“Corruption is a source of laundered funds, and smuggling, particularly bulk cash smuggling, is a

major problem” 

Monitoring of money laundering in the Philippines is weak as the government is faced with limited

human and financial resources, according to the latest annual US State Department Report on Terrorism.

It said the Philippines should pass the pending bill on anti-money laundering. In addition, the

country should seek to include casinos in the proposed list of covered institutions. Casinos currently are

not covered under the Anti-Money Laundering Act (AMLA), and the laws surrounding online gaming are

even less clear.

While the government of the Philippines has made notable progress in enacting legislation and

issuing regulations, limited human and financial resources constrain tighter monitoring and enforcement.

In June 2012, the Philippines enacted legislation to address some noted major deficiencies. The

changes authorize the Anti-Money Laundering Council (AMLC) to apply to the courts for ex-parte inquiry

into deposits and investments in relation to all unlawful activities enumerated under the AMLA.

Money Laundering is a crime whereby the proceeds of an unlawful activity as

defined in the AMLA are transacted or attempted to be transacted to make them

appear to have originated from legitimate sources.

Republic Act No. 9160 otherwise known as The Anti-Money Laundering

Act of 2001 was signed into law on September 29, 2001 and took effect on October

17, 2001. The implementing Rules and Regulations took effect on April 2, 2002. On

March 7, 2003, R.A. No. 9194 (An Act Amending R.A. No. 9160) was signed into law

and took effect on March 23, 2003. The revised Implementing Rules and

Regulations took effect on September 7, 2003.

The Philippines, while striving to sustain economic development

and poverty alleviation through, among others, corporate governance and public

office transparency, must contribute its share and play a vital role in the global fight

against money laundering. Hence, the compelling need to enact responsive anti-

money laundering legislation in order to establish and strengthen an anti-money

laundering regime in the country which will not only increase investor’s confidence

but also ensure that the Philippines is not used as a site to launder proceeds of

unlawful activities.

Money Laundering Offenses and Penalties:

1. Knowingly transacting or attempting to transact any monetary

instrument/property which represents, involves or relates to the proceeds of an

unlawful activity. Penalty is 7 to 14 years imprisonment and a fine of not less than

P3M but not more than twice the value of the monetary instrument/property.

2. Knowingly performing or failing to perform an act in relation to any monetary

instrument/property involving the proceeds of any unlawful activity as a result of

which he facilitated the offense of money laundering. Penalty is 4 to 7 years

imprisonment and a fine of not less than P1.5M but not more than P3M.

3. Knowingly failing to disclose and file with the AMLC any monetary

instrument/property required to be disclosed and filed. Penalty is 6 months to 4

years imprisonment or a fine of not less than P100,000 but not more than P500,000,

or both.

Unlawful Activity is the offense which generates dirty money or property. It

is commonly called the predicate crime. It refers to any act or omission or series or

combination thereof involving or having direct relation to the following:

Predicate Crimes/Unlawful Activities

1. Kidnapping for ransom

2. Drug trafficking and related offenses

3. Graft and corrupt practices

4. Plunder

5. Robbery and Extortion

6. Jueteng and Masiao

7. Piracy

8. Qualified theft

9. Swindling

10. Smuggling

11. Violations under the Electronic Commerce Act of 2000

12. Hijacking; destructive arson; and murder, including those perpetrated by

terrorists against non-combatant persons and similar targets

13. Fraudulent practices and other violations under the Securities Regulation Code

of 2000

14. Felonies or offenses of a similar nature that are punishable under the penal laws

of other countries.

15. Terrorism financing and organizing or directing others to commit terrorism

financing (R.A. 10168).

16. Attempt/conspiracy to commit terrorism financing and organizing or directing

others to commit terrorism financing (R.A. 10168).

17. Attempt/conspiracy to commit dealing with property or funds of designated

person.

18. Accomplice to terrorism financing or conspiracy to commit terrorism financing.

19. Accessory to terrorism financing.

Covered Institutions are those mandated by the AMLA to submit covered and

suspicious transaction reports to the AMLC.

