REVISED IMPLEMENTING RULES AND REGULATIONS (RIRRs)

OF REPUBLIC ACT NO.9160 (THE ANTI-MONEY LAUNDERING ACT OF 2001) (AMLA), AS

AMENDED BY REPUBLIC ACT NO.9194 (2003), REPUBLIC ACT NO. 10167 (2012)
AND REPUBLIC ACT NO. 10365 (2013)

RULE I - TITLE AND PURPOSE

Section 1. Short Title and Purpose.
a) These Rules shall be known and cited as the 2013 Revised Implementing Rules and
Regulations of Republic Act No. 9160, as amended.
b) These Rules are promulgated to prescribe the procedures and guidelines for the
implementation of the AMLA, as amended.

RULE II - DECLARATION OF POLICY

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 Philippines shall extend cooperation in transnational investigations and prosecutions of persons
involved in money laundering activities wherever committed.

RULE III - DEFINITION OF TERMS

Section 3. Definitions.- For purposes of these Rules, the following terms are hereby defined as
follows:
3.1.

Covered persons, natural or juridical, refer to:

3.1.1.

Banks, offshore banking units, quasi-banks, trust entities, non-stock savings and
loan associations, pawnshops, foreign exchange dealers, money changers, money
remittance or transfer companies, electronic money issuers and all other persons and
entities supervised or regulated by the BSP, including their subsidiaries and affiliates.
(a)
a) A subsidiary means an entity more than 50% of the outstanding voting stock of
which is owned by a bank, quasi-bank, trust entity or any other institution being
supervised and regulated by the BSP.
b) An affiliate means an entity at least twenty percent (20%) but not exceeding fifty
percent (50%) of the outstanding voting stock of which is owned by a bank, quasibank, trust entity or any other institution being supervised and regulated by BSP.

3.1.2.

Insurance companies, insurance agents, insurance brokers, professional reinsurers,

reinsurance brokers, holding companies, holding company systems, pre-need
companies, mutual benefit associations and all other persons and entities supervised
and regulated by the Insurance Commission (IC).
a) Insurance company shall include all partnerships, associations, cooperatives or
corporations, including government-owned or -controlled corporations or entities,
engaged as principals in the insurance business, excepting mutual benefit
associations. Unless the context otherwise requires, the term shall also include
professional reinsurers defined in Section 288 of Republic Act No. 10607,
otherwise known as The Insurance Code. Domestic company shall include
companies formed, organized or existing under the laws of the Philippines.
Foreign company when used without limitation shall include companies formed,
organized, or existing under any laws other than those of the Philippines. (Sec.
190, R.A. No. 10607)

b) An insurance agent includes any person who for compensation solicits or obtains
insurance on behalf of any insurance company or transmits for a person other
than himself an application for a policy or contract of insurance to or from such
company or offers or assumes to act in the negotiation of such insurance.
c) An insurance broker includes any person who for any compensation, commission
or other thing of value acts or aids in any manner in soliciting, negotiating or
procuring the making of any insurance contract or in placing risk or taking out
insurance, on behalf of an insured other than himself.
d) A professional reinsurer includes any entity that transacts solely and exclusively
reinsurance business in the Philippines, whether domestic or foreign company. A
contract of reinsurance is one by which an insurer procures a third person to
insure him against loss or liability by reason of such original insurance.
e) A reinsurance broker is one who, for compensation, not being a duly authorized
agent, employee or officer of an insurer in which any reinsurance is effected, acts
or aids in any manner in negotiating contracts of reinsurance, or placing risks of
effecting reinsurance, for any insurance company authorized to do business in
the Philippines.
f) A holding company includes any person who directly or indirectly controls any
authorized insurer.
g) A holding company system includes a holding company together with its
controlled insurers and controlled persons.
h) A pre-need company refers to any corporation registered with the Commission
and authorized/licensed to sell or offer to sell pre-need plans. The term preneed company also refers to schools, memorial chapels, banks, non-bank
financial institutions and other entities which have also been authorized/licensed
to sell or offer to sell pre-need plans insofar as their pre-need activities or
business are concerned. Pre-need plans are contracts, agreements, deeds or
plans for the benefit of the plan holders which provide for the performance of
future service/s, payment of monetary considerations or delivery of other benefits
at the time of actual need or agreed maturity date, as specified therein, in
exchange for cash or installment amounts with or without interest or insurance
coverage and includes life, pension, education, interment and other plans,
instruments, contracts or deeds as may in the future be determined by the
Commission.
i) Mutual Benefit Association refers to any society, association or corporation,
without capital stock, formed or organized not for profit but mainly for the purpose
of paying sick benefits to members, or of furnishing financial support to members
while out of employment, or of paying to relatives of deceased members of fixed
or any sum of money, irrespective of whether such aim or purpose is carried out
by means of fixed dues or assessments collected regularly from the members, or
of providing, by the issuance of certificates of insurance, payment of its members
of accident or life insurance benefits out of such fixed and regular dues or
assessments, but in no case shall include any society, association, or corporation
with such mutual benefit features and which shall be carried out purely from
voluntary contributions collected not regularly and or no fixed amount from
whomsoever may contribute.
3.1.3.

The following Covered Persons under the supervision and regulation of the Securities
and Exchange Commission (SEC):

a) Securities brokers, dealers, salesmen, Associated Person of a Broker or Dealer,

investment houses and other similar persons managing securities or rendering similar
services as investment agents, trading advisors or consultants.
1. A securities broker includes a person engaged in the business of buying and
selling securities for the account of others.
2. A securities dealer includes any person who buys and sells securities for
his/her account in the ordinary course of business.
3. A securities salesman refers to a natural person hired to buy and sell
securities on a salary or commission basis properly endorsed to the
Commission by the employing broker dealer.

4. An Associated Person of a Broker or Dealer includes any person employed

full time by the broker dealer whose responsibilities include internal control
supervision of other employees, agents, salesmen, officers, directors, clerks
and stock holders of such broker dealer for compliance with the Securities
Regulation Code (SRC) and rules and regulations adopted thereunder.
5. An investment house includes an enterprise which engages or purports to
engage, whether regularly or on an isolated basis, in the underwriting of
securities of another person or enterprise, including securities of the
Government and its instrumentalities.
6. Investment Advisor/Agent/Consultant shall refer to any person:
a) who for an advisory fee is engaged in the business of advising others,
either directly or through circulars, reports, publications or writings, as to
the value of any security and as to the advisability of trading in any
security;
b) who for compensation and as part of a regular business, issues or
promulgates, analyzes reports concerning the capital market, except:
(i) any bank or trust company;
(ii) any journalist, reporter, columnist, editor, lawyer, accountant, teacher;
(iii) the publisher of any bona fide newspaper, news, business or financial
publication of general and regular circulation, including their employees;
(iv) any contract market;
(v) such other person not within the intent of thisdefinition, provided that the
furnishing of such service by the foregoing persons is solely incidental
to the conduct of their business or profession.
c) who undertakes the management of portfolio securities of investment
companies, including the arrangement of purchases, sales or exchanges of
securities.
b) mutual funds or open-end investment companies, close-end investment companiesor
issuers and other similar entities;
(i) A mutual fund or an open-end investment company includes an investment
company which is offering for sale or has outstanding, any redeemable
security of which it is the issuer.
(ii) A closed-end investment company includes an investment company other
than open-end investment company.
c) financing companies and lending companies, both with more than 40% foreign
participation in each voting stock or with paid-up capital of Php10 million or more; and
(i) Financing Companies are corporations which are primarily organized for the
purpose of extending credit facilities to consumers and to industrial, commercial,
or agricultural enterprises, by direct lending or by discounting or factoring
commercial papers or accounts receivable, or by buying or selling contracts,
leases, chattel mortgages, or other evidences of indebtedness, or by financing
leasing of movable as well as immovable property. The same does include
banks, investments houses, savings and loan associations, insurance
companies, cooperatives, and other financial institutions organized and
operating under other special laws.
(ii) Lending Company shall refer to a corporation engaged in granting loans from its
capital funds or from funds sourced from not more than nineteen (19) persons. It
shall not be deemed to include banking institutions, investment houses, savings
and loan associations, financing companies, pawnshops, insurance companies,
cooperatives and other credit institutions already regulated by law. The term
shall be synonymous with lending investors.
d) other entities administering or otherwise dealing in commodities, or financial derivatives
based thereon, valuable objects, cash substitutes and other similar monetary
instruments or properties supervised and regulated by the Securities and Exchange
Commission (SEC).
3.1.4.

Jewelry dealers in precious metals, who, as a business, trade in precious metals; (n)

3.1.5.

Jewelry dealers in precious stones, who, as a business, trade in precious stones; (n)

3.1.6.

Company service providers which, as a business, provide any of the following

services to third parties:
a) acting as a formation agent of juridical persons;
b) acting as (or arranging for another person to act as) a director or corporate secretary
of a company, a partner of a partnership, or a similar position in relation to other
juridical persons;
c) providing a registered office; business address or accommodation, correspondence
or administrative address for a company, a partnership or any other legal person or
arrangement; and
d) acting as (or arranging for another person to act as) a nominee shareholder for
another person. (n)

3.1.7.

Persons who provide any of the following services other than those supervised and
regulated by the BSP, SEC and IC:
a) Managing of client money, securities or other assets;
b) Management of bank, savings or securities accounts;
c) Organization of contributions for the creation, operation or management of
companies; and
d) Creation, operation or management of juridical persons or arrangements, and
buying and selling business entities.
Notwithstanding the foregoing, the term covered persons shall exclude lawyers and
accountants acting as independent legal professionals in relation to information
concerning their clients or where disclosure of information would compromise client
confidences or the attorney-client relationship: Provided, that these lawyers and
accountants are authorized to practice in the Philippines and shall continue to be
subject to the provisions of their respective codes of conduct and/or professional
responsibility or any of its amendments. (n)
Independent legal professional are lawyers and accountants working in a private
firm or sole practitioner who by way of business provides purely legal or notarial
services to their clients.

3.2.

Customer refers to any person or entity that keeps an account, or otherwise transacts
business, with a covered person, and any person or entity on whose behalf an account is
maintained or a transaction is conducted, as well as the beneficiary of said transactions. A
customer also includes the following: i) beneficiary of a trust, an investment fund or a
pension fund; ii) a company or person whose assets are managed by an asset manager; iii)
a grantor of a trust; and iv) any insurance policy holder, whether actual or prospective.

3.3.

Beneficial owner shall mean any natural person who ultimately owns or controls the
customer and/or any natural person on whose behalf a transaction or activity is being
conducted. It also includes those persons who exercise ultimate effective control over a
legal person or arrangement.

3.3.1.
Ultimate effective control refers to situations in which
ownership/control is exercised through actual or a chain of ownership or by means of
control other than direct control.
3.4.

Politically Exposed Persons (PEPs) refer to:

a) Domestic PEPs - individuals who are or have been entrusted domestically with
prominent public functions or positions with substantial authority over policy,
operations or the use or allocation of government-owned resources, such as but
not limited to, head of state, senior politicians, senior government, executive,

legislative, judicial or military officials, senior executives of GOCCs, and important

political party officials;
b) Foreign PEPs - individuals who are or have been entrusted with prominent
public functions by a foreign country, such as but not limited to, heads of state or
of government, senior politicians, senior government, judicial or military officials,
senior executives of government owned or controlled corporations (GOCCs),
important political party officials; and
c) International Organization PEPs - individuals who are or have been
entrusted with a prominent function by an international organization or members
of senior management or individuals who have been entrusted with equivalent
functions, such as but not limited to, directors, deputy directors and members of
the board or equivalent functions. (n)
3.4.1.

Family members of PEPs refers to immediate family members of a PEP, which

shall include the following:
a) Spouse/partner;
b) Children and their spouses; and
c) Parents and Parents-in-law. (n)

3.5.

Monetary Instrument shall include, but not limited to the following:

a)
b)
c)
d)

e)
f)

g)
h)
i)

Coins or currency of legal tender of the Philippines, or of any other country;

Credit instruments, including bank deposits, financial interest, royalties,
commissions and other intangible property; (n)
Drafts, checks and notes;
Shares, participation or interest in a corporation or in a commercial enterprise or
profit-making venture and evidenced by a certificate, contract, instrument,
whether written or electronic in character including those enumerated in Sec. 3 of
the Securities and Regulation Code. (n)
A participation or interest in any non-stock, non-profit corporation. (n)
Securities or negotiable instruments, bonds, commercial papers, deposit
certificates, trust certificates, custodial receipts or deposit substitute instruments,
trading orders, transaction tickets and confirmations of sale or investments and
money market instruments;
Contracts or policies of insurance, life or non-life, contracts of suretyship, preneed plans and member certificates issued by mutual benefit association;
Virtual and digital currencies; and
Other similar instruments where title thereto passes to another by endorsement,
assignment or delivery.

3.6.

Offenderrefers to any person who commits a money laundering offense.

3.7.

Person refers to any natural or juridical person.

3.8.

Proceeds refers to an amount derived or realized from an unlawful activity, which

includes, but is not limited to:
a) All material results, profits, effects and any amount realized from any unlawful
activity;
b) All monetary, financial or economic means, devices, documents, papers or things
used in or having any relation to any unlawful activity; and
c) All moneys, expenditures, payments, disbursements, costs, outlays, charges,
accounts, refunds and other similar items for the financing, operations, and
maintenance of any unlawful activity.

3.9.

Property refers to anything or item of value, tangible or intangible, or any interest therein,
any benefit, privilege, claim or other right with respect thereto, which include, but not limited
to - the following:
a)

Personal property, including proceeds derived therefrom, traceable to any unlawful

activity, which includes, but is not limited to:
(i) Cash;
(ii) Jewelry, precious metals, precious stones, and other similar items;
(iii) Works of art such as paintings, sculptures, antiques, treasures, and other
similar precious objects;
(iv) Perishable goods; and
(v) Vehicles, vessels or aircraft, or any other similar conveyance.

b)

Personal property, used as instrumentalities in the commission of any unlawful

activity such as:
(i) Desktops, laptops, servers, tablets, mobile phones, storage media (Disks,
Memory Sticks, etc.), computer accessories;
(ii) Database, applications, software programs, and other electronic information
and communication systems; and
(iii) Any conveyance, including any vehicle, vessel and aircraft.

c)

Real estate, improvements constructed or crops growing therefrom, or any interest

therein, standing upon the record of the registry of deeds of the province in the name
of the party against whom the asset preservation order is issued, or not appearing at
all upon such records, or belonging to the offender and held by any other person, or
standing on the records of the registry of deeds in the name of any other person,
which are:
(i) Derived from, or traceable to, any unlawful activity; or
(ii) Used as an instrumentality in the commission of any unlawful activity. (n)

3.10.

Related Accounts are those accounts, the funds and sources of which originated from
and/or are materially linked to the monetary instruments or properties subject of the
freeze order.
3.10.1. Materially linked accounts
For the purpose of this paragraph, it shall include but are not limited to the following:
(i)
(ii)

(iii)

(iv)
(v)

All accounts or monetary instruments belonging to the same person whose

accounts, monetary instruments or properties are the subject of the freeze
order;
All accounts or monetary instruments held, owned or controlled by the owner
or holder of the accounts, monetary instruments or properties subject of the
freeze order, whether such accounts are held, owned or controlled singly or
jointly with another person;
All accounts or monetary instruments the funds or any portion of which are
transferred to the accounts, monetary instruments or properties subject of the
freeze order without any legal or trade obligation, purpose or economic
justification;
All In Trust For (ITF) accounts where either the trustee or the trustor
pertains to a person whose accounts, monetary instruments or properties are
the subject of the freeze order;
All accounts held for the benefit or in the interest of the person whose
accounts, monetary instruments or properties are the subject of the freeze
order;

(vi)

All accounts or monetary instruments under the name of the immediate family
or household members of the person whose accounts, monetary instruments
or properties are the subject of the freeze order if the amount or value
involved is not commensurate with the business or financial capacity of the
said family or household member.

