Money Laundering Fraud

Philippine Anti-Money Laundering Council re-organizes in anticipation for PNoy's war on corruption

2010-07-03T01:29:00.000-07:00

The Philippines' Anti-Money Laundering Council (AMLC) is reorganizing in anticipation of a lot more investigations of suspicious transactions as banks intensify anti-money laundering efforts to comply with regulations, both local and international.

The Monetary Board of the Bangko Sentral ng Pilipinas (BSP) is currently studying proposals to reorganize the AMLC Secretariat, for one, which is located within the BSP complex in Malate, Manila.

Based on documents, AMLC is proposing to create at least 19 more positions, mostly with the Office of the Governor of the central bank, as per Resolution No. 227 approved recently.

BSP Governor Amando M. Tetangco Jr. chairs the AMLC while Securities and Exchange Commission's Fe Barin and Insurance Commission's Santiago Ranada are members. At the moment, the BSP-based office consists of four units -- the Compliance and Investigation Group, the Legal Evaluation Group, the Information Management and Analysis Group and the Administrative and Financial Services Division.

The council, currently headed by Executive Director and Assistant Governor Vicente Aquino, considers itself a "world-class financial intelligence unit" or FIU, whose functions is to investigate and cause the prosecution of money laundering offenses in the Philippines.

In June alone, the BSP released six AMLC circular letters to all financial institutions to remind banks to be vigilant and expose terrorist financing.

To ensure compliance with the 2001 Anti-Money Laudering Act, the BSP may inquire into or examine any deposit or investment with any banking institution or non-bank financial institution when the examination is made "in the course of a periodic or special examination in accordance with the rules of examination of the BSP."

In the meantime, AMLC forge agreements with other FIUs to toughen up efforts against global money laundering and terrorist financing activities. Basically, it is a central office that obtains and analyzes financial reports and then discloses it to appropriate government agencies and other FIUs.

"Our law authorizes us to extend assistance in transactional investigation and prosecution of persons involved in money laundering activities wherever committed, but we still pursue MOUs (to protect against) changes in administration, political system so they have to honor agreements as part of the international community," said Aquino in a previous interview.

All information exchanged by FIU members is 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.

To allow it more teeth in tracking down suspected dirty money perpetrators, AMLC requires government institutions to directly coordinate with the council for a more efficient transfer of material data.

Money laundering is illegal in the Philippines. The crime is defined as a scheme where the proceeds of specified unlawful activities are transacted to make them appear to have originated from legitimate sources.

In 2007, former President Gloria M. Arroyo signed into law the anti-terror bill, but many considers the amended AMLA as sufficient enough, especially after it included the prosecution of "predicate crimes and unlawful activities that generates dirty money." These consist of kidnapping for ransom, drug trafficking, graft and corruption, plunder, robbery and extortion, piracy, qualified theft, swindling and smuggling, among others.

Predicate Crimes Unlawful Activities under the Anti-Money Laundering Act

2010-03-09T15:36:00.000-08:00

Under the Philippine Anti-Money Laundering Act, the following are classified as predicate crimes. These are criminal acts that are related to the commission of money laundering.

Kidnapping for ransom
Drug trafficking and related offenses
Graft and corrupt practices
Plunder
Robbery and Extortion
Jueteng and Masiao
Piracy
Qualified theft
Swindling
Smuggling
Violations under the Electronic Commerce Act of 2000
Hijacking; destructive arson; and murder, including those perpetrated by terrorists against non-combatant persons and similar targets
Fraudulent practices and other violations under the Securities Regulation Code of 2000
Felonies or offenses of a similar nature that are punishable under the penal laws of other countries.

Money Laundering Offenses and Penalties

2010-03-09T15:33:00.000-08:00

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.
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.
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. 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:

Salient Features of the Anti Money Laundering Act

2010-03-09T15:32:00.000-08:00

Criminalizes money laundering
Creates a financial intelligence unit
Imposes requirements on customer identification, record keeping and reporting of covered and suspicious transactions
Relaxes strict bank deposits secrecy laws
Provides for freezing/seizure/forfeiture/recovery of dirty money/property
Provides for international cooperation

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.

History of the AMLA

2010-03-09T15:30:00.002-08:00

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.

Rationale for Enacting the AMLA

2010-03-09T15:30:00.000-08:00

Rationale for Enacting the Law

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.