systems and methods based on internationally compliantstandardsand adequate internal controls for verifying and recording the true andfull identity of their customers.

For thispurpose,they shall develop clear customer acceptance policies and procedureswhenconducting business relations or specific transactions, such as, butnotlimited to, opening of deposit accounts, accepting deposit substitutes,entering into trust and other fiduciary transactions, renting of safetydeposit boxes, performing remittances and other large cash transactions.

Whendealingwith customers who are acting as trustee, nominee, agent or in anycapacityfor and on behalf of another, covered institutions shall verify andrecordthe true and full identity of the person(s) on whose behalf atransactionis being conducted. Covered institutions shall also establish andrecordthe true and full identity of such trustees, nominees, agents and otherpersons and the nature of their capacity and duties. In case a coveredinstitution has doubts as to whether such persons are being used asdummiesin circumvention of existing laws, it shall immediately make thenecessaryinquiries to verify the status of the business relationship between theparties.

(b) MinimumInformation/Documents required for Individual Customers. Coveredinstitutionsshall require customers to produce original documents of identityissuedby an official authority, preferably bearing a photograph of thecustomer.Examples of such documents are identity cards and passports. Wherepracticable,file copies of documents of identity are to be kept. Alternatively, theidentity card or passport number and/or other relevant details are toberecorded. The following minimum information/documents shall be obtainedfrom individual customers:


(1)Name;
(2)Presentaddress;
(3)Permanentaddress;
(4)Dateand place of birth;
(5)Nationality;
(6)Natureof work and name of employer or nature of self-employment/business;
(7)Contactnumbers;
(8)Taxidentification number, Social Security System number or GovernmentServiceand Insurance System number;
(9)Specimensignature;
(10)Source of fund(s); and
(11)Names of beneficiaries in case of insurance contracts and wheneverapplicable.
(c) MinimumInformation/Documents Required for Corporate and Juridical Entities.Before establishing business relationships, covered institutions shallendeavor to ensure that the customer that is a corporate or juridicalentityhas not been or is not in the process of being, dissolved, wound up orvoided, or that its business or operations has not been or is not intheprocess of being, closed, shut down, phased out, or terminated.Dealingswith shell companies and corporations, being legal entities which haveno business substance in their own right but through which financialtransactionsmay be conducted, should be undertaken with extreme caution. Thefollowingminimum information/documents shall be obtained from customers that arecorporate or juridical entities, including shell companies andcorporations:

(1)Articlesof Incorporation/Partnership;
(2)By-laws;
(3)Officialaddress or principal business address;
(4)Listof directors/partners;
(5)Listof principal stockholders owning at least two percent (2%) of thecapitalstock;
(6)Contactnumbers;
(7)Beneficialowners, if any; and
(8)Verificationof the authority and identification of the person purporting to act onbehalf of the client.


(d) Verificationwithout Face-to-Face Contact. – To the extentand throughsuch means allowed under existing laws and applicable rules andregulationsof the BSP, the SEC and the IC, covered institutions may create newaccountswithout face-to-face contact. However, such new accounts shall not bevalidand effective unless the customer complies with the requirements underthe two (2) immediately preceding subsections and such otherrequirementsthat have been or will be imposed by the BSP, the SEC and the IC, asthecase may be, pursuant to Rule 5 of these Rules and/or their respectivecharters, within ten (10) days from the creation of the new accounts.Unlesssuch requirements have been fully complied with, no transaction shallbehonored by any covered institution respecting an account createdwithoutface-to-face contact.

(e) Acquisitionof Another Covered Institution. – When a covered institutionacquiresthe business of another covered institution, either in whole or as aproductportfolio, it is not necessary for the identity of all existingcustomersto be re-established: Provided, That all customer accountrecordsare acquired with the business and due diligence inquiries do not raiseany doubt as to whether or not the acquired business has fully compliedwith all the requirements under the AMLA and these Rules.

(f) Risk-monitoringand Review. Covered institutions shall adopt programs for on-goingmonitoring of high-risk accounts and risk management, subject to suchrulesand regulations as may be prescribed by the appropriate SupervisingAuthority.Regular reviews of customer base should be undertaken to ensure thatthenature of accounts and potential risks are properly identified,monitoredand controlled.

(g) Prohibitionagainst Certain Accounts. Covered institutions shallmaintainaccounts only in the true name of the account owner or holder. Theprovisionsof existing laws to the contrary notwithstanding, anonymous accounts,accountsunder fictitious names, incorrect name accounts and all other similaraccountsshall be absolutely prohibited.

(h) NumberedAccounts. Peso and foreign currency non-checking numbered accountsshall be allowed: Provided, That the true identity of thecustomeris satisfactorily established based on official and other reliabledocumentsand records, and that the information and documents required underSection 1 (b) and (c) of Rule 5 of these Rules are obtained and recorded by thecovered institution. The BSP may conduct annual testing for thepurpose of determining the existence and true identity of the owners ofsuch accounts.