Immediate family members includes the spouse/partner, parents, parentsin-law, children and their spouses. Household members shall refer to
persons other than members of the immediate family, who live in the same
house, including but not limited to, family driver/s and house helper/s; (n)
(vii) All accounts of corporate or juridical entities the beneficial owner of which is
the subject of the freeze order.
(viii) All shares or units in any investment accounts and/or pooled funds of the
person whose accounts, monetary instruments or properties are subject of
the freeze order; and
(ix) All other accounts, shares, units or monetary instruments that are similar,
analogous or identical to any of the foregoing.
3.11. Supervising Authority (SA) refers to the BSP, the SEC, the IC, and the relevant
regulatory bodies of the Designated Non-Financial Businesses and Professions (DNFBPs)
herein enumerated under Sections 3.1.4 to 3.1.7, or other government agency/ies
designated by Law. For DNFBPs without SAs, the AMLC shall act as the SA for AML/CFT
purposes.(a)
3.12. Transaction refers to any act establishing any right or obligation or giving rise to any
contractual or legal relationship between the parties thereto. It also includes any movement
of funds by any means with a covered person.

4.9.1.
4.9.2.
4.9.3.
4.9.4.
4.9.5.
4.9.6.
4.9.7.
4.9.8.
3.12.1. Covered Transaction
3.12.1.1.

Covered transaction shall refer to:

a) A single transaction in cash or other equivalent monetary instrument involving an

amount in excess of Five hundred thousand pesos (Php500,000.00).
b) As regards jewelry dealers in precious metals and precious stones, any single
transaction in excess of One million pesos (Php1,000,000.00).(n)
3.12.2. Suspicious Transaction is a transaction, regardless of amount, where any of
the following circumstances exist:
a) there is no underlying legal or trade obligation, purpose or economic justification;
b) the client is not properly identified;
c) the amount involved is not commensurate with the business or financial capacity
of the client;
d) taking into account all known circumstances, it may be perceived that the clients
transaction is structured in order to avoid being the subject of reporting
requirements under the AMLA, as amended;

e) any circumstance relating to the transaction which is observed to deviate from the
profile of the client and/or the clients past transactions with the covered person;
f) the transaction is in any way related to an unlawful activity or any money
laundering activity or offense, is being or has been committed;
g) any transaction that is similar, analogous or identical to any of the foregoing.
3.13. Unlawful activity refers to any act or omission or series or combination thereof involving
or having direct relation, to the following:
1. Kidnapping for ransom under Article 267 of Act No. 3815, otherwise known as the
Revised Penal Code, as amended;
2. Sections 4, 5, 6, 8, 9, 10, 11, 12,13, 14, 15 and 16 of Republic Act No. 9165,
otherwise known as the Comprehensive Dangerous Drugs Act of 2002;
a) Importation of prohibited drugs;
b) Sale of prohibited drugs;
c) Trading of prohibited drugs;
d) Administration of prohibited drugs;
e) Dispensation of prohibited drugs;
f) Delivery of prohibited drugs;
g) Distribution of prohibited drugs;
h) Transportation of prohibited drugs;
i) Maintenance of a Den, Dive or Resort for prohibited drugs;
j) Illegal chemical diversion of prohibited drugs;
k) Manufacture or delivery of equipment, instrument, apparatus and other
paraphernalia for prohibited drugs;
l) Possession of prohibited drugs;
m) Possession of equipment, instrument, apparatus and other paraphernalia for
prohibited drugs;
n) Possession of prohibited drugs during parties, social gatherings or meetings;
o) Possession of equipment, instrument, apparatus and other paraphernalia for
prohibited drugs during parties, social gatherings or meetings;
p) Use of prohibited drugs;
q) Cultivation of plants classified as or which are sources of prohibited drugs;
r) Culture of plants classified as or which are sources of prohibited drugs;
3. Section 3 paragraphs b, c, e, g, h and i of Republic Act No. 3019, as amended,
otherwise known as the Anti-Graft and Corrupt Practices Act;
a) Directly or indirectly requesting or receiving any gift, present, share, percentage
or benefit for himself or for any other person in connection with any contract or
transaction between the Government and any other party, wherein the public
officer in his official capacity has to intervene under the law;
b) Directly or indirectly requesting or receiving any gift, present or other pecuniary or
material benefit, for himself or for another, from any person for whom the public
officer, in any manner or capacity, has secured or obtained, or will secure or
obtain, any government permit or license, in consideration for the help given or to
be given, without prejudice to Section 13 of R.A. No. 3019;
c) Causing any undue injury to any party, including the Government, or giving any
private party any unwarranted benefits, advantage or preference in the discharge
of his official, administrative or judicial functions through manifest partiality,
evident bad faith or gross inexcusable negligence;
d) Entering, on behalf of the Government, into any contract or transaction manifestly
and grossly disadvantageous to the same, whether or not the public officer
profited or will profit thereby;
e) Directly or indirectly having financial or pecuniary interest in any business
contract or transaction in connection with which he intervenes or takes part in his
official capacity, or in which he is prohibited by the Constitution or by any law from
having any interest;

f)

Directly or indirectly becoming interested, for personal gain, or having material

interest in any transaction or act requiring the approval of a board, panel or group
of which he is a member, and which exercises discretion in such approval, even if
he votes against the same or he does not participate in the action of the board,
committee, panel or group;

4. Plunder under Republic Act No. 7080, as amended;

a) Plunder through misappropriation, conversion, misuse or malversation of public
funds or raids upon the public treasury;
b) Plunder by receiving, directly or indirectly, any commission, gift, share,
percentage, kickbacks or any other form of pecuniary benefit from any person
and/or entity in connection with any government contract or project or by reason
of the office or position of the public officer concerned;
c) Plunder by the illegal or fraudulent conveyance or disposition of assets belonging
to the National Government or any of its subdivisions, agencies, instrumentalities
or government-owned or -controlled corporations or their subsidiaries;
d) Plunder by obtaining, receiving or accepting, directly or indirectly, any shares of
stock, equity or any other form of interest or participation including the promise of
future employment in any business enterprise or undertaking;
e) Plunder by establishing agricultural, industrial or commercial monopolies or other
combinations and/or implementation of decrees and orders intended to benefit
particular persons or special interests;
f) Plunder by taking undue advantage of official position, authority, relationship,
connection or influence to unjustly enrich himself or themselves at the expense
and to the damage and prejudice of the Filipino people and the Republic of the
Philippines;
5. Robbery and extortion under Articles 294, 295, 296, 299, 300, 301 and 302 of the
Revised Penal Code, as amended;
a) Robbery with violence against or intimidation of persons;
b) Robbery with physical injuries, committed in an uninhabited place and by a band,
or with use of firearm on a street, road or alley;
c) Robbery in an inhabited house or public building or edifice devoted to worship;
d) Robbery in an uninhabited place and by a band;
e) Robbery in an uninhabited place or in a private building;
6. Jueteng and Masiao punished as illegal gambling under Presidential Decree No.
1602;
7. Piracy on the high seas under the Revised Penal Code, as amended, and Presidential
Decree No. 532:
a) Piracy on the high seas;
b) Piracy in inland Philippine waters;
c) Aiding and abetting pirates and brigands;
8. Qualified theft under Article 310 of the Revised Penal Code, as amended;
9. Swindling under Article 315 and Other Forms of Swindling under Article 316 of the
Revised Penal Code, as amended:
a) Estafa with unfaithfulness or abuse of confidence by:
(i) altering the substance, quantity or quality of anything of value which the
offender shall deliver by virtue of an obligation to do so, even though such
obligation be based on an immoral or illegal consideration;
(ii) misappropriating or converting, to the prejudice of another, money, goods or
any other personal property received by the offender in trust or on
commission, or for administration, or under any other obligation involving the
duty to make delivery of or to return the same, even though such obligation

b)

c)
d)
e)
f)
g)
h)

be totally or partially guaranteed by a bond; or by denying having received

such money, goods, or other property;
(iii) taking undue advantage of the signature of the offended party in blank, and
by writing any document above such signature in blank, to the prejudice of
the offended party or of any third person;
Estafa by means of any of the following false pretenses or fraudulent acts
executed prior to or simultaneously with the commission of the fraud by:
(i)
using a fictitious name, or falsely pretending to possess power, influence,
qualifications, property, credit, agency, business or imaginary transactions,
or by means of other similar deceits;
(ii) altering the quality, fineness or weight of anything pertaining to his art or
business;
(iii) pretending to have bribed any Government employee;
(iv) postdating a check, or issuing a check in payment of an obligation when
the offender has no funds in the bank, or his funds deposited therein were
not sufficient to cover the amount of the check;
(v) inducing another, by means of deceit, to sign any document;
(vi) resorting to some fraudulent practice to ensure success in a gambling
game;
(vii) removing, concealing or destroying, in whole or in part, any court record,
office files, document or any other papers;
Conveying, selling, encumbering or mortgaging any real property, pretending to
be the owner of the same;
Disposing of real property as free from encumbrance, although such
encumbrance be not recorded;
Wrongfully taking by the owner of his personal property from its lawful possessor
to the prejudice of the latter or any third person;
Executing any fictitious contract to the prejudice of another;
Accepting any compensation for services not rendered or for labor not performed;
Selling, mortgaging or encumbering real property or properties with which the
offender guaranteed the fulfillment of his obligation as surety without the express
authority from the court or before the cancellation of his bond or before being
relieved from the obligation contracted by him;

10. Smuggling under Republic Act No. 455 and under Republic Act No. 1937, as
amended, otherwise known as the Tariff and Customs Code of the Philippines:
a) Unlawful importation - Fraudulently importing or bringing into the Philippines, or
assisting in so doing, any article, contrary to law, or receiving, concealing, buying,
selling or in any manner facilitating the transportation, concealment or sale of
such article after importation, knowing the same to have been imported contrary
to law; and
b) Various fraudulent practices against customs revenue - Making or attempting to
make any entry of imported or exported article by means of any false or
fraudulent invoice, declaration, affidavit, letter, paper, or by means of any false
statement, written or verbal, or by means of any false or fraudulent practice
whatsoever, or any willful act or omission by means whereof the Government of
the Republic of the Philippines might be deprived of the lawful duties, taxes and
other charges, or any portion thereof, accruing from the article or any portion
thereof, embraced or referred to in such invoice, declaration, affidavit, letter,
paper, or statement, or affected by such act or omission.
11. Violations under Republic Act No. 8792, otherwise known as the Electronic
Commerce Act of 2000:
a) Hacking or cracking, which refers to:
(i) unauthorized access into or interference in a computer system/server or
information and communication system;
(ii) any access in order to corrupt, alter, steal, or destroy using a computer or
other similar information and communication devices, information and

10

communications system, including the knowledge and consent of the owner

of the computer; or
(iii) the introduction of computer viruses and the like, resulting in the corruption,
destruction, alteration, theft or loss of electronic data messages or electronic
document;
b) Piracy, which refers to:
(i) the unauthorized copying, reproduction;
(ii) the unauthorized dissemination, distribution;
(iii) the unauthorized importation;
(iv) the unauthorized use, removal, alteration, substitution, modification;
(v) the unauthorized storage, uploading, downloading, communication, making
available to the public, or
(vi) the unauthorized broadcasting of protected material, electronic signature or
copyrighted works including legally protected sound recordings or
phonograms or information material on protected works, through the use of
telecommunication networks, such as, but not limited to, the internet, in a
manner that infringes intellectual property rights;
c) Violations under Republic Act No. 7394, otherwise known as The Consumer Act
of the Philippines and other relevant or pertinent laws through transactions
covered by or using electronic data messages or electronic documents.
12. Hijacking and other violations under Republic Act No. 6235, otherwise known as the
Anti-Hijacking Law; destructive arson and murder, as defined under the Revised
Penal Code, as amended:
a) Violations of RA No. 6235 (i) Compelling a change in the course or destination of an aircraft of Philippine
registry, or to seize or usurp the control thereof, while it is in flight;
(ii) Compelling an aircraft of foreign registry to land in Philippine territory, or to
seize or usurp the control thereof while it is within the said territory;
(iii) Shipping, loading or carrying in any passenger aircraft operating as a public
utility within the Philippines any explosive, flammable, corrosive or poisonous
substances or material;
b) Destructive arson committed by burning:
(i)
One (1) or more building or edifice, consequent to one single act of
burning, or as a result of simultaneous burnings, or committed on several
or different occasions;
(ii) Any building of public or private ownership, devoted to the public in general
or where people usually gather or congregate for a definite purpose;
(iii) Any train or locomotive, ship or vessel, airship or airplane, devoted to
transportation or conveyance, or for public use, entertainment or leisure;
(iv) Any building, factory, warehouse installation and any appurtenances
thereto, which are devoted to the service of public utilities;
(v) Any building the burning of which is for the purpose of concealing or
destroying evidence of another violation of law, or for the purpose of
concealing bankruptcy or defrauding creditors or to collect from insurance;
(vi) Any arsenal, shipyard, storehouse or military powder or fireworks factory,
ordinance, storehouse, archives or general museum of the Government;
(vii) An inhabited place, any storehouse or factory of inflammable or explosive
materials;
c) Murder committed in consideration of a price, reward or promise;
13. Terrorism and conspiracy to commit terrorism as defined and penalized under
Sections 3 and 4 of Republic Act No. 9372:
a) Terrorism an act punishable under any of the following provisions of the
Revised Penal Code:

11

(i)

Violations of Article 122 (Piracy in General and Mutiny in the High Seas or
in the Philippine Waters)
(ii) Violation of Article 134 (Rebellion or Insurrection)
(iii) Violation of Article 134-a (Coup dEtat), including acts committed by private
persons
(iv) Violations of Article 248 (Murder)
(v) Violation of Article 267 (Kidnapping and Serious Illegal Detention)
(vi) Violations of Article 324 (Crimes Involving Destruction)
(vii) Violations under Presidential Decree No. 1613 (The Law on Arson)
(viii) Violations under Republic Act No. 6969 (Toxic Substances and Hazardous
and Nuclear Waste Control Act of 1990)
(ix) Violations under Republic Act No. 5207 (Atomic Energy Regulatory and
Liability Act of 1968)
(x) Violations under Republic Act No. 6235 (Anti-Hijacking Law)
(xi) Violations of Presidential Decree No. 532 (Anti-Piracy and Anti-Highway
Robbery Law of 1974)
(xii) Presidential Decree No. 1866, as amended (Decree Codifying the Laws on
Illegal and Unlawful Possession, Manufacture, Dealing in, Acquisition or
Disposition of Firearms, Ammunitions or Explosives)
- thereby sowing and creating a condition of widespread and extraordinary fear and
panic among the populace, in order to coerce the government to give in to an
unlawful demand;
b) Conspiracy to commit terrorism There is conspiracy when two or more persons
come to an agreement concerning the commission of the crime of terrorism as
defined in item Section 3.14(13)(a);
14. Financing of Terrorism under Section 4 and offenses punishable under Sections 5, 6,
7 and 8 of Republic Act No. 10168, otherwise known as the Terrorism Financing
Prevention and Suppression Act of 2012:
a) Directly or indirectly, willfully and, without lawful excuse, possessing, providing,
collecting or using property or funds or making available property, funds or
financial service or other related services, by any means, with the unlawful and
willful intention that they should be used or with the knowledge that they are to be
used, in full or in part: (a) to carry out or facilitate the commission of any terrorist
act; (b) by a terrorist organization, association or group; or (c) by an individual
terrorist;
b) Organizing or directing others to commit financing of terrorism;
c) Attempt to commit the crimes of financing of terrorism and dealing with property
or funds of designated persons;
d) Conspiracy to commit the crimes of financing of terrorism and dealing with
property or funds of designated persons;
e) Cooperating, by previous or simultaneous acts, in the execution of either the
crime of financing of terrorism or conspiracy to commit the crime of financing of
terrorism;
f) Having knowledge of the commission of the crime of financing of terrorism but
without having participated therein as principal, taking part subsequent to the
commission of the crime of financing of terrorism by profiting from it or by
assisting the principal or principals in the crime of financing of terrorism to profit
by the effects of the crime, or by concealing or destroying the effects of the crime
in order to prevent its discovery, or by harboring, concealing or assisting in the
escape of the principal in the crime of financing of terrorism;
15. Bribery under Articles 210, 211 and 211-A of the Revised Penal Code, as amended,
and Corruption of Public Officers under Article 212 of the Revised Penal Code, as
amended:
a) A public officer commits bribery by -