These are:

1. Banks and all other entities, including their subsidiaries and affiliates, supervised

and regulated by the Bangko Sentral ng Pilipinas

2. Insurance companies, pre-need companies and all other institutions supervised or

regulated by the Insurance Commission

3. Securities dealers and other entities supervised or regulated by the Securities

and Exchange Commission.

Covered & Suspicious Transactions:

1. Covered transactions are single transactions in cash or other equivalent

monetary instrument involving a total amount in excess of Five Hundred Thousand

(P500,000) Pesos within one (1) banking day

2. Suspicious transactions are transactions with covered institutions, regardless of

the amounts involved, where any of the following circumstances exists:

3. There is no underlying legal/trade obligation, purpose or economic justification;

the client is not properly identified;

4. The amount involved is not commensurate with the business or financial capacity

of the client;

5. The transaction is structured to avoid being the subject of reporting requirements

under the AMLA;

6. There is a deviation from the client’s profile/past transactions;

7. The transaction is related to an unlawful activity/offense under the AMLA;

and transactions similar or analogous to the above.

Freezing of Monetary Instrument or Property

The AMLC may file before Court of Appeals, before the verified

application ex parte (without notice to the other party) after determination that

probable cause exists that any monetary instrument or property is in any way

related to an unlawful activity. The freeze order shall be effective immediately. The

freeze order shall be for a period of 20 days unless extended by the court.

Authority to Inquire into Bank Deposits

The AMLC may inquire into or examine any particular deposit or

investment with any banking institution or non-bank financial institution upon order

of any competent court in cases of violation of the AMLA when it has been

established that there is probable cause that the deposits or investments involved

are in any way related to a money laundering offense.

In order to implement its continued commitment and support of the global fight

against money laundering, the BSP has issued a number of measures to bring the

Philippines' regulatory regime on money laundering closer to international

standards. In September 2001, the Anti-Money Laundering Act (AMLA) of 2001 was

passed under Republic Act No. 9160. The legislation, among others, defines money

laundering as a criminal offense, prescribes penalties for such crimes committed

and forms the foundation of a central monitoring and implementing council called

the Anti-Money Laundering Council (AMLC). To combat money laundering, this law

imposes requirements on customer identification, record keeping, reporting of

covered and suspicious transactions, relaxes strict bank deposit secrecy laws, and

provides for freezing/seizure/forfeiture/recovery of dirty money/property as well as

for international cooperation.

The AMLC is comprised of three (3) members: the Governor of the Bangko Sentral

ng Pilipinas as the Chairman and the other two (2) members are the Commissioner

of the Insurance Commission and the Chairman of the Securities and Exchange

Commission. It acts unanimously in the discharge of its functions. AMLC is also

referred to as the country’s Financial Intelligence Unit (FIU) and is assisted by a

Secretariat, otherwise known as the AMLC Secretariat (AMLCS), headed by an

Executive Director.

To address concerns such as the high threshold level for covered

transactions, the coverage of “covered institutions” and the existing Bank Secrecy

Law, the amendments to the AMLA were signed into law on 7 March 2003 under

Republic Act No. 9194. The amendments included the following: a) lowering the

threshold for covered transactions from P4.0 million to P500,000; b) authorizing the

BSP to inquire or examine any deposit or investment with any banking institution

without court order in the course of a periodic or special examination; and c)

removing the provision prohibiting the retroactivity of the law.

Said amendments were given favorable consideration by the Financial Action

Task Force (FATF) and sanctions were not imposed on the Philippines. However, the

Philippines at that time remained in the list of non-cooperative countries and

territories (NCCTs) of the FATF and the country’s removal from the list will be

determined by the FATF after close monitoring of the implementation issues. The

Philippines was finally removed from the NCCT list of the FATF in February 2005 due

to excellent progress made in combating money laundering and terrorist financing.

The Revised Implementing Rules and Regulations (RIRR) on the AMLA of

2001, as amended, was approved by the Congressional Oversight Committee on 6

August 2003 and was implemented on 3 September 2003.

