ANTI-MONEY LAUNDERING ACT OF 2001
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ANTI-MONEY LAUNDERING ACT OF 2001
Republic Act No. 9160
September 29, 2001
Case Overview and Summary
Summary of the Anti-Money Laundering Act of 2001 (Republic Act No. 9160)Declaration of Policy (Section 2)
- Protect the integrity and confidentiality of bank accounts
- Ensure the Philippines is not used as a money laundering site
- Extend cooperation in transnational investigations and prosecutions of money laundering activities
Definitions (Section 3)
- Covered Institutions: Banks, non-banks, quasi-banks, trust entities, insurance companies, securities dealers, brokers, investment houses, mutual funds, pre-need companies, foreign exchange corporations, money changers, and other similar entities supervised or regulated by BSP, Insurance Commission, or SEC.
- Covered Transaction: Single, series, or combination of transactions involving more than PHP 4,000,000 or equivalent foreign currency within 5 consecutive banking days, except those with identified clients and commensurate with their business or financial capacity, or those with legal or trade obligations.
- Monetary Instrument: Coins, currency, drafts, checks, notes, securities, negotiable instruments, bonds, commercial papers, deposit certificates, trust certificates, custodial receipts, deposit substitute instruments, trading orders, transaction tickets, confirmations of sale or investments, and other similar instruments.
- Unlawful Activity: Includes kidnapping for ransom, violations of the Dangerous Drugs Act, Anti-Graft and Corrupt Practices Act, plunder, robbery, extortion, illegal gambling, piracy, qualified theft, swindling, smuggling, violations of the Electronic Commerce Act, hijacking, destructive arson, murder by terrorists, violations of the Securities Regulation Code, and similar felonies or offenses punishable under the penal laws of other countries.
Money Laundering Offense (Section 4)
- Transacting or attempting to transact monetary instruments or property representing proceeds of unlawful activity
- Facilitating the offense of money laundering
- Failing to disclose and file required monetary instruments or property with the Anti-Money Laundering Council (AMLC)
Jurisdiction and Prosecution (Sections 5 and 6)
- Regional trial courts have jurisdiction over money laundering cases, while the Sandiganbayan has jurisdiction over cases involving public officers and private persons in conspiracy with public officers.
- A person can be charged and convicted of both money laundering and the unlawful activity.
- Proceedings related to the unlawful activity shall take precedence over the prosecution of money laundering offenses.
Anti-Money Laundering Council (AMLC) (Section 7)
- Composed of the Governor of BSP (Chairman), Commissioner of Insurance Commission, and Chairman of SEC
- Functions include receiving covered transaction reports, determining true identities of owners, instituting civil forfeiture proceedings, filing complaints for prosecution, investigating covered transactions and money laundering activities, freezing monetary instruments or property, implementing anti-money laundering measures, receiving requests for assistance from foreign states, developing educational programs, and enlisting assistance from government agencies.
Secretariat (Section 8)
- AMLC is authorized to establish a secretariat headed by an Executive Director appointed for a 5-year term.
- Executive Director must be a member of the Philippine Bar, at least 35 years old, of good moral character, and have served for at least 5 years in BSP, Insurance Commission, or SEC.
Prevention of Money Laundering (Section 9)
- Customer Identification: Covered institutions must establish and record the true identity of clients based on official documents, maintain a system for verifying client identities, and prohibit anonymous accounts, accounts under fictitious names, and similar accounts.
- Record Keeping: Covered institutions must maintain and safely store records of all transactions for 5 years from the date of transactions, and records of closed accounts for at least 5 years from the date of closure.
- Reporting of Covered Transactions: Covered institutions must report all covered transactions to the AMLC within 5 working days or a longer period prescribed by the Supervising Authority, not exceeding 10 working days.
Authority to Freeze (Section 10)
- AMLC may issue a freeze order effective immediately on any deposit or similar account related to an unlawful activity for a period not exceeding 15 days, with notice to the depositor.
- The depositor has 72 hours to explain why the freeze order should be lifted, and the AMLC has 72 hours to dispose of the explanation.
- The 15-day freeze order may be extended by court order.
Authority to Inquire into Bank Deposits (Section 11)
- AMLC may inquire into or examine any deposit or investment with any banking or non-bank financial institution upon court order in cases of violation of this Act, where there is probable cause that the deposits or investments are related to a money laundering offense.
Forfeiture Provisions (Section 12)
- Civil Forfeiture: When there is a covered transaction report and the court orders seizure of any monetary instrument or property related to the report, the Revised Rules of Court on civil forfeiture shall apply.
- Claim on Forfeited Assets: Any person claiming an interest in the forfeited monetary instrument or property may apply for a declaration that it legitimately belongs to them and for segregation or exclusion within 15 days from the order of forfeiture.
- Payment in Lieu of Forfeiture: If the monetary instrument or property cannot be located, has been altered, destroyed, diminished in value, concealed, removed, converted, transferred, or commingled, the court may order the convicted offender to pay an amount equal to the value of the monetary instrument or property.
Mutual Assistance among States (Section 13)
- Request for Assistance from a Foreign State: AMLC may execute or refuse a request for assistance in the investigation or prosecution of a money laundering offense from a foreign state, based on the principles of mutuality and reciprocity.
- Power of AMLC to Act on a Request: AMLC may execute a request by tracking down, freezing, restraining, and seizing assets; providing information; and applying for an order of forfeiture of monetary instruments or property.