12

(i) Agreeing to perform an act constituting a crime, in connection with the

performance of his official duties, in consideration of any offer, promise, gift or
present received by such officer, personally or through the mediation of
another;
(ii) Accepting gifts offered to him by reason of his office;
(iii) Refraining from arresting or prosecuting an offender who has committed a
crime punishable by reclusion perpetua and/or death in consideration of any
offer, promise, gift or present;
b) Any person commits corruption of public officials by offering or promising or
giving the gifts or presents referred to in Articles 210, 211 and 211-A of the
Revised Penal Code;
16. Frauds and Illegal Exactions and Transactions under Articles 213, 214, 215 and 216
of the Revised Penal Code, as amended:
a) Frauds committed by any public officer against the public treasury and similar
offenses by:
(i) Entering into an agreement with any interested party or speculator or making
use of any other scheme, to defraud the Government committed by a public
official in his official capacity in dealing with any person with regard to
furnishing supplies, the making of contracts, or the adjustment or settlement
of accounts relating to public property or funds;
(ii) Being entrusted with the collection of taxes, licenses, fees, and other
imposts:
1. Demanding, directly or indirectly, the payment of sums different from or
larger than those authorized by law;
2. Failing voluntarily to issue a receipt, as provided by law, for any sum of
money collected by him officially;
3. Collecting or receiving, directly or indirectly, by way of payment or
otherwise, things or objects of a nature different from that provided by
law;
b) Frauds committed by any public officer, who, taking advantage of his official
position, committed any of the frauds or deceits enumerated in Chapter Six, Title
Ten, Book two of the Revised Penal Code;
c) Any appointive public officer, who, during his incumbency, shall directly or
indirectly become interested in any transaction of exchange or speculation within
the territory subject to his jurisdiction;
d) Any public officer who, directly or indirectly, shall become interested in any
contract or business in which it is his official duty to intervene;
e) Any expert, arbitrator and private accountants who, directly or indirectly, shall
take part in any contract or transaction connected with the estate or property in
appraisal, distribution or adjudication of which they shall have acted, and to the
guardians and executors with respect to the property belonging to their wards or
estate;
17. Malversation of Public Funds and Property under Articles 217 and 222 of the Revised
Penal Code, as amended:
Malversation is committed by:
a) A public officer who, by reason of the duties of his office, is accountable for public
funds or property by:
(i) Appropriating the public funds or property;
(ii) Taking or misappropriating public funds or property;
(iii) Consenting, through abandonment or negligence, or permitting any other
person to take such public funds or property;
(iv) Being otherwise guilty of the misappropriation or malversation of public funds
or property;
b) Any private individual who, in any capacity whatever, have charge of national,
provincial or municipal funds, revenues or property and by any administrator or

13

depository of funds or property attached, seized or deposited by public authority,

even if such property belongs to a private individual.
18. Forgeries and Counterfeiting under Articles 163, 166, 167, 168, 169 and 176 of the
Revised Penal Code, as amended:
a) Making and importing and uttering false coins;
b) Forging treasury or bank notes on other documents payable to bearer; importing
and uttering such false or forged notes and documents;
c) Counterfeiting, importing and uttering instruments not payable to bearer;
d) Illegal possession and use of false treasury or bank notes and other instruments
of credit;
e) Forgery by giving to a treasury or bank note or any instrument payable to bearer
or to order mentioned therein, the appearance of a true and genuine document;
f) Forgery by erasing, substituting, counterfeiting or altering by any means the
figures, letters, words or signs contained therein;
g) Manufacturing and possession of instruments or implements for falsification;
19. Violations of Sections 4 to 6 of Republic Act No. 9208, otherwise known as the AntiTrafficking in Persons Act of 2003:
a) Recruiting, transporting, transferring, harboring, providing or receiving a person
by any means, including those done under the pretext of domestic or overseas
employment or training or apprenticeship, for the purpose of prostitution,
pornography, sexual exploitation, forced labor, slavery, involuntary servitude or
debt bondage;
b) Introducing or matching for money, profit or material, economic or other
consideration, any person or, as provided for under Republic Act No. 6955, any
Filipino woman to a foreign national, for marriage for the purpose of acquiring,
buying, offering, selling or trading him/her to engage in prostitution, pornography,
sexual exploitation, forced labor, slavery, involuntary servitude or debt bondage;
c) Offering or contracting marriage, real or simulated, for the purpose of acquiring,
buying, offering, selling or trading them to engage in prostitution, pornography,
sexual exploitation, forced labor or slavery, involuntary servitude or debt
bondage;
d) Undertaking or organizing tours and travel plans consisting of tourism packages
or activities for the purpose of utilizing and offering persons for prostitution,
pornography or sexual exploitation;
e) Maintaining or hiring a person to engage in prostitution or pornography;
f) Adopting or facilitating the adoption of persons for the purpose of prostitution,
pornography, sexual exploitation, forced labor, slavery, involuntary servitude or
debt bondage;
g) Recruiting, hiring, adopting, transporting or abducting a person, by means of
threat or use of force, fraud, deceit, violence, coercion, or intimidation for the
purpose of removal or sale of organs of said person;
h) Recruiting, transporting or adopting a child to engage in armed activities in the
Philippines or abroad;
i) Knowingly leasing or subleasing, using or allowing to be used any house, building
or establishment for the purpose of promoting trafficking in persons;
j) Producing, printing and issuing or distributing unissued, tampered or fake
counseling certificates, registration stickers and certificates of any government
agency which issues these certificates and stickers as proof of compliance with
government regulatory and pre-departure requirements for the purpose of
promoting trafficking in persons;
k) Advertising, publishing, printing, broadcasting or distributing, or causing the
advertisement, publication, printing, broadcasting or distribution by any means,
including the use of information technology and the internet, of any brochure,
flyer, or any propaganda material that promotes trafficking in persons;
l) Assisting in the conduct of misrepresentation or fraud for purposes of facilitating
the acquisition of clearances and necessary exit documents from government

14

m)

n)

o)
p)

agencies that are mandated to provide pre-departure registration and services for
departing persons for the purpose of promoting trafficking in persons;
Facilitating, assisting or helping in the exit and entry of persons from /to the
country at international and local airports, territorial boundaries and seaports who
are in possession of unissued, tampered or fraudulent travel documents for the
purpose of promoting trafficking in persons;
Confiscating, concealing, or destroying the passport, travel documents, or
personal documents or belongings of trafficked persons in furtherance of
trafficking or to prevent them from leaving the country or seeking redress from the
government or appropriate agencies;
Knowingly benefitting from, financial or otherwise, or making use of, the labor or
services of a person held to a condition of involuntary servitude, forced labor, or
slavery; and
Qualified trafficking in persons;

20. Violations of Sections 78 to 79 of Chapter IV of Presidential Decree No. 705,

otherwise known as the Revised Forestry Code of the Philippines, as amended:
a) Cutting, Gathering and/or collecting Timber, or Other Forest Products Without
License;
b) Unlawful Occupation or Destruction of Forest Lands and Grazing Lands;
21. Violations of Sections 86 to 106 of Chapter IV of Republic Act No. 8550, otherwise
known as the Philippine Fisheries Code of 1998:
a)
b)
c)
d)
e)
f)
g)
h)
i)
j)
k)
l)
m)
n)
o)
p)
q)
r)
s)
t)
u)
v)
w)
x)
y)

Unauthorized fishing or engaging in other unauthorized fishing activities;

Poaching in Philippine waters;
Fishing through explosives, noxious or poisonous substances and/or electricity;
Use of fine mesh net;
Use of active gear in the municipal waters and bays and other fishery
management areas;
Coral exploitation and exportation;
Muro-Ami, other methods and gear destructive to coral reefs and other marine
habitat;
Illegal use of superlights;
Conversion of mangroves;
Fishing in overfished area and during closed season;
Fishing in fishery reserves, refuge and sanctuaries;
Fishing or taking of rare, threatened or endangered species;
Capture of sabalo and other breeders/spawners;
Exportation of breeders, spawners, eggs or fry;
Importation or exportation of fish or fishery species;
Violation of catch ceilings;
Aquatic pollution;
Failure to comply with minimum safety standards;
Failure to conduct a yearly report on all fishponds, fish pens and fish cages;
Gathering and marketing of shell fishes;
Obstruction to navigation or flow and ebb of tide in any stream, river, lake or bay;
Construction and operation of fish corrals/traps, fish pens and fish cages;
Commercial fishing vessel operators employing unlicensed fisherfolk or
fishworker or crew;
Obstruction of defined migration paths;
Obstruction to fishery law enforcement officer;

22. Violations of Sections 101 to 107, and 110 of Republic Act No. 7942, otherwise known
as the Philippine Mining Act of 1995:
a) Knowingly presenting any false application, declaration or evidence to the
Government or publishing or causing to be published any prospectus or other

15

b)
c)
d)
e)
f)
g)
h)

information containing any false statement relating to mines, mining operations or

mineral agreements, financial or technical assistance agreements and permits;
Illegal exploration;
Theft of minerals;
Destruction of mining structures;
Mines arson;
Willful damage to a mine;
Illegal obstruction to permittees or contractors;
Other violations of the mining act and its implementing rules and regulations;

23. Violations of Section 27 (c), (e), (f), (g) and (i) of Republic Act No. 9147, otherwise
known as the Wildlife Resources Conservation and Protection Act:
a)
b)
c)
d)
e)
f)
g)
h)
i)
j)

Effecting the following acts in critical habitats:

Dumping of waste products detrimental to wildlife;
Squatting or otherwise occupying any portion of the critical habitat;
Mineral exploration and/or extraction;
Burning;
Logging;
Quarrying;
Trading of wildlife;
Collecting, hunting or possessing wildlife, their by-products and derivatives;
Gathering or destroying of active nests, nest trees, host plants and the like;
and
k) Transporting of wildlife;
24. Violations of Section 7(b) of Republic Act No. 9072, otherwise known as the National
Caves and Cave Resources Management Protection Act:
a) Gathering, collecting, possessing, consuming, selling, bartering or exchanging or
offering for sale without authority any cave resources;
25. Violation of Republic Act No. 6539, otherwise known as the Anti-Carnapping Act of
2002, as amended:
a) Taking, with intent to gain, of a motor vehicle belonging to another without the
latters consent, or by means of violence against or intimidation of persons, or by
using force upon things;
26. Violation of Sections 1, 3, and 5 1 of Presidential Decree No. 1866, as amended,
otherwise known as the decree Codifying the Laws on Illegal/Unlawful Possession,
1

Sec. 1 and 5 has been expressly repealed by RA 10591 (May 29, 2013) and all laws inconsistent with it (Sec.
45 - repealing clause) effectively repealing also coverage by the AMLA of Sec. 1 and 5. There are similar
provisions under Sec. 32 and 34 of RA 10591 (new provisions, not amendatory to Sec. 1 and 5 of PD 1866). In
effect the following are still unlawful activities:
1.
2.

3.
4.

Unlawful acquisition or possession of firearms and ammunition (Sec. 28, R.A. No. 10591);
Unlawful manufacture, sale or disposition of the following:
a.
Firearms;
b.
Ammunition;
c.
Parts of firearms or ammunition; and/or
d.
Machinery, tool or instrument to be used or intended to be used in the
manufacture of firearms and ammunition (Sec. 32, R.A. No. 10591);
Unlawful manufacture, sale, acquisition, disposition or possession of explosives (Sec. 3,
P.D. No. 1866); and
Tampering, obliterating or altering the serial number of any firearm (Sec. 34, R.A. No.
10591).

While the following are now decriminalized:

1.

Unlawful possession and acquisition of machinery, tool or instrument used or

intended to be used in the manufacture of firearms and ammunitions. (Sec. 1,
P.D. No. 1866)

16

Manufacture, Dealing In, Acquisition or Disposition of Firearms, Ammunition or

Explosives:
a) Unlawful manufacture, sale, acquisition, disposition or possession of firearms or
ammunition or instruments used or intended to be used in the manufacture of
firearms or ammunition;
b) Unlawful manufacture, sales, acquisition, disposition or possession of explosives;
c) Tampering of firearms serial number;
27. Violation of Presidential Decree No. 1612, otherwise known as the Anti-Fencing Law:
a) Buying, receiving, possessing, keeping, acquiring, concealing, selling or
disposing of, or buying and selling, or in any manner dealing in any article, item,
object or anything of value which a person knows, or should be known to him, to
have been derived from the proceeds of the crime of robbery or theft;
28. Violation of Section 6 of Republic Act No. 8042, otherwise known as the Migrant
Workers and Overseas Filipinos Act of 1995, as amended by Republic Act No. 10022:
a) Illegal recruitment by any act of canvassing, enlisting, contracting, transporting,
utilizing, hiring or procuring workers and referring, contract services, promising or
advertising for employment abroad, whether for profit or not, when undertaken by
non-licensee or non-holder of authority contemplated under the Labor Code of
the Philippines, as amended;
b) Illegal recruitment is committed by any person, whether a non-licensee, nonholder, licensee or holder of authority by (i)
Charging or accepting, directly or indirectly, any amount greater than that
specified in the schedule of allowable fees prescribed by the Secretary of
Labor and Employment, or to make a worker pay or acknowledge any
amount greater than that actually received by him as a loan or advance;
(ii) Furnishing or publishing any false notice or information or document in
relation to recruitment or employment;
(iii) Giving any false notice, testimony, information or document or commit any
act of misrepresentation for the purpose of securing a license or authority
under the Labor Code, or for the purpose of documenting hired workers
with the POEA, which include the act of reprocessing workers through a job
order that pertains to nonexistent work, work different from the actual
overseas work, or work with a different employer whether registered or not
with the POEA;
(iv) Including or attempting to induce a worker already employed to quit his
employment in order to offer him another unless the transfer is designed to
liberate a worker from oppressive terms and conditions of employment;
(v) Influencing or attempting to influence any person or entity not to employ
any worker who has not applied for employment through his agency or who
has formed, joined or supported, or has contacted or is supported by any
union or workers organization;
(vi) Engaging in the recruitment or placement of workers in jobs harmful to
public health or morality or to the dignity of the Republic of the Philippines;
(vii) Failing to submit reports on the status of employment, placement
vacancies, remittance of foreign exchange earnings, separation from jobs,
departures and such other matters or information as may be required by
the Secretary of Labor and Employment;
(viii) Substituting or altering to the prejudice of the worker, employment contracts
approved and verified by the Department of Labor and Employment from
the time of actual signing thereof by the parties up to and including the
2.