Second AMLA Amendment under RA 10167 – June 2012

To further strengthen the country’s AML regime and address the concerns of the

FATF, second AMLA amendment under RA 10167 was signed into law on 18 June

2012 amending for the purpose Sections 10 and 11 of the AMLA, as amended.

Section 10 relates to the “Freezing of Monetary Instrument” wherein upon verified

“ex parte” petition by the AMLC, the Court of Appeals (CA) should act on the

petition to freeze within twenty-four (24) hours from filing of the petition, and the

freeze order shall be for a period of twenty (20) days unless extended by the

Court/CA.

Section 11 relates to the “Authority to Inquire into Bank Deposits”

wherein the AMLC is given authority to examine bank accounts “upon order of any

competent court based on an ex parte application” which effectively expanded the

instances when no such court application is required. Said provision simply means

that the court may allow the AMLC to look into bank deposit accounts of suspected

money launderers without notifying them. Under this Section, the CA is directed to

act on the application to inquire into or examine any deposit or investment account

within twenty-four (24) hours from date of filing of the application. In addition,

although Section 11 of the AMLA reworded the authority of BSP to check the

compliance in the course of a periodic or special examination of a covered

institution with the requirements of the AMLA and its implementing rules and

regulations, the sponsoring Senator when asked if the BSP, without court order, may

be allowed to look into specific accounts under the proviso, Senator Guingona said

that it is only to ensure compliance with AMLA.

These two amended provisions recognized the urgency of the issuance

of the freeze order and the grant of authority to AMLC to conduct bank inquiry

within 24 hours from the filing of the petition.

This AMLA amendment under RA 10167 resulted to favorable action of

the FATF where it decided to upgrade the country's “dark gray” list to “gray”, which

is just one notch away from being taken out in the FATF list of nations considered

non-compliant to global AML standards.

After the passage of RA 10167, the Revised Implementing Rules and

Regulations (RIRR) was approved under AMLC Resolution No. 84 dated 23 August

2012. BSP disseminated said RIRR to all BSP covered institutions under BSP Circular

Letter No. CL-2012-068 dated 20 September 2012.

As continuing commitment to comply with FATF AML/CFT standards, the third AMLA

amendment under RA 10365 was passed into law on 15 February 2013 that covered

the following major amendments:

1. Expansion of the definition of the crime of money laundering: AMLC can now go

after persons who engage in the conversion, transfer, movement, disposal of,

possession, use, and concealment or disguise, of the monetary proceeds of an

unlawful activity, that was previously limited to the transaction of laundered funds

and property;

2. Inclusion of jewelry dealers in precious metals and stones whose transactions are

in excess of P1,000,000 and company service providers as defined and listed under

RA 10365, are now included as “Covered Persons”;

3. Increase of unlawful activities to money laundering from 14 to 34. The 20

additional crimes include trafficking in persons, bribery, counterfeiting, fraud and

other illegal exactions, forgery, malversation, various environmental crimes, and

terrorism and its financing;

4. Authorize the AMLC to require the Land Registration Authority and all its Register

of Deeds to submit report to the AMLC covering real estate transactions in excess of

P500,000.00;

5. Issuance of freeze order by the Court is now valid for a maximum period of six (6)

months, from the previous twenty (20) days validity under RA 10167.

Compliance with FATF International Standards

In November 2003, the Philippines’ amendments to the AMLA were

evaluated by the FATF and were found to be at par with international standards. On

11 February 2005, the Philippines, Cook Islands, and Indonesia were removed from

the list of NCCTs during the meeting of the FATF. After the country’s delisting from

the list of NCCT’s, the AMLC of the Philippines was accepted as one of seven new

members of the Egmont Group, the global network of FIUs against money

laundering and terrorist financing, making the Philippines an equal partner in the

global fight against money laundering and terrorist financing. Membership to the

Egmont Group means affording AMLC free and unlimited access to a wealth of

financial data contained in the databases of all the FIU-members of the group. All

information exchanged by FIUs are subjected to strict controls and safeguards to

ensure it is used only in an authorized manner, consistent with national provisions

on privacy and data protection.