- Obtaining Assistance from Foreign States: AMLC may request assistance from foreign states in tracking down, freezing, restraining, and seizing assets; obtaining information; applying for an order to enter premises and search persons; and applying for an order of forfeiture of monetary instruments or property.
- Limitations on Request for Mutual Assistance: AMLC may refuse to comply with a request that contravenes the Constitution or is likely to prejudice the national interest, unless there is a treaty between the Philippines and the requesting state.
- Requirements for Requests from Foreign States: Requests must confirm an investigation or prosecution is being conducted or that a person has been convicted, state the grounds for investigation or prosecution, provide sufficient particulars of the person's identity, identify any covered institution believed to have relevant information, specify the manner of production of information, and provide necessary particulars for the issuance of writs, orders, or processes.
- Authentication of Documents: Documents must be signed or certified by a judge, magistrate, or equivalent officer in the requesting state, and authenticated by the oath or affirmation of a witness or sealed with an official or public seal.
- Extradition: The Philippines shall negotiate for the inclusion of money laundering offenses as extraditable offenses in future treaties.
Penal Provisions (Section 14)
- Penalties for the Crime of Money Laundering:
- 7 to 14 years imprisonment and a fine of not less than PHP 3,000,000 but not more than twice the value of the monetary instrument or property involved for offenses under Section 4(a)
- 4 to 7 years imprisonment and a fine of not less than PHP 1,500,000 but not more than PHP 3,000,000 for offenses under Section 4(b)
- 6 months to 4 years imprisonment or a fine of not less than PHP 100,000 but not more than PHP 500,000, or both, for offenses under Section 4(c)
- Penalties for Failure to Keep Records: 6 months to 1 year imprisonment or a fine of not less than PHP 100,000 but not more than PHP 500,000, or both, for offenses under Section 9(b).
- Malicious Reporting: 6 months to 4 years imprisonment and a fine of not less than PHP 100,000 but not more than PHP 500,000, without probation, for malicious or bad faith reporting of unwarranted or false information.
- Breach of Confidentiality: 3 to 8 years imprisonment and a fine of not less than PHP 500,000 but not more than PHP 1,000,000 for violations under Section 9(c).
System of Incentives and Rewards (Section 15)
- A system of special incentives and rewards is established for the appropriate government agency and its personnel that led and initiated an investigation, prosecution, and conviction of persons involved in money laundering offenses.
Prohibitions Against Political Harassment (Section 16)
- The Act shall not be used for political prosecution or harassment or as an instrument to hamper competition in trade and commerce.
- No case for money laundering may be filed against, and no assets shall be frozen, attached, or forfeited to the prejudice of a candidate for an electoral office during an election period.
Restitution (Section 17)
- Restitution for any aggrieved party shall be governed by the provisions of the New Civil Code.
Implementing Rules and Regulations (Section 18)
- BSP, Insurance Commission, and SEC shall promulgate the rules and regulations to implement the Act within 30 days from its effectivity, subject to approval by the Congressional Oversight Committee.
- Covered institutions shall formulate their respective money laundering prevention programs in accordance with the Act.
Congressional Oversight Committee (Section 19)
- A Congressional Oversight Committee composed of 7 members from the Senate and 7 members from the House of Representatives is created.
- The Committee shall oversee the implementation of the Act and review or revise the implementing rules issued by the AMLC within 30 days from their promulgation.
Appropriations Clause (Section 20)
- AMLC shall be provided with an initial appropriation of PHP 25,000,000 to be drawn from the national government.
- Appropriations for succeeding years shall be included in the General Appropriations Act.
Separability Clause (Section 21)
- If any provision or section of the Act is held invalid, the other provisions or sections shall not be affected.
Repealing Clause (Section 22)
- All laws, decrees, executive orders, rules and regulations, including relevant provisions of Republic Act No. 1405, Republic Act No. 6426, Republic Act No. 8791, and other similar laws, that are inconsistent with this Act are hereby repealed, amended, or modified accordingly.
Effectivity (Section 23)
- The Act shall take effect 15 days after its complete publication in the Official Gazette or in at least two national newspapers of general circulation.
- The provisions of the Act shall not apply to deposits and investments made prior to its effectivity.
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ANTI-MONEY LAUNDERING ACT OF 2001
Republic Act No. 9160
•September 29, 2001
Congress of the Philippines
Twelfth Congress
REPUBLIC ACT NO. 9160 September 29, 2001
AN ACT DEFINING THE CRIME OF MONEY LAUNDERING, PROVIDING PENALTIES THEREFOR AND FOR OTHER PURPOSES
Be it enacted by the Senate and House of Representatives of the Philippines in Congress assembled:
Section 1. Short Title. – This Act shall be known as the "Anti-Money Laundering Act of 2001."
Section 2. Declaration of Policy. – It is hereby declared the policy of the State to protect and preserve the integrity and confidentiality of bank accounts and to ensure that the Philippines shall not be used as a money laundering site for the proceeds of any unlawful activity. Consistent with its foreign policy, the State shall extend cooperation in transnational investigations and prosecutions of persons involved in money laundering activities whenever committed.
Section 3. Definitions. For purposes of this Act, the following terms are hereby defined as follows:
(a) "Covered Institution" refers to:
(1) banks, non-banks, quasi-banks, trust entities, and all other institutions and their subsidiaries and affiliates supervised or regulated by the Bangko...
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