Unauthorized defacing of the serial number of any firearm. (Sec. 5, P.D. No.
1866)]

17

period of the expiration of the same without the approval of the Department
of Labor and Employment;
(ix) For an officer or agent of a recruitment or placement agency to become an
officer or member of the Board of any corporation engaged in travel agency
or to be engaged directly or indirectly in the management of travel agency;
(x) Withholding or denying travel documents from applicant workers before
departure for monetary or financial considerations, or for any other
reasons, other than those authorized under the Labor Code and its
implementing rules and regulations;
(xi) Failing to actually deploy a contracted worker without valid reason as
determined by the Department of Labor and Employment;
(xii) Failing to reimburse expenses incurred by the worker in connection with his
documentation and processing for purposes of deployment, in cases where
the deployment does not actually take place without the workers fault.
Illegal recruitment when committed by a syndicate or in large scale shall be
considered an offense involving economic sabotage; and
(xiii) Allowing a non-Filipino citizen to head or manage a licensed
recruitment/manning agency;
29. Violation of Republic Act No. 8293, otherwise known as the Intellectual Property Code
of the Philippines, as amended:
a) Violation of the Law on Patents
(i) Repetition of infringement;
b) Violation of the Law on Trademarks, Service Marks and Trade Names
(i) Infringement;
(ii) Unfair competition;
(iii) False designation of origin; false description or representation;
c) Violation of the Law on Copyright
(i) Infringement;
30. Violation of Section 4 of Republic Act No. 9995, otherwise known as the Anti-Photo
and Video Voyeurism Act of 2009:
a) Taking of photo or video coverage of a person or group of persons performing
sexual act or any similar activity or to capturing an image of the private area of a
person(s) such as the naked or undergarment clad genitals, pubic area, buttocks
or female breast without the consent of the person(s) involved and under
circumstances in which the person(s) has/have a reasonable expectation of
privacy;
b) Copying or reproducing, or causing to be copied or reproduced, such photo or
video or recording of sexual act or any similar activity with or without
consideration;
c) Selling or distributing, or causing to be sold or distributed, such photo or video or
recording of sexual act, whether it be the original copy or reproduction thereof;
d) Publishing or broadcasting, or causing to be published or broadcast, whether in
print or broadcast media, or showing or exhibiting the photo or video coverage or
recordings of such sexual act or any similar activity through VCD/DVD, internet,
cellular phones and other similar means or device;
31. Violation of Section 4 of Republic Act No. 9775, otherwise known as the Anti-Child
Pornography Act of 2009:
a) Hiring, employing, using, persuading, inducing or coercing a child to perform in
the creation or production of any form of child pornography;
b) Producing, directing, manufacturing or creating any form of child pornography;
c) Publishing, offering, transmitting, selling, distributing, broadcasting, advertising,
promoting, exporting or importing any form of child pornography;

18

d) Possessing any form of child pornography with the intent to sell, distribute,
publish, or broadcast;
e) Knowingly, willfully and intentionally providing a venue for the commission of
prohibited acts as, but not limited to, dens, private rooms, cubicles, cinemas,
houses or in establishments purporting to be a legitimate business;
f) For film distributors, theaters and telecommunication companies, by themselves
or in cooperation with other entities, distributing any form of child pornography;
g) For a parent, legal guardian or person having custody or control of a child to
knowingly permit the child to engage, participate or assist in any form of child
pornography;
h) Engaging in the luring or grooming of a child;
i) Engaging in pandering of any form of child pornography;
j) Willfully accessing any form of child pornography;
k) Conspiring to commit any of the prohibited acts of child pornography; and
l) Possessing any form of child pornography;
32. Violations of Sections 5, 7, 8, 9, 10 (c), (d) and (e), 11, 12 and 14 of Republic Act No.
7610, otherwise known as the Special Protection of Children Against Abuse,
Exploitation and Discrimination:
a) Engaging in or promoting, facilitating or inducing child prostitution;
b) Committing the act of sexual intercourse or lascivious conduct with a child
exploited in prostitution or subject to other sexual abuse;
c) Deriving profit or advantage, whether as manager or owner of the establishment
where the prostitution takes place, or of the sauna, disco, bar, resort, place of
entertainment or establishment serving as a cover or which engages in
prostitution in addition to the activity for which the license has been issued to said
establishment;
d) Engaging in trading and dealing with children including, but not limited to the act
of buying and selling of a child for money, or for any other consideration, or
barter;
e) Attempt to commit child trafficking;
f) Hiring, employing, using, persuading, inducing or coercing a child to perform in
obscene exhibitions and indecent shows, whether live or in video, or model in
obscene publications or pornographic materials or to sell or distribute the said
materials;
g) Inducing, delivering or offering a minor to any one prohibited by Republic Act No.
7610 to keep or have in his company a minor;
h) Any person, owner, manger or one entrusted with the operation of any public or
private place of accommodation, whether for occupancy, food, drink or otherwise,
including residential places, who allows any person to take along with him to such
place or places any minor;
i) Using, coercing, forcing or intimidating a street child or any other child to:
(i) Beg or use begging as a means of living;
(ii) Act as conduit or middlemen in drug trafficking or pushing; or
(iii) Conduct any illegal activities;
j) Establishments or enterprises promoting, facilitating, or conducting activities
constituting child prostitution and other sexual abuse, child trafficking, obscene
publications and indecent shows, and other acts of abuse; and
k) Employment of children except as otherwise provided by law;
33. Fraudulent practices and other violations under Republic Act No. 8799, otherwise
known as the Securities Regulation Code of 2000:
a) Sale, offer or distribution of securities within the Philippines without a registration
statement duly filed with and approved by the SEC;
b) Violation of reportorial requirements imposed upon issuers of securities;

19

c) Manipulation of security prices by creating a false or misleading appearance of

active trading in any listed security traded in an Exchange or any other trading
market;
d) Manipulation of security prices by effecting, alone or with others, a series of
transactions in securities that raises their prices to induce the purchase of a
security, whether of the same or different class, of the same issuer or of a
controlling, controlled or commonly controlled company by others;
e) Manipulation of security prices by effecting, alone or with others, a series of
transactions in securities that depresses their price to induce the sale of a
security, whether of the same or different class, of the same issuer or of a
controlling, controlled or commonly controlled company by others;
f) Manipulation of security prices by effecting, alone or with others, a series of
transactions in securities that creates active trading to induce such a purchase or
sale though manipulative devices such as marking the close, painting the tape,
squeezing the float, hype and dump, boiler room operations and such other
similar devices;
g) Manipulation of security prices by circulating or disseminating information that the
price of any security listed in an Exchange will or is likely to rise or fall because of
manipulative market operations of any one or more persons conducted for the
purpose of raising or depressing the price of the security for the purpose of
inducing the purchase or sale of such security;
h) Manipulation of security prices by making false or misleading statements with
respect to any material fact, which he knew or had reasonable ground to believe
was so false and misleading, for the purpose of inducing the purchase or sale of
any security listed or traded in an Exchange;
i) Manipulation of security prices by effecting, alone or with others, any series of
transactions for the purchase and/or sale of any security traded in an Exchange
for the purpose of pegging, fixing or stabilizing the price of such security, unless
otherwise allowed by the Securities Regulation Code or by the rules of the SEC;
j) Sale or purchase of any security using any manipulative deceptive device or
contrivance;
k) Execution of short sales or stop-loss order in connection with the purchase or
sale of any security not in accordance with such rules and regulations as the SEC
may prescribe as necessary and appropriate in the public interest or the
protection of the investors;
l) Employment of any device, scheme or artifice to defraud in connection with the
purchase and sale of any securities;
m) Obtaining money or property in connection with the purchase and sale of any
security by means of any untrue statement of a material fact or any omission to
state a material fact necessary in order to make the statements made, in the light
of the circumstances under which they were made, not misleading;
n) Engaging in any act, transaction, practice or course of action in the sale and
purchase of any security which operates or would operate as a fraud or deceit
upon any person;
o) Insider trading;
p) Engaging in the business of buying and selling securities in the Philippines as a
broker or dealer, or acting as a salesman, or an associated person of any broker
or dealer without any registration from the Commission;
q) Employment by a broker or dealer of any salesman or associated person or by an
issuer of any salesman, not registered with the SEC;
r) Effecting any transaction in any security, or reporting such transaction, in an
Exchange or using the facility of an Exchange which is not registered with the
SEC;
s) Making use of the facility of a clearing agency which is not registered with the
SEC;
t) Violations of margin requirements;
u) Violations on the restrictions on borrowings by members, brokers and dealers;
v) Aiding and Abetting in any violations of the Securities Regulation Code;
w) Hindering, obstructing or delaying the filing of any document required under the
Securities Regulation Code or the rules and regulations of the SEC;

20

x) Violations of any of the provisions of the implementing rules and regulations of

the SEC;
y) Any other violations of any of the provisions of the Securities Regulation Code;
34. Felonies or offenses of a similar nature to the aforementioned unlawful activities that
are punishable under the penal laws of other countries.
In determining whether or not a felony or offense punishable under the penal laws of
other countries is of a similar nature, as to constitute an unlawful activity under the
AMLA, as amended, the nomenclature of said felony or offense need not be identical to
any of the unlawful activities listed under Section 3.13.

RULE IV - MONEY LAUNDERING

Section 4.Money Laundering Offense. Money laundering is committed by any person who,
knowing that any monetary instrument or property represents, involves, or relates to the proceeds of
any unlawful activity:
a) transacts said monetary instrument or property;
b) converts, transfers, disposes of, moves, acquires, possesses or uses said monetary
instrument or property;
c) conceals or disguises the true nature, source, location, disposition, movement or
ownership of or rights with respect to said monetary instrument or property;
d) attempts or conspires to commit money laundering offenses referred to in paragraphs
(a), (b) or (c);
e) aids, abets, assists in or counsels the commission of the money laundering offenses
referred to in paragraphs (a), (b) or (c) above; and
f) performs or fails to perform any act as a result of which he facilitates the offense of
money laundering referred to in paragraphs (a), (b) or (c) above.
Money laundering is also committed by any covered person who, knowing that a covered or
suspicious transaction is required under the AMLA, as amended, to be reported to the Anti-Money
Laundering Council (AMLC), fails to do so. (a)

RULE V- JURISDICTION
Section 5. Jurisdiction in Money Laundering Cases. The Regional Trial Courts shall have the jurisdiction to try all cases on money laundering. Those
committed by public officers and private persons who are in conspiracy with such public officers shall
be under the jurisdiction of the Sandiganbayan.

RULE VI PROSECUTION
Section 6. Prosecution of Money Laundering.
6.1.

Parties and Proceedings a) Any person may be charged with and convicted of both the offense of money
laundering and the unlawful activity as defined under Section 3.i of the AMLA, as
amended.
b) The prosecution of any offense or violation under the AMLA, as amended, shall
proceed independently of any proceeding relating to the unlawful activity. (n)

21

6.2.

Complaint for money laundering -When the AMLC finds, after investigation, that there is
probable cause to charge any person with a money laundering offense under Section 4 of
the AMLA, as amended, it shall cause a complaint to be filed, pursuant to Section 7 (4) of
the AMLA, as amended, before the Department of Justice or the Office of the Ombudsman,
which shall then conduct the preliminary investigation of the case.

6.3.

Information -If after due notice and hearingin the preliminary investigation proceedings, the
Department of Justice, or the Office of the Ombudsman, as the case may be, finds probable
cause for a money laundering offense, it shall file the necessary information before the
Regional Trial Courts or the Sandiganbayan.

6.4.

Trial - Trial for the money laundering offense shall proceed in accordance with the Revised
Rules of Criminal Procedures or the Revised Internal Rules of the Sandiganbayan, as the
case may be. (a)

6.5.

Proof of Knowledge - Knowledge of the offender that any monetary instrument or property
represents, involves, or relates to the proceeds of an unlawful activity or that any monetary
instrument or property is required under the AMLA, as amended, to be disclosed and filed
with the AMLC, may be established by direct evidence or inferred from the attendant
circumstances.

6.6.

Elements of money laundering to be proven beyond reasonable doubt - All the

elements of every money laundering offense under Section 4 of the AMLA, as amended,
must be proved by evidence beyond reasonable doubt,

6.7.

Unlawful activity - No element of the unlawful activity, however, including the identity of the
perpetrators and the details of the actual commission of the unlawful activity need be
established by proof beyond reasonable doubt. The elements of the offense of money
laundering are separate and distinct from the elements of the felony or offense constituting
the unlawful activity.

RULE VII - CREATION OF THE

ANTI-MONEY LAUNDERING COUNCIL (AMLC)
Section 7.The Anti-Money Laundering Council.
7.1. Composition - The Anti-Money Laundering Council is hereby created and shall be
composed of the Governor of the Bangko Sentral ng Pilipinas as Chairperson, the
Commissioner of the Insurance Commission and the Chairperson of the Securities and
Exchange Commission as Members.
7.2.

Unanimous Decision - The AMLC shall act unanimously in discharging its functions as
defined in the AMLA, as amended, and in these Rules. However, in the case of the
incapacity, absence or disability of any member to discharge his functions, the officer duly
designated or authorized to discharge the functions of the Governor of the BSP, the
Chairperson of the SEC or the Insurance Commissioner, as the case may be, shall act in
his stead in the AMLC.

7.3.

Functions - The functions of the AMLC are defined hereunder:

1)
to require and receive covered or suspicious transaction reports from covered
persons;
2)
to issue orders addressed to the appropriate Supervising Authority or the covered
person to determine the true identity of the owner of any monetary instrument or
property subject of a covered or suspicious transaction report, or request for
assistance from a foreign State, or believed by the Council, on the basis of
substantial evidence, to be, in whole or in part, wherever located, representing,

22

3)

4)

5)
6)
7)

8)
9)
10)

11)

involving, or related to, directly or indirectly, in any manner or by any means, the
proceeds of any unlawful activity;
to investigate suspicious transactions and covered transactions deemed suspicious
after an investigation by the AMLC, money laundering activities and other violations
of the AMLA, as amended. In the conduct of its investigation, the AMLC may:
(i) access all necessary documents and information, except in cases where a
court order is necessary for the conduct of inquiry into or examination of
transactions, deposits or investments, including the related accounts;
(ii) take witness statements; (n)
(iii) use a wide range of investigative techniques suitable for the investigation of
money laundering and other violations of the AMLA, as amended; and(n)
(iv) request relevant documents and information from domestic government
agencies, foreign states, its financial intelligence unit, law enforcement
agency/ies, and financial regulators, or the United Nations and other
international organizations or entities.
to file with the Court of Appeals, ex-parte, through the Office of the Solicitor
General:
(i) a petition for the freezing of any monetary instrument or property that is in any
way related to an unlawful activity as defined in Section 3.13 hereof;(n)
(ii) an application for authority to inquire into or examine any particular deposit or
investment, including related accounts, with any banking institution or non-bank
financial institution;
to institute civil forfeiture proceedings and all other remedial proceedings through
the Office of the Solicitor General;
to file complaints with the Department of Justice or the Office of the Ombudsman
for the prosecution of money laundering offenses and other violations under the
AMLA, as amended;
to formulate and implement such measures as may be inherent, necessary, implied,
incidental and justified under the AMLA, as amended, to counteract money
laundering, which may include the exercise of visitorial powers, examination and
audit to ensure compliance of covered persons with the AMLA, as amended, these
Rules and pertinent resolutions and directives issued by the AMLC. Subject to such
limitations provided by law, the AMLC is authorized under Section 7 (7) of the
AMLA, as amended, to establish an information sharing system that will enable the
AMLC to store, track, analyze and investigate money laundering transactions and
to disseminate results of its analysis and investigation to competent authorities for
the resolute prevention, detection and prosecution of money laundering offenses
and other violations of the AMLA, as amended. For this purpose, the AMLC shall
install a computerized system that will be used in the creation and maintenance of
an information database.(second sentence, item 7, Old Rules)
to receive and take action in respect of any request from foreign states for
assistance in their own anti-money laundering operations as provided in the AMLA,
as amended, subject to the requirements under Section 15 hereof.
to develop educational programs including awareness campaign on the pernicious
effects, the methods and techniques used and the viable means of preventing
money laundering and the effective ways of prosecuting and punishing offenders;
to enlist the assistance of any branch, department, bureau, office, agency or
instrumentality of the government, including government-owned and -controlled
corporations, in undertaking any and all anti-money laundering operations, which
may include the use of its personnel, facilities and resources for the more resolute
prevention, detection and investigation of money laundering offenses and
prosecution of offenders. The AMLC may require the intelligence units of the Armed
Forces of the Philippines, the Philippine National Police, the Department of
Finance, the Department of Justice, as well as their attached agencies, and other
domestic or transnational governmental or non-governmental organizations or
groups to divulge to the AMLC all information that may, in any way, facilitate the
resolute prevention, investigation and prosecution of money laundering offenses
and other violations of the AMLA, as amended, and other relevant laws and
regulations;
to require the Land Registration Authority and all its Registries of Deeds to submit
to the AMLC, reports on all real estate transactions involving an amount in excess

23

12)
13)

of Five hundred thousand pesos (P500,000.00) within fifteen (15) days from the
date of registration of the transaction, in a form to be prescribed by the AMLC. The
AMLC may also require the Land Registration Authority and all its Registries of
Deeds to submit copies of relevant documents of all real estate transactions.(n)
to issue and implement rules, regulations, orders and resolutions as may be
necessary and appropriate to effectively implement the AMLA, as amended, and
other relevant laws and regulations; (item 11, Old Rules)
to impose administrative sanctions pursuant to Section 16.5. for the violation of
laws, rules, regulations, orders and resolutions issued pursuant thereto, as may be
determined by the AMLC; and (item 12, Old Rules)

7.4. Meetings- The AMLC shall meet once a month, or as may be necessary at the call of the
Chairperson.

RULE VIII - CREATION OF A SECRETARIAT

Section 8. The Anti-Money Laundering Council Secretariat. - The Council shall be assisted by the
AMLC Secretariat in the discharge of its functions.
8.1. The Executive Director -The Secretariat shall be headed by an Executive Director who
shall be appointed by the AMLC for a term of five (5) years. He must be a member of the
Philippine Bar, at least thirty-five (35) years of age, must have served for at least five (5)
years either at the BSP, the SEC or the IC and of good moral character, unquestionable
integrity and known probity. He shall be considered a full-time permanent employee of the
BSP with the rank of Assistant Governor, and shall be entitled to such benefits and subject
to rules and regulations, as well as prohibitions, as are applicable to officers of similar rank.
8.2. Composition - In organizing the Secretariat, the AMLC may choose from those who have
served, continuously or cumulatively, for at least five (5) years in the BSP, the SEC or the
IC. All members of the Secretariat shall be considered regular employees of the BSP and
shall be entitled to such benefits and subject to such rules and regulations as are applicable
to BSP employees of similar rank.
8.3. Detail and Secondment - The AMLC is authorized under Section 7(10) of the AMLA, as
amended, to enlist the assistance of the BSP, the SEC or the IC, or any other branch,
department, bureau, office, agency or instrumentality of the government, including
government-owned and controlled corporations, in undertaking any and all anti-money
laundering operations. This includes the use of any member of their personnel who may be
detailed or seconded to the AMLC, subject to existing laws and Civil Service Rules and
Regulations. Detailed personnel shall continue to receive their salaries, benefits and
emoluments from their respective mother units. Seconded personnel shall receive, in lieu of
their respective compensation packages from their respective mother units, the salaries,
emoluments and all other benefits which their AMLC Secretariat positions are entitled to.
8.4. Information Security and Confidentiality The AMLC and its Secretariat shall securely
protect information received or processed and shall not reveal, in any manner, any
information known to them by reason of their office. This prohibition shall apply even after
their separation from the AMLC.
The AMLC shall formulate rules governing information exchange and dissemination, the
security and confidentiality of such information, including procedures for handling, storage,
and protection of, as well as access to such information. (n)

RULE IX - PREVENTIVE MEASURES

Section 9. Prevention of Money Laundering. -General Requirements for Customer due diligence,
Record Keeping, and Reporting
9.1.