The recent AMLA amendments under RA 10167 and RA 10365 are

testament of the Philippine’s serious commitment to further strengthen the

country’s AML regime and to address the weaknesses noted by the FATF in the

Philippine’s legal framework with regard to AML. Passage of these laws were

officially recognized and favorably considered by the FATF that are now in

substantial compliance with its AML/CFT international standards. Thus, FATF in its

February 2013 plenary meeting, shielded the Philippines from being blacklisted

again.

Other AML Initiatives Undertaken by BSP to Further Strengthen the

Country’s AML Regime

Since 2000, the BSP continued to firmly undertake several initiatives on how to

safeguard the Philippine banking system through constant reshaping of existing

AML preventive measures and implementation of appropriate policies at par with

global standards such as the following initiatives.

1. Creation of the Anti-Money Laundering Specialist Group (AMLSG) within

the Supervision and Examination Sector (SES

The AMLSG was created on 13 December 2007 under MB Resolution No. 1443 to

address the need for technical expertise in the supervision of AML activities of

banks and non-bank financial institutions (NBFIs) under the supervision and

regulation of the BSP. The Group became fully operational in November 2008 and

currently has 34 authorized plantilla positions. It is under the direct supervision of

the Managing Director, Supervision and Examination Subsector I, SES.

AMLSG aims to be BSP's core unit of highly competent, dynamic and ethical

professionals who work to ensure financial institutions (FIs) adopt and maintain

adequate and effective policies, systems and procedures that prevent them from

being used to support the laundering of proceeds from any unlawful activity. AMLSG

is tasked to develop relevant guidelines and regulations to support and guide the

AML efforts of financial institutions supervised by the BSP, ensure the effective

implementation of said policies through examination services and technical

assistance to the SES and enhance the related technical skills of the SES human

resource pool through training. In addition, AMLSG shall perform off-site monitoring

to identify those FIs whose operations present an elevated risk of money laundering

activities. AMLSG works closely with the AMLC Secretariat and various banking and

non-bank industry associations under the regulatory ambit of the BSP to foster

domestic cooperation.

Since 2008, AMLSG has conducted several AML onsite examinations, particularly

commercial banks due to their significant assets size and complex banking

activities. The Group was also principally involved in the crafting of AML rules and

regulations, such as the issuance of Circular 706 dated 5 January 2011 and the

adoption on 2 March 2012 of the AML Risk Rating System, that are discussed below.

2. Issuance of a consolidated AML regulations under BSP Circular No. 706

dated 5 January 2012, otherwise known as the Updated AML Rules and

Regulations (UARR)

UARR was issued for the purpose of consolidating all existing BSP circulars, circular

letters and other issuances related to AML. Likewise, it enhances the

implementation of the existing AML legal framework to better conform with

international standards as well as address the deficiencies noted by the joint team

of assessors from the World Bank and Asia Pacific Group on Money Laundering

during the mutual evaluation of the country in 2008.

The UARR applies to all covered institutions supervised and regulated by the BSP

including Banks, Offshore banking units, quasi banks, trust entities, non-stock

savings and loan associations, pawnshops, foreign exchange dealers, money

changers and remittance agents, electronic money issuers including their

subsidiaries and affiliates wherever they may be located.

In addition to the usual provisions on customer identification/KYC, covered and

suspicious transaction reporting and record keeping and retention requirements

that are found in the AMLA-RIRR, the UARR emphasizes the incorporation of a sound

risk management system to ensure that risks associated with money laundering and

terrorist financing are identified, assessed, monitored, mitigated and controlled by

covered institutions. A sound risk management system includes adequate and

active Board and Senior Management oversight, acceptable policies and procedures

embodied in a Money Laundering and Terrorist Financing Prevention Program

(MLPP), appropriate monitoring and Management Information System and

comprehensive internal controls and audit.

UARR encourages covered institutions to formulate a risk-based and tiered

customer acceptance and retention policies, adoption of a criteria for assessing

customers as low, normal and high risk and standards for applying reduced,

average and enhanced due diligence. It also mandates observance of extreme

caution and vigilance in dealing with high risk customers such as shell companies.