Sec. 2. RecordkeepingRequirements. – Covered transactions shall prepare and maintaindocumentationon their customer accounts, relationships and transactions such thatanyaccount, relationship or transaction can be so reconstructed as toenablethe AMLC, the law enforcement and prosecutorial authorities, and/or thecourts to establish an audit trail for money laundering.

(a) Existingand New Accounts and New Transactions. All records of existing andnew accounts and of new transactions shall be maintained and safelystoredfor five (5) years from October 17, 2001 or from the dates of theaccountsor transactions, whichever is later.

(b) ClosedAccounts. With respect to closed accounts, the records on customeridentification, account files and business correspondence shall bepreservedand safely stored for at least five (5) years from the dates when theywere closed.

(c) Retentionof Records in Case a Money Laundering Case Has Been Filed in Court. – Ifa money laundering case based on any record kept by the coveredinstitutionconcerned has been filed in court, said file must be retained beyondtheperiod stipulated in the two (2) immediately preceding subsections, asthe case may be, until it is confirmed that the case has been finallyresolvedor terminated by the court.

(d) Formof Records. – Records shall be retained as originals or certifiedtruecopies on paper, microfilm or electronic form: Provided, Thatsuch forms are admissible in court pursuant to existing laws and theapplicablerules promulgated by the Supreme Court.

(e) Penaltiesfor Failure to Keep Records. The penalty of imprisonment from six(6)months to one (1) year or a fine of not less than One hundred thousandPhilippine pesos (Php100,000.00) but not more than Five hundredthousandPhilippine pesos (Php500,000.00), or both, shall be imposed on a personconvicted for a violation of Section 9 (b) of the AMLA.

Sec. 3.Money Laundering Prevention Programs. – Covered institutionsshallformulate their respective money laundering prevention programs inaccordancewith Section 9 and other pertinent provisions of the AMLA and Section s1 and 2 of Rules 3 and 4 and other pertinent provisions of these Rules,subject to such guidelines as may be prescribed by the SupervisingAuthorityand approved by the AMLC. Every covered institution shall submit itsownmoney laundering program to the Supervising Authority concerned withina non-extendible period of sixty (60) days from the date of effectivityof these Rules.

Every moneylaundering program shall establish detailed procedures implementing acomprehensive,institution-wide "know-your-client" policy, set-up an effectivedisseminationof information on money laundering activities and their prevention,detectionand reporting, adopt internal policies, procedures and controls,designatecompliance officers at management level, institute adequate screeningandrecruitment procedures, and set-up an audit function to test the system.

Covered institutionsshall adopt, as part of their money laundering programs, a system offlaggingand monitoring transactions that qualify as covered transactions exceptthat they involve amounts below the threshold to facilitate the processof aggregating them for purposes of future reporting of suchtransactionsto the AMLC when their aggregated amounts breach the threshold. Coveredinstitutions not subject to account secrecy laws shall incorporate intheirmoney laundering programs the provisions of Section 1, Rule 3 of theseRules and such other guidelines for the voluntary reporting to the AMLCof all transactions that engender the reasonable belief that a moneylaunderingoffense is about to be, is being, or has been committed.

Sec. 4. Trainingof Personnel. – Covered institutions shall provide all theirresponsibleofficers and personnel with efficient and effective training andcontinuingeducation programs to enable them to fully comply with all theirobligationsunder the AMLA and these Rules.

Section 1.Civil Forfeiture. - When there is a covered transaction reportmade,and the court has, in a petition filed for the purpose ordered seizureof any monetary instrument or property, in whole or in part, directlyorindirectly, related to said report, the Revised Rules of Court on civilforfeiture shall apply. However, no assets shall be forfeited to theprejudiceof a candidate for an electoral office during an election period.

Sec. 2. Claimon Forfeited Assets. - Where the court has issued an order offorfeitureof the monetary instrument or property in a criminal prosecution foranymoney laundering offense under Section 4 of the AMLA, the offender oranyother person claiming an interest therein may apply, by verifiedpetition,for a declaration that the same legitimately belongs to him and forsegregationor exclusion of the monetary instrument or property correspondingthereto.The verified petition shall be filed with the court which rendered thejudgment of conviction and order of forfeiture, within fifteen (15)daysfrom the date of the order of forfeiture, in default of which the saidorder shall become final and executory. This provision shall apply inbothcivil and criminal forfeiture.

Sec. 3. Paymentin lieu of Forfeiture. - Where the court has issued an order offorfeitureof the monetary instrument or property subject of a money launderingoffenseunder Section 4 of the AMLA, and said order cannot be enforced becauseany particular monetary instrument or property cannot, with duediligence,be located, or it has been substantially altered, destroyed, diminishedin value or otherwise rendered worthless by any act or omission,directlyor indirectly, attributable to the offender, or it has been concealed,removed, converted or otherwise transferred to prevent the same frombeingfound or to avoid forfeiture thereof, or it is located outside thePhilippinesor has been placed or brought outside the jurisdiction of the court, orit has been commingled with other monetary instruments or propertybelongingto either the offender himself or a third person or entity, therebyrenderingthe same difficult to identify or be segregated for purposes offorfeiture,the court may, instead of enforcing the order of forfeiture of themonetaryinstrument or property or part thereof or interest therein, accordinglyorder the convicted offender to pay an amount equal to the value ofsaidmonetary instrument or property. This provision shall apply in bothciviland criminal forfeiture.