Customer Identification and Verification. Covered persons shall establish and record the
true identity of its clients based on official documents. They shall maintain a system of

24

verifying the true identity of their clients and, in case of corporate clients, require a system
of verifying their legal existence and organizational structure, as well as the authority and
identification of all persons purporting to act on their behalf. Covered persons shall
establish appropriate systems and methods based on internationally compliant standards
and adequate internal controls for verifying and recording the true and full identity of their
customers. (Rule 9.a.1, Old Rules)
9.1.1. Prohibition against opening of Accounts without Face-to-face Contact. No
new account shall be opened and created by any covered person without face-toface contact with their client, except under the following circumstances : (Rule
9.a.7, Old Rules)
a) Outsourcing of the Conduct of Face-to-Face Contact. Subject to the rules
promulgated for the purpose by the Supervising Authorities, a covered person
may outsource to a counter-party the conduct of the requisite face-to-face
contact. Provided that the ultimate responsibility for identifying the customer shall
lie with the covered person. (Rule 9.a.10, Old Rules)
The covered person shall ensure that the employees or representatives of the
counter-party responsible for the face-to-face contact undergo similar training
program as that of its own employees.
b) Third party reliance. Subject to the rules promulgated for the purpose by the
Supervising Authorities, where a third party has already conducted the requisite
face-to-face contact and the identification requirements on its own customer in
accordance with these Rules and its own Money Laundering and Terrorist
Financing Prevention Program, a covered person may rely on the representation
of the third party that it has already undertaken said face-to-face contact and
customer identification requirements. (Rule 9.a.11, Old Rules) (a)
Notwithstanding the above, the ultimate responsibility for identifying and
establishing the full and true identity of the customer remains with the Covered
Person relying on the third party.
Provided that, in cases where the customer is assessed as high risk by the third
party, the covered person shall conduct its separate enhanced due diligence
procedure.
Third Party shall refer to (a) covered persons as defined under the AMLA, as
amended, and these Rules, or (b) a financial institution or designated nonfinancial business and profession operating outside of the Philippines that is
covered by equivalent customer identification requirements.(n)
b.1 Where the Customer Transacts Through a Trustee, Nominee, Agent or
Intermediary which is a Third Party. A covered person may rely on the
customer identification process undertaken by a third party subject to the rules on
Third Party reliance to be promulgated by the Supervising Authorities; Provided
that, in cases where the customer is assessed as high risk by the third party, the
covered person shall conduct its separate enhanced due diligence procedure.
(Rule 9.a.14, Old Rules) (a)
c) Information and Communication Technology (ICT) assisted face-to-face
interview Subject to the rules promulgated for the purpose by the Supervising
Authority, a face-to-face interview through the use of ICT, such as, but not limited
to, Voice over Internet Protocol (VoIP), Peer to Peer (P2P), Integrated Services
Digital Network (ISDN), may be allowed to give individuals more access to
services being provided by covered persons, provided that the covered person is
in possession of and has verified the identification documents submitted by the
prospective client prior to the interview and that the entire process/procedure is
documented.(n)

25

9.1.2. Minimum Information/Documents Required for Individual Customers - Covered

persons shall require customers to produce original documents of identity issued by
an official authority, bearing a photograph of the customer. Examples of such
documents are identity cards and passports. Subject to the rules promulgated for the
purpose by the Supervising Authorities,the following information and those that will be
required by the latter shall be obtained from individual customers and authorized
signatory/ies of corporate and juridical entities:
a)
b)
c)
d)
e)
f)
g)
h)
i)
j)

Name;
Name/s of beneficial owner/s, if applicable;
Present address;
Permanent address;
Date and place of birth;
Contact numbers;
Nationality;
Nature of work and name of employer or nature of self-employment/business;
Specimen signature (if required);
Social Security System or Government System Insurance Service Number, and
Tax Identification Number (if any)
k) Purpose;
l) Source of funds or property; and
m) Beneficiaries in case of insurance contracts, whenever applicable.
9.1.3.1 Valid Identification Documents - Customers and the authorized
signatory/ies of a corporate or juridical entity who engage in a transaction
with a covered person for the first time shall be required to present the
original and submit a clear copy of at least one (1) valid Identification (ID)
Card/Document issued by an official authority.
For this purpose, the term official authority shall refer to any of the following:
a)
b)
c)
d)

Government of the Republic of the Philippines;

Its political subdivisions and instrumentalities;
Government-Owned or -Controlled Corporations (GOCCs); and
Covered persons registered with or supervised or regulated either by the
BSP, SEC or IC.

In case the ID Card/Document does not bear any photo of the customer or
authorized signatory/iesof a corporate or juridical entity or the photo bearing
ID/Document or a copy thereof does not clearly show the face of the
customer or authorized signatory, a covered person may utilize its own
technology to take the photo of the customer or authorized signatory.
Where the customer or authorized signatory is a foreign national, covered
persons should require said foreign national to present his/her passport or
Alien Certificate of Registration issued by the Bureau of Immigration. (n)
9.1.3. Minimum Information/Documents Required for Corporate and Juridical Entities
or Single Proprietorships - The following minimum information/documents and
those that will be required by the Supervising Authorities shall be obtained from
customers that are corporate or juridical entities, single proprietorship, including shell
companies and corporations which have no business substance in their own right but
through which financial transactions may be conducted, to ensure that the customer
has not been dissolved or is not in the process of dissolution or winding up or that its
business or operations has not been terminated:

26

a) Certificates of Registration issued by the Department of Trade and Industry (DTI)

for single proprietors, or by the Securities and Exchange Commission for
corporations and partnerships, and by the BSP for money changers/foreign
exchange dealers and remittance agents;
b) Articles of Incorporation/Partnership and by-laws;
c) Latest
General
Information
Sheet
which
lists
the
names
of
directors/trustees/partners, principal stock holders owning at least twenty percent
(20%) of the outstanding capital stock and primary officers such as the President
and Treasurer;
d) Names of beneficial owners and beneficiaries of the corporate and/or juridical
entities;
Beneficial owners shall refer to any individual, who, directly or indirectly,
through any contract, arrangement, understanding, relationship or otherwise,
owns 25 percent or more of the equity interests of a juridical entity customer
and/or an individual with significant responsibility to control, manage, or direct a
legal entity customer, including:
An executive officer or senior manager (e.g., a Chief Executive Officer, Chief
Financial Officer, Chief Operating Officer, Managing Member, General Partner,
President, Vice President, or Treasurer); or
(ii) Any other individual who regularly performs similar functions.(n)
(i)

e) Board or Partners resolution duly certified by the Corporate/Partners Secretary

authorizing the signatory to sign on behalf of the entity;
f) For entities registered outside of the Philippines, similar documents and/or
information shall be obtained duly authenticated by a senior officer of the covered
person assigned in the country of registration, in the absence of said officer, the
documents should be authenticated by the Philippine Consulate, company
register or notary public, where said entities are registered.
Dealings with shell companies and corporations, being legal entities which have no
business substance in their own right but through which transactions may be
conducted, should be undertaken with extreme caution. (Rule 9.a.5, Old Rules)
9.1.4. Outsourcing of the gathering of minimum information and/or documents Subject to the rules promulgated for the purpose by the Supervising Authorities, a
covered person may outsource to a counter-party the gathering of the minimum
information and/or documents required to be obtained by these Rules provided that
the ultimate responsibility for knowing the customer and for keeping the identification
documents shall lie with the covered person. The covered person outsourcing the
activity shall likewise ensure that the employees or representatives of the counterparty establishing the true and full identity of the customer undergo equivalent training
program as that of the covered persons own employees undertaking a similar activity.
(Rule 9.a.12, Old Rules).
9.1.5. Prohibition against Certain Accounts - Covered persons shall maintain customers
account only in the true and full name of the account owner/s or holder/s. The
provisions of existing laws to the contrary notwithstanding, anonymous accounts,
accounts under fictitious names, and all other similar accounts shall be absolutely
prohibited. (Rule 9.a.6, Old Rules)
9.1.6. Shell Company/Shell Bank/ Bearer Share Entities - A covered person shall
undertake business/banking relationship with a shell company with extreme caution
and always apply enhanced customer due diligence under Section 9.1.9.2 on both the
entity and its beneficial owners.
No shell bank shall be allowed to operate or be established in the Philippines. A
covered person shall refuse to deal, or enter into, or continue, correspondent banking
relationship with them. It shall likewise guard against establishing relations with foreign

27

financial institutions that permit their accounts to be used by shell banks.(Rule 9.a.19,
Old Rules)
A covered person dealing withbearer share entities shall be required to conduct
enhanced due diligence on said entity and its existing stockholders and/or beneficial
owners at the time of opening of the account. These entities shall undergo on-going
monitoring at all times and the list of stockholders and/or beneficial owners shall be
updated within thirty (30) days after every transfer of ownership and the appropriate
enhanced due diligence applied to the new stockholders and/or beneficial owners. (n)
9.1.7. Ongoing monitoring of customers, accounts and transactions - A covered
person shall, on the basis of materiality and risk, update, no later than once in every
three (3) years, unless a different period is imposed by the Supervising Authority, all
identification information and documents of existing customers required to be
obtained under the AMLA, as amended, and these Rules.
A covered person shall establish a system that will enable it to understand the normal
and reasonable account or business activity of customers and to detect unusual or
suspicious patterns of account or business activity. A risk-and-materiality based
ongoing monitoring of customers accounts and transactions shall be part of a
covered persons customer due diligence procedures to ensure that the customers
accounts and transactions are consistent with the covered persons knowledge of
their customer, the latters commercial activities, risk profile, and the source of funds,
whenever required. (Rule 9.a.15, Old Rules)(a)
9.1.8. Risk-based Customer Identification and Acceptance Process All covered
person shall develop clear, written and graduated customer acceptance policies and
procedures including a set of criteria for customers that are likely to pose low, normal
or high risk to their operations as well as the standards in applying reduced, normal
and enhanced customer due diligence including a set of conditions for the denial of
account opening or services.
Covered Persons, in pursuing these Rules, shall ensure that the financially or socially
disadvantaged are not denied access to financial services while at the same time
prevent suspicious individuals or entities from opening an account. (a)
9.1.9. Standards of Customer Due Diligence Unless a different rule is promulgated by
the Supervisory Authority for the purpose, covered persons shall apply the
appropriate due diligence measure (normal, reduced, enhanced) depending on the
result of the ML/TF customer risk assessment:

9.1.10.1. Normal due diligence procedure Covered persons should undertake

the following measures for customers assessed to have a normal (average)
ML/TF risk based on their ML/TF customer risk rating system:
a) Conduct simplified validation procedure by:
(i) Confirming the documents submitted from a duly authenticated
official document;
(ii) Determining the authenticity of the identification documents
through validation of its issuance by requesting a certification
from the issuing authority or by any other means;
(iii) Verifying the permanent address through evaluation of utility bills,
bank or credit card statement or other documents showing
permanent address or through on-site visitation; and
(iv) Contacting the customer by phone, email or letter (thank you
letter).

28

9.1.10.2. Reduced Customer due diligence procedures - Whenever reduced

customer due diligence is applied in accordance with the covered persons
ML/TF customer risk rating system after obtaining the relevant minimum
information, the covered person may be allowed to conduct reduced CDD
measures, which should take into account the nature of the lower risk
factors. The reduced measures should be commensurate with the lower
risk factors.

9.1.10.3. Enhanced Customer due diligence procedures

a) Covered person should examine the background and purpose of all
complex, unusual large transactions, and all unusual patterns of
transactions, which have no apparent economic or lawful purpose.
Enhanced due
circumstances:

diligence

should

be

applied

under

the

following

(i) Customers classified as high-risk at the time of account opening

or subsequently thereafter in accordance with the covered
persons risk rating system; or
(ii) Existence of circumstances which warrants the filing of
suspicious transaction under this Rule.

b) Enhanced CDD measures that should be applied for higher-risk business

relationships which include, but not limited to the following:
(i)

(ii)

(iii)
(iv)

Obtaining additional information and documents on the

customer (e.g. volume of assets, information available through
public databases or internet) and updating more regularly the
identification data of customer and beneficial owner;
Obtaining additional information and documentations to
support information on the intended nature of the business
relationship, source of funds or source of wealth of the
customer (ITR, Audited Financial Statement, Loan Application,
Deed of Donation, Deed of Sale, etc.),reasons for intended or
performed transactions;
Obtaining the approval of senior management to commence or
continue the business relationship; and
Conducting enhanced monitoring of the business relationship,
by increasing the number and timing of controls applied, and
selecting patterns of transactions that need further
examination;

Where additional information cannot be obtained, or any information or

document provided is false or falsified, or result of the validation process is
unsatisfactory, or any circumstance for the filing of suspicious transaction
exists, the covered institution shall file a suspicious transaction report and
closely monitor the customer account/s and transaction/s. (n)
9.1.10.
Trustee, Nominee and Agent Accounts - When dealing with customers who
are acting as trustee, nominee, agent or in any capacity for and on behalf of another,
covered persons shall verify and record the true and full identity of the beneficial
owner. Covered persons shall also establish and record the true and full identity of
such trustees, nominees, agents and other persons and the nature of their capacity
and duties. In case a covered person has doubts as to whether such persons are
being used as dummies in circumvention of existing laws, it shall immediately make
the necessary inquiries to verify the status of the business relationship between the
parties. (Rule 9.a.13, Old Rules)

29

9.1.11.
High-risk foreign customer -A customer from a country other than the
Philippines that is recognized as having inadequate internationally accepted antimoney laundering standards, or does not sufficiently apply regulatory supervision or
the Financial Action Task Force (FATF) recommendations, or presents greater risk for
money laundering, its associated predicate offenses including corruption and
terrorism financing, such customer shall be subject to enhanced customer due
diligence measures under Rule 9.1.10.3. Information relative to these are available
from publicly available information such as the websites of FATF, FATF Style Regional
Bodies (FSRB) like the Asia Pacific Group on Money Laundering (APG) and the
Egmont Group, the Office of Foreign Assets Control (OFAC) of the U.S. Department
of the Treasury, or other reliable third parties such as regulators or exchanges, which
shall be a component of a covered persons customer identification process. (Rule
9.a.9.b, Old Rules)
9.1.12.
Politically Exposed Persons - Covered persons shall endeavor to establish
and record the true and full identity of PEPs, as well as their immediate family
members and the entities related to them. It shall establish a policy on what standard
of due diligence will apply to them, taking into consideration their position and the risk
attendant thereto.
Covered persons should take reasonable measure, based on the assessment of the
level of risk, to determine whether the customer or beneficial owner is a domestic or
international organization PEP.
A foreign PEP is a high risk customer. Covered persons are required to have
appropriate risk management system to determine whether the customer or beneficial
owner is a foreign PEP. Proactive steps must be taken, such as assessing customers
on the basis of risk criteria, risk profiles, the business model, and verification of CDD
information.
If the customer or beneficial owner is a foreign or domestic PEP or international
organization PEPs with elevated risks, enhanced due diligence procedures should be
undertaken.
The measures mentioned above shall also apply to family members or entities where
the PEP is the beneficial owner. (Rule 9.a.16, Old Rules) (a)
9.1.13. Effect on customer due diligence in case of acquisition of business
entities or product portfolios - When a covered person acquires the
business of another covered person, either in whole or as a product
portfolio, it is not necessary to re-validate the identity of all existing
customers, provided that:
a) All customer account records are acquired with the business; and
b) Customer due diligence inquiries do not raise any doubts as to whether
the anti-money laundering procedures previously adopted by the
acquired business have satisfied the customer due diligence
requirements under the AMLA, as amended.(n)
9.2.