The UARR also strongly supports the Financial Inclusion advocacy promoted by the

BSP. For instance, it allows a) the outsourcing of the conduct of face-to-face contact

as well as the gathering of the KYC documents and information to establish the

identity of a customer; b) acceptance of one (1) valid ID for the conduct of financial

transactions, listing for this purpose a wide variety of acceptable IDs and the

utilization of the covered institution’s own technology to take the photo of their

customers in case the ID presented is non-photo-bearing such as TIN, barangay and

DSWD certification; and c) the third-party reliance is likewise introduced in the

UARR to avoid duplication of customer identification processes so that covered

institutions may refocus their resources to better serve and address the needs of

customers. This principle allows a covered institution such as a Bank to rely on the

KYC conducted by another covered institution.

UARR further provides that any violations of existing provisions thereof shall

constitute a major violation, that may subject the bank, its directors, officers and

staff to enforcement actions such as monetary and non-monetary penalties. The

enforcement actions shall may be imposed on the basis of the overall assessment of

a covered institution’s AML compliance system, and if found to be grossly

inadequate, such may be considered as unsafe and unsound banking practice that

may warrant initiation of prompt corrective action.

3. Adoption of AML Risk Rating System (ARRS)

No. 362 dated 2 March 2012 and disseminated to all BSP covered institutions under

Memorandum to All Banks No. 2012-017 dated 4 April 2012.

ARRS is an internal rating system to be used by BSP to understand whether the risk

management policies and practices as well as internal controls of Banks and NBFIs

to prevent money laundering and terrorist financing are in place, well disseminated

and effectively implemented. ARRS is an effective supervisory tool that undertakes

to ensure that all covered institutions as defined under Circular No. 706 are

assessed in a comprehensive and uniform manner, and that supervisory attention is

appropriately focused on entities exhibiting inefficiencies in Board of Directors the

adoption of an AML Risk Rating System (ARRS) approved under MB Resolution and

Senior Management oversight and monitoring, inadequacies in their AML

framework, weaknesses in internal controls and audit and defective implementation

of internal policies and procedures.

Under the ARRS, each covered institution is assigned a Numerical and Adjectival

Composite Rating (4 as the highest – sound; 3 – adequately sound; 2- vulneralbe;

and 1 as the lowest – grossly inadequate) based on the assessment of the following

four (4) components:

1. Component I- Efficient Board of Directors (BOD) and Senior Management (SM)

Oversight (“Management”);

2. Component II- Sound AML policies and procedures embodied in a Money

Laundering and Terrorist Financing Prevention Program duly approved by the Board

of Directors (“MLPP”);

3. Component III- Robust internal controls and audit (“Controls and Audit”); and

4. Component IV- Effective implementation (“Implementation”).

Evaluation of the four (4) components takes into consideration the covered

institution’s responses to various questions that are designed to comprehend its

business operations as well as its risk profile. The responses will be assessed and

on-site examination will confirm their veracity and accuracy. Based on the

evaluation of the existence or non-existence of the each of the above components,

BSP covered institutions are assigned a Numerical and Adjectival Component Rating

that also ranges from 4 as the highest and 1 as the lowest. After considering the

four components, enforcement actions proportional to the Composite Rating are

recommended to ensure that BSP covered institutions take necessary measures to

improve their risk management policies and practices.

4. Proactive issuance of AML Regulations on Ongoing Basis since 2000

Aside from AML Circulars, BSP also issues on an ongoing basis Circular-Letters since

2000 to disseminate resolutions adopted by the AMLC covering updates of

guidelines on reporting of suspicious transactions or identifying suspected

individuals or organizations (local and international) known to be involved in money

laundering and other illegal activities, particularly those included in the United

Nations Sanctions List.

In addition, BSP has issued several media releases and other public advisories to

disseminate certain suspicious or illegal activities to make the public fully aware of

them.