Section 1. Requestfor Assistance from a Foreign State. - Where a foreign state makesa request for assistance in the investigation or prosecution of a moneylaundering offense, the AMLC may execute the request or refuse toexecutethe same and inform the foreign state of any valid reason for notexecutingthe request or for delaying the execution thereof. The principles ofmutualityand reciprocity shall, for this purpose, be at all times recognized.

Sec. 2. Powersof the AMLC to Act on a Request for Assistance from a Foreign State.- The AMLC may execute a request for assistance from a foreign stateby:(a) tracking down, freezing, restraining and seizing assets alleged tobe proceeds of any unlawful activity under the procedures laid down inthe AMLA and in these Rules; (b) giving information needed by theforeignstate within the procedures laid down in the AMLA and in these Rules;and(c) applying for an order of forfeiture of any monetary instrument orpropertyin the court: Provided, That the court shall not issue such anorderunless the application is accompanied by an authenticated copy of theorderof a court in the requesting state ordering the forfeiture of saidmonetaryinstrument or property of a person who has been convicted of a moneylaunderingoffense in the requesting state, and a certification or an affidavit ofa competent officer of the requesting state stating that the convictionand the order of forfeiture are final and that no further appeal liesinrespect of either.

Sec. 3. ObtainingAssistance From Foreign States. - The AMLC may make a request toanyforeign state for assistance in (a) tracking down, freezing,restrainingand seizing assets alleged to be proceeds of any unlawful activity; (b)obtaining information that it needs relating to any coveredtransaction,money laundering offense or any other matter directly or indirectlyrelatedthereto; (c) to the extent allowed by the law of the foreign state,applyingwith the proper court therein for an order to enter any premisesbelongingto or in the possession or control of, any or all of the persons namedin said request, and/or search any or all such persons named thereinand/orremove any document, material or object named in said request: Provided,That the documents accompanying the request in support of theapplicationhave been duly authenticated in accordance with the applicable law orregulationof the foreign state; and (d) applying for an order of forfeiture ofanymonetary instrument or property in the proper court in the foreignstate:Provided, That the request is accompanied by an authenticatedcopyof the order of the Regional Trial Court ordering the forfeiture ofsaidmonetary instrument or property of a convicted offender and anaffidavitof the clerk of court stating that the conviction and the order offorfeitureare final and that no further appeal lies in respect of either.

Sec. 4. Limitationson Requests for Mutual Assistance. - The AMLC may refuse to complywith any request for assistance where the action sought by the requestcontravenes any provision of the Constitution or the execution of arequestis likely to prejudice the national interest of the Philippines, unlessthere is a treaty between the Philippines and the requesting staterelatingto the provision of assistance in relation to money laundering offenses.

Sec. 5. Requirementsfor Requests for Mutual Assistance from Foreign States. - A requestfor mutual assistance from a foreign state must (a) confirm that aninvestigationor prosecution is being conducted in respect of a money launderer namedtherein or that he has been convicted of any money laundering offense;(b) state the grounds on which any person is being investigated orprosecutedfor money laundering or the details of his conviction; (c) givesufficientparticulars as to the identity of said person; (d) give particularssufficientto identify any covered institution believed to have any information,document,material or object which may be of assistance to the investigation orprosecution;(e) ask from the covered institution concerned any information,document,material or object which may be of assistance to the investigation orprosecution;(f) specify the manner in which and to whom said information, document,material or object obtained pursuant to said request, is to beproduced;(g) give all the particulars necessary for the issuance by the court inthe requested state of the writs, orders or processes needed by therequestingstate; and (8) contain such other information as may assist in theexecutionof the request.

Sec. 6. Authenticationof Documents. - For purposes of Section 13 of the AMLA and Rule 7ofthese Rules, a document is authenticated if the same is signed orcertifiedby a judge, magistrate or equivalent officer in or of, the requestingstate,and authenticated by the oath or affirmation of a witness or sealedwithan official or public seal of a minister, secretary of state, orofficerin or of, the government of the requesting state, or of the personadministeringthe government or a department of the requesting territory,protectorateor colony. The certificate of authentication may also be made by asecretaryof the embassy or legation, consul general, consul, vice consul,consularagent or any officer in the foreign service of the Philippinesstationedin the foreign state in which the record is kept, and authenticated bythe seal of his office.

Sec. 7. Extradition.– The Philippines shall negotiate for the inclusion of money launderingoffenses as defined under Section 4 of the AMLA among the extraditableoffenses in all future treaties.

Section 1. Amendments.– These Rules or any portion thereof may be amended by unanimous voteofthe members of the AMLC and approved by the Congressional OversightCommitteeas provided for under Section 19 of the AMLA.

Sec. 2. Effectivity.– These Rules shall take effect after its approval by the CongressionalOversight Committee and fifteen (15) days after the completion of itspublicationin the Official Gazette or in a newspaper of generalcirculation.