Record Keeping: Kinds of Records and Period of Retention - All records of all
transactions of covered persons shall be maintained and safely stored for five (5) years
from the dates of transactions. Said records and files shall contain the full and true identity
of the owners or holders of the accounts involved in the covered transactions and all other
customer identification documents. Covered persons shall undertake the necessary
adequate security measures to ensure the confidentiality of such records and files. Covered
persons shall prepare and maintain documentation, in accordance with the aforementioned
client identification requirements, on their customer accounts, relationships and transactions
such that any account, relationship or transaction can be so reconstructed as to enable the
AMLC, and/or the courts to establish an audit trail for money laundering. Covered persons

30

shall likewise keep the electronic copies of all covered and suspicious transaction reports
for at least five (5) years from the dates of submission to the AMLC. (Rule 9.b.1, Old Rules)

9.3.

9.2.1.

Closed Accounts - With respect to closed accounts, the records on customer

identification, account files and business correspondence shall be preserved and
safely stored for at least five (5) years from the dates when they were closed. (Rule
9.b.3, Old Rules)

9.2.2.

Retention of Records Where a Case of Money Laundering, Civil Forfeiture or

Underlying Unlawful Activity, Has Been Filed in Court If a case for money
laundering, civil forfeiture or the underlying unlawful activity has been filed in court
based on or pertaining to any record kept by the covered person concerned, said
record must be retained and safely kept beyond the period stipulated in Sections
9.2 and 9.2.1, as the case may be, until it is confirmed that the case has been
resolved, decided or terminated with finality by the court. (Rule 9.b.4, Old Rules)

9.2.3.

Form of Records -Records shall be retained as originals in such forms as are

admissible in court pursuant to existing laws and the applicable rules promulgated
by the Supreme Court. (Rule 9.b.5, Old Rules)

Period of Reporting Covered and Suspicious Transactions- Covered persons shall

report to the AMLC all covered transactions and suspicious transactions within ten (10)
working days from the occurrence thereof. (Rule 9.c.1, Old Rules) (a)
Should a transaction be determined to be both a covered and a suspicious transaction, the
covered institution shall report the same as a suspicious transaction.
9.3.1.

Covered and Suspicious Transaction Report Forms -The Covered Transaction

Report (CTR) and the Suspicious Transaction Report (STR) shall be in the forms
prescribed by the AMLC and shall be submitted in a secured manner to the AMLC
in electronic form. (Rule 9.c.2, Old Rules)

9.3.2.

Confidentiality Provisions - When reporting covered transactions or suspicious

transactions to the AMLC, covered persons and their officers and employees, are
prohibited from communicating, directly or indirectly, in any manner or by any
means, to any person or entity, the media, the fact that a covered or suspicious
transaction has been reported or is about to be reported, the contents of the report,
or any other information in relation thereto. Neither may such reporting be
published or aired in any manner or form by the mass media, electronic mail, or
other similar devices. In case of violation thereof, the concerned officer, and
employee, of the covered person and media shall be held criminally liable. (Rule
9.c.4, Old Rules) (a)

9.3.3.

Safe Harbor Provisions - No administrative, criminal or civil proceedings shall lie

against any person for having made a CTR or STR in the regular performance of
his duties and in good faith, whether or not such reporting results in any criminal
prosecution under the AMLA, as amended, or any other Philippine law. (Rule 9.c.g,
Old Rules)

31

RULE X -OTHER PREVENTIVE MEASURES

Section 10.Prevention of Money Laundering and Other Requirements for Covered Persons.
10.1.

Additional Rules for Covered Persons Supervised and Regulated by the Bangko
Sentral ng Pilipinas.

10.1.1.

Definition of Terms -

a) Wire/Fund Transfer refers to any transaction carried out on behalf of an originator

(either natural or juridical person) through a financial institution (originating institution)
by electronic means with a view to making an amount of money available to a
beneficiary at another financial institution (beneficiary institution). The originator and
the beneficiary may be the same person. (Rule 3.i, Old Rules)
b) Cross Border transfer refers toany wire transfer where the originating and
beneficiary institutions are located in different countries. It shall also refer to any
chain of wire transfers that has at least one cross-border element. (Rule 3.i.1, Old
Rules)
c) Domestic Transfer refers to any wire transfer where the originating and
beneficiary institutions are located in the same country. It shall refer to any chain of
wire transfers that takes place entirely within the borders of a single country, even
though the system used to effect the fund/wire transfer may be located in another
country. (Rule 3.i.2, Old Rules)
d) Originating institution refers to the entity utilized by the originator to transfer
funds to the beneficiary and can either be (1) a covered person as generally defined
by the AMLA, as amended, and specifically defined by these Rules; or (2) a financial
institution or other entity operating outside the Philippines that is other than the
covered person referred to in (1) but conducts business operations and activities
similar to it. (Rule 3.i.3, Old Rules)
e) Beneficiary institution refers to the entity that will pay out the money to the
beneficiary and can either be (1) a covered person; or (2) a financial institution or
other entity operating outside the Philippines that is other than the covered person
referred to in (1) but conducts business operations and activities similar to it. (Rule
3.i.4, Old Rules)
f)

Intermediary institution refers to the entity utilized by the originating and

beneficiary institutions where both have no correspondent banking relationship with
each other but have established relationship with the intermediary institution. It can
either be (1) a covered person; or (2) a financial institution or other entity operating
outside the Philippines that is other than the covered person referred to in (1) but
conducts business operations and activities similar to it. (Rule 3.i.5, Old Rules)

10.1.2.

Numbered Accounts - Peso and foreign currency non-checking numbered

accounts shall be allowed: Provided, That the true identity of the customers of all
peso and foreign currency non-checking numbered accounts are satisfactorily
established based on official and other reliable documents and records, and that
the information and documents required under the provisions of these Rules are
obtained and recorded by the covered person. No peso and foreign currency nonchecking accounts shall be allowed without the establishment of such identity and
in the manner herein provided. Provided, further, that covered and suspicious
transaction reports involving peso and foreign currency non-checking numbered
accounts submitted to the AMLC pursuant to Section 9.3 of these Rules shall
contain the true name of the account holder. The BSP may conduct annual testing

32

for the purpose of determining the existence and true identity of the owners of such
accounts. (Rule 9.a.8, Old Rules)
10.1.3.

Trustee, Nominee, Agent or Intermediary Account - Where any transaction is

conducted by a trustee, nominee, agent or intermediary, either as an individual or
through a fiduciary relationship, a corporate vehicle or partnership, on behalf of a
trustor, principal, beneficial owner or person on whose behalf a transaction is being
conducted, covered persons shall establish and record the true and full identity and
existence of both the (a) trustee, nominee, agent or intermediary and the (b) trustor,
principal, beneficial owner or person on whose behalf the transaction is being
conducted. The covered person shall determine the true nature of the parties
capacities and duties by obtaining a copy of the written document evidencing their
relationship and apply the same standards for assessing the risk profile and
determining the standard of customer due diligence to be applied to both.
In case it entertains doubts as to whether the trustee, nominee, agent, or
intermediary is being used as a dummy in circumvention of existing laws, the
covered person shall apply enhanced customer due diligence under Section
9.1.9.2.(Rule 9.a.13, Old Rules)

10.1.4.

Correspondent Banking - Correspondent banking refers to activities of one bank

(the correspondent bank) having direct connection or friendly service relations with
another bank (the respondent bank). Because of the risk associated with dealing
with correspondent accounts where it may unknowingly facilitate the transmission, or
holding and management of proceeds of unlawful activities or funds intended to
finance terrorist activities, covered persons shall adopt policies and procedures for
correspondent banking activities and designate an officer responsible in ensuring
compliance with these policies and procedures. A covered person may rely on the
customer identification process undertaken by the respondent bank. In such case, it
shall apply the rules on Third Party reliance promulgated by the BSP, treating the
respondent bank as the Third Party as defined therein. In addition, the correspondent
bank shall:
a) Gather sufficient information about the respondent institution to understand
fully the nature of the respondents business and to determine from publicly
available information the reputation of the institution and the quality of
supervision, including whether it has been subject to money laundering or
terrorism financing investigation or regulatory action.
b) Assess the respondent institutions anti-money laundering and terrorism
financing controls.
c) Obtain approval from senior management before establishing correspondent
relationships.
d) Document the respective responsibilities of both institutions.
e) With respect to payable-through accounts, be satisfied that the respondent
bank has verified the identity of, and performed ongoing customer due
diligence on, the customers having direct access accounts of the
correspondent and that it is able to provide relevant customer identification
data upon request by the correspondent bank.
Correspondent banking customers presenting greater risk, including shell
companies, shall be subject to enhanced customer due diligence under Section
9.1.9.2. (Rule 9.a.17, Old Rules)

10.1.5.

Wire/Fund Transfers - Because of the risk associated with dealing with wire/fund
transfers, where a covered person may unknowingly transmit proceeds of unlawful
activities or funds intended to finance terrorist activities, it shall establish policies
and procedures designed to prevent it from being utilized for that purpose which
shall include, but not limited to, the following:
a)

The beneficiary institution shall not accept instructions to pay-out wire/fund

transfers to non-customer beneficiary, unless it has conducted the necessary

33

b)

c)

d)

e)

customer due diligence to establish the true and full identity and existence of
said beneficiary. Should the originator and beneficiary be the same person,
the beneficiary institution may rely on the customer due diligence conducted
by the originating institution subject to the rules on Third Party reliance
promulgated by the BSP, treating the originating institution as Third Party as
herein defined;
The originating institution shall not accept instructions to wire/fund transfer
from a non-customer originator, unless it has conducted the necessary
customer due diligence to establish the true and full identity and existence of
said originator;
In cross border wire/fund transfers, if the originator is a high risk customer as
herein described, the beneficiary institution shall conduct enhanced customer
due diligence under Section 9.1.9.2 on the beneficiary and the originator.
Where additional information cannot be obtained, or any information or
document provided is false or falsified, or result of the validation process is
unsatisfactory, the beneficiary institution shall refuse to effect the wire/fund
transfers or the pay-out of funds without prejudice to the reporting of a
suspicious transaction to the AMLC when circumstances warrant;
Whenever possible, manually initiated fund transfer (MIFT) instructions
should not be the primary delivery method. Every effort shall be made to
provide client with an electronic banking solution. However, where MIFT is
utilized, the BSP may issue pertinent rules on validation procedures;
Cross border and domestic wire/fund transfers and related message not
exceeding a threshold amount to be determined by the BSP or its equivalent
in foreign currency shall include accurate and meaningful originator and
beneficiary information. The transfer message shall contain the following
information or may be obtained thereafter. The following information shall
remain with the transfer or related message through the payment chain:
(i)
(ii)
(iii)

the name of the originator;

the name of the beneficiary; and
an account number of the originator and beneficiary, or in its absence,
a unique transaction reference number.

For cross border and domestic wire/fund transfers and related message
amounting to said threshold amount to be determined by the BSP or more or
its equivalent in foreign currency, The following information accompanying all
qualifying wire transfers shall contain the following or obtained thereafter:
(i)
(ii)
(iii)
(iv)
(v)

f)

the name of the originator;

the originator account number where such an account is used to
process the transaction;
the originators address, or national identity number, or customer
identification number, or date and place of birth;
the name of the beneficiary; and
the beneficiary account number where such an account is used to
process the transaction.

Should any wire/fund transfer amounting to the threshold amount to be

determined by the BSP or more or its equivalent in foreign currency be
unaccompanied by the required originator and beneficiary information, the
beneficiary institution shall exert all efforts to establish the true and full identity
and existence of the originator by requiring additional information from the
originating institution or intermediary institution. It shall likewise apply enhanced
customer due diligence under Section 9.1.10.3 to establish the true and full
identity and existence of the beneficiary. Where additional information cannot be
obtained, or any information or document provided is false or falsified, or result of
the validation process is unsatisfactory, the beneficiary institution shall refuse to
effect the wire/fund transfer or the pay-out of funds without prejudice to the

34

reporting of a suspicious transaction to the AMLC when circumstances warrant.

(Rule 9.a.18, Old Rules)
10.1.6.

10.2.

Exemption from Bank Secrecy Laws When reporting covered or suspicious

transactions to the AMLC, covered persons and their officers and employees, 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. (Rule 9.c.3, Old Rules)(a)

Additional Rules for Covered Persons Supervised and Regulated by the Insurance
Commission (IC).

10.2.1 Customer Identification a) Prohibition against selling of insurance products without face-to-face Contact.
Unless the Insurance Commission issues a different rule, no insurance product shall
be sold by any IC-covered institution without face-to-face contact with its client except
under the following circumstances:
(i)
life insurance policies where the premium is low (e.g. an annual premium not
exceeding Php50,000.00, or single premium not over Php125,000.00);
(ii) insurance policies for pension schemes if there is no early surrender option and
the policy cannot be used as collateral;
(iii) a pension, superannuation or similar scheme that provides retirement benefits
to employees, where contributions are made by way of deduction from wages,
and the scheme rules do not permit the assignment of a members interest
under the scheme; and
(iv) other circumstances as may be determined by the AMLC upon the
recommendation of the IC.
b) For members under group policies, salary allotment and/or worksite marketing
business, the insurer is required to conduct customer identification on the employer of
said members.
10.3.

Additional Rules for Covered Persons Supervised and Regulated by the Securities
and Exchange Commission (SEC).
Customer Accounts The true identity of the customers shall always be
established based on official and other reliable documents and records. Covered
persons are required to obtain and record such information and documents
required under the provisions of these Rules and the Securities Regulations Code
and its implementing Rules and Regulations, as amended. Covered and Suspicious
transaction reports that are submitted to the AMLC pursuant to Section 9.3 of these
Rules shall always contain beneficial owner. The SEC may conduct regular audit
and testing for the purpose of ensuring that the true identity of the customer is
properly recorded.

10.3.1.

10.4.

Additional Rules for Jewelry Dealers in Precious Metals (JDPMs) and Jewelry
Dealers in Precious Stones (JDPSs).

10.4.1.