Money laundering is the process whereby the proceeds of crime are

transformed into ostensibly legitimate money or other assets.[1] However, in a

number of legal and regulatory systems the term money laundering has become

conflated with other forms of financial crime, and sometimes used more generally

to include misuse of the financial system (involving things such as securities, digital

currencies, credit cards, and traditional currency), including terrorism financing, tax

evasion and evading of international sanctions. Most anti-money laundering laws

openly conflate money laundering (which is concerned with source of funds) with

terrorism financing (which is concerned with destination of funds) when regulating

the financial system. Money obtained from certain crimes, such as extortion, insider

trading, drug trafficking, illegal gambling and tax evasion is "dirty". It needs to be

cleaned to appear to have derived from non-criminal activities so that banks and

other financial institutions will deal with it without suspicion. Money can be

laundered by many methods, which vary in complexity and sophistication. Different

countries may or may not treat tax evasion or payments in breach of international

sanctions as money laundering. Some jurisdictions differentiate these for definition

purposes, and others do not. Some jurisdictions define money laundering as

obfuscating sources of money, either intentionally or by merely using financial

systems or services that do not identify or track sources or destinations. Other

jurisdictions define money laundering to include money from activity that would

have been a crime in that jurisdiction, even if it were legal where the actual conduct

occurred. This broad brush of applying the term "money laundering" to merely

incidental, extraterritorial, or simply privacy-seeking behaviours has led some to

label it "financial thought crime".

Many regulatory and governmental authorities issue estimates each year for the

amount of money laundered, either worldwide or within their national economy. In

1996, the International Monetary Fund estimated that two to five percent of the

worldwide global economy involved laundered money. The Financial Action Task

Force on Money Laundering (FATF), an intergovernmental body set up to combat

money laundering, stated, "Overall, it is absolutely impossible to produce a reliable

estimate of the amount of money laundered and therefore the FATF does not

publish any figures in this regard."[4] Academic commentators have likewise been

unable to estimate the volume of money with any degree of assurance.[5] Various

estimates of the scale of global money laundering are sometimes repeated often

enough to make some people regard them as factual—but no researcher has

overcome the inherent difficulty of measuring an actively concealed practice.

Regardless of the difficulty in measurement, the amount of money laundered

each year is in the billions (US dollars) and poses a significant policy concern for

governments. As a result, governments and international bodies have undertaken

efforts to deter, prevent, and apprehend money launderers. Financial institutions

have likewise undertaken efforts to prevent and detect transactions involving dirty

money, both as a result of government requirements and to avoid the reputational

risk involved. Issues relating to money laundering have existed as long as there

have been large scale criminal enterprises. Modern anti-money laundering laws

have developed along with the modern War on Drugs. In more recent times anti-

money laundering legislation is seen as adjunct to the financial crime of terrorist

financing in that both crimes usually involve the transmission of funds through the

financial system.

Money laundering is commonly defined as occurring in three steps:

The first step involves introducing cash into the financial system by some means

("placement");

The second involves carrying out complex financial transactions to camouflage the

illegal source ("layering");

And the final step entails acquiring wealth generated from the transactions of the

illicit funds ("integration"). Some of these steps may be omitted, depending on the

circumstances; for example, non-cash proceeds that are already in the financial

system would have no need for placement.

Money laundering takes several different forms, although most methods

can be categorized into one of a few types. These include "bank methods, smurfing

[also known as structuring], currency exchanges, and double-invoicing"

Anti-money laundering (AML) is a term mainly used in the financial and legal

industries to describe the legal controls that require financial institutions and other

regulated entities to prevent, detect, and report money laundering activities. Anti-

money laundering guidelines came into prominence globally as a result of the

formation of the Financial Action Task Force (FATF) and the promulgation of an

international framework of anti-money laundering standards. These standards

began to have more relevance in 2000 and 2001, after FATF began a process to

publicly identify countries that were deficient in their anti-money laundering laws

and international cooperation, a process colloquially known as "name and shame".

An effective AML program requires a jurisdiction to have criminalized money

laundering, given the relevant regulators and police the powers and tools to

investigate; be able to share information with other countries as appropriate; and

require financial institutions to identify their customers, establish risk-based

controls, keep records, and report suspicious activities.

Global Organizations working against money laundering

Formed in 1989 by the G7 countries, the FATF is an intergovernmental body whose

purpose is to develop and promote an international response to combat money

laundering. The FATF Secretariat is housed at the headquarters of the OECD in

Paris. In October 2001, FATF expanded its mission to include combating the

financing of terrorism. FATF is a policy-making body that brings together legal,

financial, and law enforcement experts to achieve national legislation and

regulatory AML and CFT reforms. As of 2014 its membership consists of 36 countries

and territories and two regional organizations. FATF works in collaboration with a

number of international bodies and organizations. These entities have observer

status with FATF, which does not entitle them to vote, but permits them full

participation in plenary sessions and working groups. FATF has developed 40

recommendations on money laundering and 9 special recommendations regarding

terrorist financing. FATF assesses each member country against these

recommendations in published reports. Countries seen as not being sufficiently

compliant with such recommendations are subjected to financial sanctions.

FATF's three primary functions with regard to money laundering are:

1. Monitoring members’ progress in implementing anti-money laundering measures.

2. Reviewing and reporting on laundering trends, techniques, and countermeasures.

3. Promoting the adoption and implementation of FATF anti-money laundering

standards globally.

The bill that would strengthen the Anti-money laundering council will include foreign

exchange establishments, real estate dealers, and jewelry and precious metal

dealers in the list of those that should report any suspicious transactions.

A provision that includes casinos in the list was previously proposed by Senate

President Juan Ponce Enrile. This provision however was not accepted by the panel

of the House of Representatives during the bicameral conference.

Senator Teofisto Guingona III had said that if the Senate panel refused the removal

of the provision on casinos, they would not be able to get the bill through with the

limited time left.

“There is a deadlock and time is running out. If both panels maintain their position…

we would have no law,” Guingona said.

The Senate is set to go into recess on Wednesday to give way to the May 2013

election campaign.

The Philippines faces being blacklisted by the International Financial Action Task

Force (FATF) if it fails to pass the bill.

The Philippine Amusement and Gaming Corp (Pagcor) will come out with a set of

rules to monitor suspicious transactions even after casinos have been excluded

from the coverage of the recently amended Anti-Money Laundering Act (AMLA).

Pagcor vice president for gaming and licensing development Francis Hernando said

the state-gaming firm has started drafting the rules that could be implemented

starting September this year.

“There will be a set of rules. We’re actually developing a set of rules in time for the

opening of Solaire,” Hernando told Senate reporters, referring to Bloomberry’s

Solaire Manila Resorts and Casio, one of four license holders of Pagcor’s

Entertainment City project.

“Our casino regulations and part of those casino regulations will touch on

monitoring transactions that may be deemed to be say suspicious under the AMLA,’

he said.

A proposal requiring casinos to report suspicious transactions was rejected by

Congress when it approved early this month a bill that seeks to strengthen the

AMLA.

Despite this, Hernando said Pagcor would police its own to strengthen its regulatory

power and be at par with international standards.

“I think if we want to be international class and recognized worldwide, we have to

police ourselves properly,” he said.

“We’d like to hopefully be recognized as a serious jurisdiction internationally. The

way Macau and Singapore and Las Vegas, New Jersey, Australia do it, there is a

formal set of rules that is applied to everybody for a level playing field,” said

Hernando.

“The rules are predictable, there are set sanctions for certain infractions and we’ve

all put this and codified these into a manual. And that manual that’s under

development. The first draft has already been approved by our board and we’re

hoping that the formal form will be finished by September,” Hernando added.

President Benigno Aquino III signed on Friday the measure amending the Anti-

Money Laundering Act (Amla).

Deputy presidential spokesperson Abigail Valte made the announcement in a text

message sent out to the media.

Republic Act No. 10365 is also known as an “Act Strengthening the Anti-Money

Laundering Law.”

Valte confirmed that the law would shield the country from being blacklisted by the

International Financial Action Task Force (FATF).

“Yes, this is the third law required to keep us off the FATF blacklist. The first two

were passed last year,” she said.

Valte, however, couldn’t cite highlights of the new law as she had yet to see the

“final copy.”