Definition of Terms -

a) Jewelry refers to finished goods deriving fifty percent (50%) or more of their
value from jewels, precious metals or precious stones constituting, forming part of
or attached to said finished goods.
b) Precious Metal includes gold, silver, platinum, palladium, rhodium, ruthenium,
iridium and osmium at a level of purity of five hundred (500) parts per one
thousand (1,000), singly or in any combination, and alloys of precious metals,
solders, and plating chemicals such as rhodium and palladium plating solutions,
potassium gold cyanide containing at least sixty-eight and three tenths percent

35

c)

d)
e)
f)

g)

h)

(68.3%) gold, potassium silver cyanide containing at least sixty-eight percent

(68%) silver and silver cyanide in salt solution containing at least fifty-four percent
(54%) silver.
Precious Stone includes gemstones, jewels and those substances that have
market-recognized gem level of quality, beauty, and rarity such as diamond,
corundum (including rubies and sapphires), beryl (including emeralds and
aquamarines), chrysoberyl, spinel, topaz, zircon, tourmaline, garnet, crystalline
and cryptocrystalline quartz, olivine peridot, tanzanite, jadeite jade, nephrite jade,
spodumene, feldspar, turquoise, lapis lazuli and opal and all other gems and
stones used in jewelry making.
Jewel includes organic substances that have a market-recognized gem level of
quality, beauty and rarity such as pearl, amber and coral.
Finished good includes fine jewelry, numismatic items, accessories and
antiques
Fine jewelry includes (a) articles of personal adornment made of precious
metals, precious stones, pearls or combinations thereof including rings, bracelets,
necklaces, brooches, earrings, watch-chains, fobs, pendants, tie pins, cuff links,
combs, tiaras, dress-studs, religious medals or other medals or insignia; and (b)
articles made of precious metals with or without precious stones such as cigarette
cases, powder boxes, chain purses and cachou boxes, and such other articles of
similar nature.
Dealer an individual or entity who buys and/or sells precious metals, precious
stones and/or jewelry in the course of its business activities. The purchases or
sales of precious metals, precious stones and/or jewelry as referred to herein
exclude those carried out for, connected with, or for the purpose of extracting
precious metals or precious stones from a mine, or cutting or polishing precious
stones.
Doing business means performance by natural and juridical persons of trade
in precious metals, precious stones and finished goods. It shall include sale,
purchase, soliciting orders, service contracts, opening offices, whether called
liaison offices or branches; and any other act or acts that imply a continuity of
commercial dealings or arrangements, and contemplate to that extent the
performance of acts or works, or the exercise of some of the functions normally
incident to, and in progressive prosecution of, commercial gain or of the purpose
and object of the business organization.

10.4.2.

Unusual or suspicious patterns of account activity requiring enhanced

customer due diligence. In addition to the circumstances enumerated under
Section 9.1.10.3, JDPMs and JDPSs shall also apply enhanced customer due
diligence involving suspicious transactions enumerated under Section 10.4.4.

10.4.3.

Covered Transactions for JDPMs and JDPSs For JDPMs and JDPSs as
herein defined, covered transaction shall refer to a transaction in cash or other
equivalent monetary instrument involving an amount in excess of One Million Pesos
(Php1,000,000.00).

10.4.4.

Suspicious Transactions for JDPMs and JDPSs Suspicious transactions

for JDPMs and JDPSs shall refer to transactions with JDPMs and JDPSs,
regardless of amounts involved, wherein the circumstances under Sec. 3b-1 of the
AMLA, as amended, are present including those that are analogous to said
circumstances such as but not limited to the following:
In retail a)
b)
c)
d)

Transacting with unusual payment methods;

Unusual buying behavior or pattern;
High value transactions in cash; or
Transactions where the customer requests over/under-invoicing of
purchases.

36

In wholesale
a)
b)
c)
d)

Unknown business background of the buyer;

Transactions conducted by a third party;
Transactions conducted by a shell company/offshore company;
Customer has apparent lack of reasonable expertise/experience in the
precious metals and/or precious stones sector;
e) Transactions where the customer requests over/under-invoicing of
purchases;
f) Unusual payment methods;
g) Customer refuses to use other means of payment other than cash or
uses foreign currency/currencies without apparent reason; or
h) Unusual business pattern.
10.5.

Additional Rules for Company Service Providers (CSPs).

10.5.1.

Definition of Terms -

a) Company Service Providers - refer to those who, as a business, provide any of

the following services to third parties:
(i)
(ii)
(iii)

(iv)

Acting as a formation agent of juridical persons;

Acting as (or arranging for another person to act as) a director or corporate
secretary of a company, a partner of a partnership, or a similar position in
relation to other juridical persons;
Providing a registered office, business address or accommodation,
correspondence or administrative address for a company, a partnership or any
other legal person or arrangement. The service referred to herein shall not be
construed to include the business of leasing and/or subleasing of specific
spaces or retail trade; and
Acting as (or arranging for another person to act as) a nominee shareholder for
another person.

b) Formation Agent refers to a person or entity who, as a business, provides

company incorporation services in the Philippines for foreign and domestic clients.
c)

Nominee Shareholder refers to the registered owner of share(s) held on behalf

of the actual owner under a custodial agreement.

10.5.2.

Suspicious Transactions for CSPs. Suspicious transactions for CSPs shall

refer to transactions with CSPs, regardless of amounts involved, wherein the
circumstances under Sec. 3.14 of these Rules, as amended, are present including
those that are analogous to said circumstances such as but not limited to the
following:
a) the establishment of the corporate entity has no obvious commercial
purpose;
b) the client appears to be uninterested in legitimate tax avoidance schemes;
c) the client makes unusually large cash payments in relation to business
activities which would normally be paid through other payment facilities;
d) excessive or unnecessary use of nominees;
e) unnecessary granting of wide ranging Powers of Attorneys;
f) the client delays or refuses to disclose the identity of the ultimate beneficial
owners of the company;
g) the established corporate entity continually make substantial losses;
h) multi-jurisdictional corporate entities and/or corporate entities of complex
structure are established without valid grounds;
i) frequent turnovers in shareholders, directors or trustees;
j) payments are made or received without a clear connection to the actual
activities of the corporate entity;

37

k) use of off-shore bank accounts without legitimate economic necessity;

l) the corporate entity is established primarily for the purpose of collecting funds
from various sources which are then transferred to local or foreign bank
accounts that have no apparent ties with the company;
m) the incorporation of the corporate entity is by a non-resident with no links or
activities in the jurisdiction where the company is established;
n) the money flow generated by the corporate entity is not in line with its
underlying business activities; and
o) frequent, successive, simultaneous or multiple incorporators with one or more
common nominees as incorporators, common addresses and other similar
circumstances.
10.5.3.

10.6.

Supervision. For purposes of determining AML/CFT compliance, CSPs shall

be under the supervision of the SEC. Where the supervision of the SEC is limited
only to the registration of the CSPs, the AMLC shall act as the SA for AML/CFT
purposes and it may enlist the assistance of or deputize other government agencies
having regulatory power and/or licensing authority over said covered person for the
implementation and enforcement of the AMLA, as amended, and these Rules. (a)

Additional Rules for Covered Persons Under Section 3(a)(7) of the AMLA
(Designated Professionals)

10.6.1. Definition of Term/s a) Designated Professional shall refer to any person who prepares for or carries
out transactions relating to the services under Section 10.6.2. Lawyers and
accountants acting as independent legal professionals are excluded in relation to
information concerning their clients or where disclosure of information would
compromise client confidences or the attorney-client relationship: Provided, That
these lawyers and accountants are authorized to practice in the Philippines and shall
continue to be subject to the provisions of their respective codes of conduct and/or
professional responsibility or any of its amendments.
10.6.2. Applicability - The provisions under this Rule shall apply to persons who provide
any of the following services:
a) Managing clients money, securities or other assets;
b) Management of bank, savings or securities accounts;
c) Organization of contributions for the creation, operation or management of
companies; and
d) Creation, operation or management of juridical persons or arrangements, and
buying and selling business entities.
10.6.3. Necessary Services - The rendition of any of the services mentioned under
Section 10.6.2 shall necessarily include the following activities performed in behalf
of a client, such as but not limited to:
a)
b)
c)
d)
e)
f)
g)
h)
i)
j)

receiving or paying funds and/or capital contributions;

receiving or transferring, locally or internationally, funds, securities and assets;
buying and selling of business entities, including mergers and consolidation;
deposits or withdrawals on clients accounts;
issuing and cashing of checks and other negotiable instruments;
sale, transfer or disposition of stocks;
administration of estates;
providing tax services;
providing insolvency, winding up or dissolution services;
creation, operation and management of trusts, companies, foundations,
corporations and other juridical persons or arrangements;
k) preparing powers of attorney and other contracts involving transactions of clients
accounts and assets;

38

l)

preparation of all documentary requirements for the incorporation and operation

of juridical person;
m) facilitating the registration of the juridical person with concerned government
agencies; and
n) such other activities that are necessary to carry out the services mentioned under
Section 10.6.2. hereof.
10.6.4. Covered Transactions - Designated professionals shall file CTR when the amount
or value involved in the transactions they prepare for or carry out in relation to the
services mentioned in Section 10.6.2 and 3 exceeds Five Hundred Thousand
Pesos (Php500,000.00).
10.6.5. Suspicious Transactions - Suspicious transactions for designated professionals
shall refer to transactions with designated professionals, regardless of the amounts
involved, wherein the circumstances under Sec. 3b-1 of the AMLA are present
including those that are analogous to said circumstances such as but not limited to
the following:
a) Client appears to be living beyond his or her means;
b) Client has checks inconsistent with sales such as unusual payments from
unlikely sources;
c) Client has history of changing book-keepers or accountants yearly;
d) Client is uncertain about location of companys records;
e) Company carries non-existent or satisfied debt that is continually shown as
current on financial statements;
f) Company has no employees, which is unusual for the type of business;
g) Company is paying unusual consultant fees to offshore companies;
h) Companys records consistently reflect sales at less than cost, thus putting the
company into a loss position, but the company continues without reasonable
explanation of the continued loss;
i) Company shareholder loans are not consistent with business activity;
j) Examination of source documents shows misstatements of business activity
that cannot be readily traced through the companys books;
k) Company makes large payments to subsidiaries or similarly controlled
companies that are not within the normal course of business;
l) Company acquires large personal and consumer assets when this type of
transaction is inconsistent with the ordinary business practice of the client or
the practice of that particular industry;
m) Company invoiced by organizations located in a country that does not have
adequate anti-money laundering laws and is known as a highly secretive
banking and corporate tax haven;
n) Client has business activity inconsistent with industry averages of financial
ratios;
o) When the transaction is complex or unusual in the ordinary course of the
clients business; and
p) Such other indicators analogous or related to the foregoing.

RULE XI
Authority to File Petitions for FREEZE ORDER
Section 11.Authority to File Petition for Freeze Order.
11.1.

Freezing of any monetary instrument or property.

1. Upon verified ex parte petition by the AMLC and after determination that probable
cause exists that any monetary instrument or property is in any way related to any
unlawful activity as defined in Section 3.14 hereof or to a money laundering offense,
the Court of Appeals may issue a freeze order on said monetary instrument or
property which shall be effective immediately.

39

2. The Rule of Procedure in Cases of Civil Forfeiture, Asset Preservation, and Freezing
of Monetary Instrument, Property, or Proceeds representing, Involving, or Relating to
an Unlawful Activity or Money Laundering Offense under Republic Act No. 9160, as
amended (A.M. No. 05-11-04-SC) shall govern the proceedings in all petitions for
freeze order instituted pursuant to R.A. No. 9160, as amended.
3. Considering the intricate and diverse web of related and interlocking accounts
pertaining to the monetary instruments or properties that any person may create in
the different covered persons, their branches and/or other units, the AMLC may file a
petition with the Court of Appeals for the freezing of the monetary instruments or
properties in the names of the reported owners/holders and monetary instruments or
properties named in the Petition of the AMLC including related accounts as defined
under Section 3.11 of these Rules.
4. The Court shall act on the petition to freeze within twenty-four (24) hours from filing of
the petition. If the petition is filed a day before a non-working day, the computation of
the twenty-four (24) hour period shall exclude the non-working days.
5. The freeze order shall not exceed six (6) months depending upon the circumstances
of the case: Provided, that if there is no case filed against a person whose account
has been frozen within the period determined by the court, the freeze order shall be
deemed ipso facto lifted.
6. A person whose account has been frozen may file a motion to lift the freeze order and
the court must resolve this motion before the expiration of the freeze order.
7. No court shall issue a temporary restraining order or a writ of injunction against any
freeze order, except the Supreme Court.
11.2.

No prior charge, pendency or conviction necessary. No prior criminal charge,

pendency of or conviction for an unlawful activity or money laundering offense is
necessary for the commencement or the resolution of an application for freeze order. (n)

11.3.

Extension of the Freeze Order If the freeze order issued by the Court of Appeals
is less than six (6) months, before the period of said freeze order expires, the AMLC may
file a motion with the same court for an extension of said period: Provided, however, That
the extension sought shall not extend the period of the freeze beyond six (6) months.
Upon the timely filing of such motion and pending resolution thereof by the Court of
Appeals to extend the period, said period shall be deemed suspended and the freeze
order shall remain effective. Furthermore, the effect of the freeze order shall also remain
until the court, where a case for civil forfeiture is pending, issues a Provisional Asset
Preservation Order (PAPO).

11.4.

Definition of Probable Cause - Probable cause includes such facts and

circumstances which would lead a reasonably discreet, prudent or cautious man to
believe that an unlawful activity and/or a money laundering offense is about to be, is
being or has been committed and that the account or any monetary instrument or
property sought to be frozen and/or inquired into is in any way related to said unlawful
activity and/or money laundering offense.

11.5.

Duty of Covered Persons and/or concerned Government Agencies

1. Upon receipt of the notice of the freeze order, the covered person concerned shall
immediately freeze the monetary instrument or property and related accounts subject
thereof and shall also immediately desist from and not allow any transaction,
withdrawal, deposit, transfer, removal, conversion, other movement or concealment of
the account representing, involving or relating to the subject monetary instrument,
property, proceeds or its related accounts. (n)
2. The covered person shall likewise immediately furnish a copy of the notice of the
freeze order upon the owner or holder of the monetary instrument or property or
related accounts subject thereof.
3. Within twenty-four (24) hours from receipt of the freeze order, the covered person
concerned shall submit to the Court of Appeals and the AMLC, by personal delivery or
other modes of delivery acceptable to the court, a detailed written return on the freeze

40

order, specifying all the pertinent and relevant information, which shall include the
following:
a) For covered persons: The account numbers and/or description of the monetary
instrument, property, or proceeds involved;
b) For concerned government agencies:
(i)

Certificates of title numbers of registered real property and the volumes and
pages of the registration books of the Register of Deeds where the same
are registered;
(ii) Registration in the Primary Entry Book and corresponding Registration
Book in the Register of Deeds for unregistered real property;
(iii) Registration with the Register of Deeds of the enabling or master deed for
a condominium project, declaration of restrictions relating to such
condominium project, certificate of title conveying a condominium and
notice of assessment upon any condominium;
(iv) Tax declarations for improvements built on land owned by a different party,
together with the annotation of the contract of lease on the title of the owner
of the land as registered in the Register of Deeds;
(v) Certificates of registration for motor vehicles and heavy equipment
indicating the engine numbers, chassis numbers and plate numbers;
(vi) Certificates of numbers for seacraft;
(vii) Registration certificates for aircraft; or
(viii) Commercial invoices or notarial identification for personal property capable
of manual delivery;
whichever are applicable:
c) The names of the account holders, personal property owners or possessors, or
real property owners or occupants;
d) The value of the monetary instrument, property, or proceeds as of the time the
assets were ordered frozen;
e) All relevant information as to the nature of the monetary instrument, property, or
proceeds; and
f)

The date and time when the freeze order was served.

4. The covered persons shall also submit a detailed return to the AMLC, in a format to
be prescribed by the latter, in a secured electronic form either via leased line or
internet facilities. (n)
5. The covered person shall not lift the effects of the freeze order without securing
official confirmation from the AMLC.
6. Upon receipt of the freeze order issued by the Court of Appeals and upon verification
by the covered person that the related accounts originated from and/or are materially
linked to the monetary instrument or property subject of the freeze order, the covered
person shall freeze these related accounts wherever these may be found.
The written return to be filed by the covered person as required under Section 11.4(3)
hereof shall include the fact of such freezing and an explanation as to the grounds for the
identification of the related accounts.
If the related accounts cannot be determined within twenty-four (24) hours from receipt of
the freeze order due to the volume and/or complexity of the transactions or any other
justifiable factor(s), the covered person shall effect the freezing of the related accounts,

41

monetary instruments and properties within a reasonable period and shall submit a
supplemental return thereof to the Court of Appeals and the AMLC within twenty-four (24)
hours from the freezing of said related accounts, monetary instruments and properties.
11.6.

Prohibition against Issuance of Freeze Orders against candidates for an

electoral office during election period No assets shall be frozen to the prejudice of a
candidate for an electoral office during an election period.