“I need to compare it with the old one (law) first. I’ll be in a better position to give

you details once I have the signed copy,” said Valte.

A blacklist could mean difficulties for overseas Filipinos sending money home as

more documentation would be required from them as a result of the country’s

blacklisting.

The bicameral conference committee approved amendments to Amla last week.

The law strengthens the antimoney-laundering council by requiring foreign

exchange establishments, real estate dealers, and jewelry and precious metal

dealers to report any suspicious transactions.

A set of procedures, laws or regulations designed to stop the practice of

generating income through illegal actions. In most cases money launderers hide

their actions through a series of steps that make it look like money coming from

illegal or unethical sources was earned legitimately.

Though anti-money-laundering laws cover only a relatively limited number of

transactions and criminal behaviors, their implications are extremely far reaching.

An example of AML regulations are those that require institutions issuing credit or

allowing customers open accounts to complete a number of due-diligence

procedures to ensure that these institutions are not aiding in money-laundering

activities. The onus to perform these procedures is on the institutions, not the

criminals or the government.

MANILA, Philippines - Amendments to the “dirty money” law which expanded its

covered institutions and crimes are set to take effect this month.

Republic Act (RA) 10365, which amended certain provisions of the Anti-Money

Laundering Act (AMLA) of 2001, was signed into law by President Aquino last Feb.

15. The law will take effect 15 days after publication in a newspaper or by April 19.

It was among the measures enacted for the Philippines to avoid getting blacklisted

by the Financial Action Task Force (FATF), a global anti-money laundering

watchdog.

Since then, FATF has kept the Philippines under its grey list, which signified

commitment to pass reforms. Being blacklisted would have meant higher financial

transaction costs, especially for Filipinos abroad.

The Paris-based FATF has scheduled an “on-site visit” to inspect if AMLA reforms are

being implemented accordingly. A total of three laws- including RA 10365 – have

been passed to address FATF concerns.

Under RA 10365, foreign exchange corporations, money changers, pre-need and

insurance companies were included in covered firms required to report transactions

of P500,000 and above to the Anti-Money Laundering Council (AMLC).

Jewelry dealers will be required to do so for transactions worth P1 million and above,

it added. Originally, only banks, quasi-banks and non-bank financial

The law also required the Land Registration Authority to submit to AMLC reports

covering real estate purchases worth P500,000 and up.

Aside from this, predicate crimes- or those criminal acts where the law may also be

applied if money is involved- were also expanded to cover 20 other acts, including

bribery, extortion, malversation of public funds, fraud and financing of terrorism.

The original law only mentioned 14 acts connected to money laundering such as

kidnapping, piracy on high seas, smuggling, robbery and plunder.

Despite AMLA having more teeth, RA 10365 still prevented AMLC to “participate in

any manner” in the operations of the Bureau of Internal Revenue, which effectively

banned it to intervene in the collection of taxes in pursuit of its mandate.

Two other laws were passed last year in order for the Philippines to comply with

FATF requirements. They are RA 10168 and 10167, which respectively criminalized

terrorist financing activities and gave AMLC the power to examine bank accounts

without the owner’s consent.

Who are these Money Laundering and Terrorist Financing regulations

aimed at? Suspicious foreigners who might want to do something unconscionable

like buy a house or condo? If our governments had spent a tenth as much time

watching what was happening on Wall Street as they wasted chasing imaginary

terrorists we'd all be in much better shape now.

In many parts of the world, such crime-fighting assets cannot be taken for granted.

In some countries, particularly those in the developing world, the challenges may be

more fundamental, but the end result is the same, which is a financial sector

vulnerable to abuse by criminals.

While much progress has been made on the legislative front, with most of the

world’s countries now signed up to relevant United Nations conventions and other

key international standards and agreements, the UNODC said the capacity of

countries to make proper use of them varies significantly.

Some countries have an insufficient institutional framework with deficiencies in the

regulatory system, financial intelligence unit and/or enforcement mechanisms.

Others have more basic needs, such as an electronic population registry, access to

fast and reliable Internet and communication services, or computer equipment and

software needed to keep track of financial movements.