RULE XII - INQUIRY INTO DEPOSITS OR INVESTMENTS

Section 12. Authority to Inquire into or examine Deposits or Investments.
12.1. Authority to Inquire into or examine Deposits or Investments with Court Order Notwithstanding the provisions of Republic Act No. 1405, as amended; Republic Act No.
6426, as amended; Republic Act No. 8791, and other laws, the AMLC may inquire into or
examine any particular deposit or investment, including related accounts, with any
banking institution or non-bank financial institution and their subsidiaries and affiliates
upon order by the Court of Appeals based on an ex parte application in cases of violation
of the AMLA, as amended, when it has been established that there is probable cause that
the deposits or investments involved, including related accounts, are in any way related to
an unlawful activity as defined in Section 3.14 hereof or a money laundering offense
under Section 4 hereof; except in cases as provided under Section 12.2.
a) The Court of Appeals shall act on the application to inquire into or examine any
deposit or investment with any banking institution or non-bank financial institution
within twenty-four (24) hours from filing of the application.
b) A court order ex parte must be obtained before the AMLC can inquire into the related
accounts; provided, that the procedure for the ex parte application for an order of
inquiry into the principal account shall be the same for that of the related accounts.
c) The authority to inquire into or examine the main account and the related accounts
shall comply with the requirements of Article III, Sections 2 and 3 of the 1987
Constitution, which are hereby incorporated by reference.
12.2. Duty of the banking institution or non-bank financial institution upon receipt of the
Court Order allowing a Bank Inquiry The banking institution or the non-bank financial
institution and their subsidiaries and affiliates shall immediately, upon receipt of the Court
Order and AMLC Secretariats request for documents do the following:
a) allow the AMLC and/or its Secretariats duly authorized personnel full access to all
records pertaining to the deposit or investment account; and
b) submit to the AMLC Secretariat, within ten (10) days from receipt of the letter request,
certified true copies of the documents subject of the request.
Any officer, employee, stockholder, owner, representative, agent, manager, director or
officer-in-charge of any banking institution or non-bank financial institution and their
subsidiaries and affiliates who purposely fails or willfully refuses to permit the AMLC
and/or its Secretariats duly authorized personnel to conduct an inquiry into or
examination of any deposit or investment shall be imposed a fine of not more than Five
Hundred Thousand Philippine Pesos (PHP500,000.00). (n)
12.3. Authority to Inquire into or examine Bank Deposits without court order The AMLC
may inquire into or examine any deposit or investment with any banking institution or nonbank financial institution and their subsidiaries and affiliates without a court order in cases
involving any of the following unlawful activities:
a) Kidnapping for ransom under Article 267 of Act No. 3815, otherwise known as the
Revised Penal Code, as amended;

42

b) Sections 4, 5, 6, 8, 9, 10, 11, 12, 13, 14, 15 and 16 of Republic Act No. 9165,
otherwise known as the Comprehensive Dangerous Drugs Act of 2002;
c) Hijacking and other violations under Republic Act No. 6235; destructive arson and
murder, as defined under the Revised Penal Code, as amended; and
d) Felonies or offenses of a nature similar to those mentioned in Section 3(i) (1), (2)
and (12) of the AMLA, as amended, which are punishable under the penal laws of
other countries;
e) Terrorism and conspiracy to commit terrorism as defined and penalized under
Republic Act No. 9372; and
f) Financing of terrorism as defined and penalized under Republic Act No. 10168.
12.4. Procedure for inquiry or examination without a court order - Where any of the
unlawful activities enumerated under Section 12.2 is involved, and there is probable
cause that the deposits or investments with any banking institution or non-bank financial
institution and their subsidiaries and affiliates are in any way related to any of these
unlawful activities, the AMLC shall issue a resolution authorizing the inquiry into or
examination of any deposit or investment with such banking institution or non-bank
financial institution and their subsidiaries and affiliates concerned.
12.5. Duty of the banking institution or non-bank financial institution upon receipt of the
AMLC resolution- The banking institution or the non-bank financial institution and their
subsidiaries and affiliates shall immediately, upon receipt of the AMLC resolution, allow
the AMLC and/or its Secretariats duly authorized personnel full access to all records
pertaining to the deposit or investment account and to submit to the AMLC Secretariat,
within ten (10) days from receipt of the letter request, certified true copies of the
documents subject of the request.
Any officer, employee, stockholder, owner, representative, agent, manager, director or
officer-in-charge of any banking institution or non-bank financial institution and their
subsidiaries and affiliates who purposely fails or willfully refuses to permit the AMLC
and/or its Secretariats duly authorized personnel to conduct an inquiry into or
examination of any deposit or investment shall be imposed a fine of not more than Five
Hundred Thousand Philippine Pesos (PHP500,000.00).
12.6. No prior charge, pendency or conviction necessary. No prior criminal charge,
pendency of or conviction for an unlawful activity or money laundering offense is
necessary for the commencement or the resolution of an application for bank inquiry. (n)
12.7. Authority of the BSP to check compliance with the AMLA, as amended, and these
Rules - To ensure compliance with the requirements of the AMLA, as amended, and
these Rules, the BSP may, in the course of a periodic or special examination, check the
compliance of a covered person through generally accepted examination techniques
which may include account transaction sampling and use of electronic audit software in
accordance with BSP Examination Procedures for AML/CFT Activities. For this purpose,
it may undertake the following activities:
1. Review any customer identification and account opening documents and records
of existing accounts, including but not limited to deposits, investments, loans,
treasury, custodianship, trust and fiduciary accounts, to determine compliance
with the requisite:
a) conduct of face-to-face contact except as provided for under items (a) to
(d) of Section 9.1.1. of these Rules;
b) completeness and accuracy of the minimum information and documents
required to be obtained under these Rules; and
c) records-retention period, as well as compliance with all other regulations
issued by the AMLC and the BSP to assess that the covered person has
properly established and verified the true and full identity of its
customers.
2. Require a covered person to provide BSP examiners copies of all covered and
suspicious transaction reports filed by the covered person with the AMLC in order

43

to determine accurate and complete reporting of said transactions to the AMLC

pursuant to the AMLA, as amended, these Rules and BSP issuances.
3. Review supporting transaction records and documents, such as but not limited to,
deposit and/or withdrawal slips, debit/credit memos, including the electronic or
manual AML/CFT system, for purposes of ascertaining that all covered and
suspicious transactions were captured and reported to the AMLC, within the
period allowed by the AMLA, as amended, and these Rules, and to determine
proper maintenance and retention of transaction documents and records.
4. Review all documents and records related to closed accounts, peso and foreign
currency non-checking numbered accounts, high-risk accounts, suspicious
transactions reported to the AMLC and accounts which are the subject of a
money laundering case, to ensure that a covered person is properly monitoring
these types of accounts/transactions and is complying with records-retention
requirements under the AMLA, as amended, these Rules and/or BSP AML/CFT
regulations.
12.8. BSP Examination Procedures for AML/CFT Activities and Risk Rating System - To
ensure compliance with the AMLA, as amended, and these Rules, the BSP shall
promulgate its examination procedures for AML/CFT activities and adopt a risk rating
system that will assess a covered person and its subsidiaries and affiliates overall
AML/CFT risk management system.
Any findings of the BSP which may constitute a violation of any provision of the AMLA, as
amended, and these Rules shall be referred to the AMLC for its appropriate action without
prejudice to the BSP taking appropriate action against a non-complying covered person
and its responsible personnel.

RULE XIII - INQUIRY INTO ACCOUNTS OR TRANSACTIONS

Section 13.Authority to inquire into accounts or transactions. The AMLC may inquire into or
examine any other type of account or transaction other than deposits or investments as defined
under Republic Act No. 1405, as amended, Republic Act. No. 8791, and Republic Act No. 6426,
without a court order, with any covered person when it has been established that there is probable
cause that the transaction or account involved, including related accounts, are in any way related to
an unlawful activity as defined in Section 3.14 hereof or a money laundering offense under Section 4
hereof.(n)
13.1.

Duty of the covered persons upon receipt of the AMLC Resolution- The covered
person and their subsidiaries and affiliates shall, immediately upon receipt of the
AMLC resolution, allow the AMLC and/or its Secretariats duly authorized personnel
full access to all records pertaining to the account or transaction.
Any officer, employee, stockholder, owner, representative, agent, manager, director or
officer-in-charge of any covered person who purposely fails or willfully refuses to
permit the AMLC or its Secretariats duly authorized personnel to conduct an inquiry
into or examination of any account or transaction shall be imposed a fine of not more
than Five Hundred Thousand Philippine Pesos (PHP500,000.00). (n)

RULE XIV - CIVIL FORFEITURE

Section 14.Authority to Institute Civil Forfeiture Proceedings. The AMLC is authorized under
Section 7 (3) of the AMLA, as amended, to institute civil forfeiture proceedings and all other remedial
proceedings through the Office of the Solicitor General.
14.1. Applicable Rule - The Rule of Procedure in Cases of Civil Forfeiture, Asset Preservation,
and Freezing of Monetary Instrument, Property, or Proceeds Representing, Involving, or
Relating to an Unlawful Activity or Money Laundering Offense under Republic Act No.
9160, as Amended (A.M. No. 05-11-04-SC) shall govern all civil forfeiture proceedings
instituted pursuant to the AMLA, as amended.

44

14.2. Civil Forfeiture Upon determination by the AMLC that probable cause exists that any
monetary instrument or property is in any way related to an unlawful activity as defined in
Section 3(i) or a money laundering offense under Section 4 of the AMLA, as amended,
the AMLC shall file with the appropriate court through the Office of the Solicitor General, a
verified petition for civil forfeiture. (n)
14.2.1. Forfeiture of assets of equal value - The forfeiture shall include those other
monetary instrument or property having a value equivalent to that of the monetary
instrument or property found to be related in any way to an unlawful activity or a
money laundering offense, when with due diligence, the former cannot be located,
or it has been substantially altered, destroyed, diminished in value or otherwise
rendered worthless by any act or omission, or it has been concealed, removed,
converted, or otherwise transferred, or it is located outside the Philippines or has
been placed or brought outside the jurisdiction of the court, or it has been
commingled with other monetary instrument or property belonging to either the
offender himself or a third person or entity, thereby rendering the same difficult to
identify or be segregated for purpose of forfeiture.(n)
14.3. No prior charge, pendency or conviction necessary. No prior criminal charge,
pendency of or conviction for an unlawful activity or money laundering offense is
necessary for the commencement or the resolution of a petition for civil forfeiture. (n)
14.4. Claim on Forfeited Assets. Where the court has issued an order of forfeiture of the
monetary instrument or property in a criminal prosecution for any money laundering
offense defined under Section 4 of the AMLA, as amended, the offender or any other
person claiming an interest therein may apply, by verified petition, for a declaration that
the same legitimately belongs to him and for segregation or exclusion of the monetary
instrument or property corresponding thereto. The verified petition shall be filed with the
court which rendered the judgment of forfeiture, within fifteen (15) days from the date of
the finality of theorder of forfeiture, in default of which the said order shall become final
and executory. This provision shall apply in both civil and criminal forfeiture.(n)
14.5. Payment in lieu of Forfeiture -Where the court has issued an order of forfeiture of the
monetary instrument or property subject of a money laundering offense defined under
Section 4 of the AMLA, as amended, and said order cannot be enforced because any
particular monetary instrument or property cannot, with due diligence, be located, or it has
been substantially altered, destroyed, diminished in value or otherwise rendered
worthless by any act or omission, directly or indirectly, attributable to the offender, or it
has been concealed, removed, converted, or otherwise transferred to prevent the same
from being found or to avoid forfeiture thereof, or it is located outside the Philippines or
has been placed or brought outside the jurisdiction of the court, or it has been
commingled with other monetary instruments or property belonging to either the offender
himself or a third person or entity, thereby rendering the same difficult to identify or be
segregated for purposes of forfeiture, the court may, instead of enforcing the order of
forfeiture of the monetary instrument or property or part thereof or interest therein,
accordingly order the convicted offender to pay an amount equal to the value of said
monetary instrument or property. This provision shall apply in both civil and criminal
forfeiture. (n)

RULE XV - MUTUAL ASSISTANCE

Section 15.Mutual Assistance among States.
15.1. Request for Assistance from a Foreign State - Where a foreign State makes a request
for assistance in the investigation or prosecution of a money laundering offense, the
AMLC may execute the request or refuse to execute the same and inform the foreign
State of any valid reason for not executing the request or for delaying the execution
thereof. The principles of mutuality and reciprocity shall, for this purpose, be at all times
recognized.

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15.2. Powers of the AMLC to Act on a Request for Assistance from a Foreign State - The
AMLC may execute a request for assistance from a foreign State by: (1) tracking down,
freezing, restraining and seizing assets alleged to be proceeds of any unlawful activity
under the procedures laid down in the AMLA, as amended, and in these Rules; (2) giving
information needed by the foreign State within the procedures laid down in the AMLA, as
amended, and in these Rules; and (3) applying for an order of forfeiture of any monetary
instrument or property with the court: Provided, That the court shall not issue such an
order unless the application is accompanied by an authenticated copy of the order of a
court in the requesting State ordering the forfeiture of said monetary instrument or
property of a person who has been convicted of a money laundering offense or an
unlawful activity in the requesting State, and a certification or an affidavit of a competent
officer of the requesting State stating that the conviction and the order of forfeiture are
final and that no further appeal lies in respect of either.
15.3. Obtaining Assistance from Foreign States - The AMLC may make a request to any
foreign State for assistance in (1) tracking down, freezing, restraining and seizing assets
alleged to be proceeds of any unlawful activity; (2) obtaining pertinent information and
documents that it needs relating to any money laundering offense or any other matter
directly or indirectly related thereto; (3) to the extent allowed by the law of the foreign
State, applying with the proper court therein for an order to enter any premises belonging
to or in the possession or control of, any or all of the persons named in said request,
and/or search any or all such persons named therein and/or remove any document,
material or object named in said request: Provided, That the documents accompanying
the request in support of the application have been duly authenticated in accordance with
the applicable law or regulation of the foreign State; and (4) applying for an order of
forfeiture of any monetary instrument or property in the proper court in the foreign State:
Provided, That the request is accompanied by an authenticated copy of the order of the
Regional Trial Court ordering the forfeiture of said monetary instrument or property and an
affidavit of the clerk of court stating that the order of forfeiture is final and that no further
appeal lies in respect of it.
15.4. Limitations on Requests for Mutual Assistance - The AMLC may refuse to comply with
any request for assistance where the action sought by the request contravenes any
provision of the Constitution or the execution of a request is likely to prejudice the national
interest of the Philippines, unless there is a treaty between the Philippines and the
requesting State relating to the provision of assistance in relation to money laundering
offenses.
15.5. Requirements for Requests for Mutual Assistance from Foreign States - A request
for mutual assistance from a foreign State must (1) confirm that an investigation or
prosecution is being conducted in respect of a money launderer named therein or that he
has been convicted of any money laundering offense; (2) state the grounds on which any
person is being investigated or prosecuted for money laundering or the details of his
conviction; (3) give sufficient particulars as to the identity of said person; (4) give
particulars sufficient to identify any covered person believed to have any information,
document, material or object which may be of assistance to the investigation or
prosecution; (5) ask from the covered person concerned any information, document,
material or object which may be of assistance to the investigation or prosecution; (6)
specify the manner in which and to whom said information, document, material or object
obtained pursuant to said request, is to be produced; (7) give all the particulars necessary
for the issuance by the court in the requested State of the writs, orders or processes
needed by the requesting State; and (8) contain such other information as may assist in
the execution of the request.
15.6. Authentication of Documents - For purposes of Sections 7 and 13 (f) of the AMLA, as
amended, a document is authenticated if the same is signed or certified by a judge,
magistrate or equivalent officer in or of, the requesting State, and authenticated by the
oath or affirmation of a witness or sealed with an official or public seal of a minister,
secretary of state, or officer in or of, the government of the requesting State, or of the
person administering the government or a department of the requesting territory,
protectorate or colony. The certificate of authentication may also be made by a secretary

46

of the embassy or legation, consul general, consul, vice consul, consular agent or any
officer in the foreign service of the Philippines stationed in the foreign State in which the
record is kept, and authenticated by the seal of his office.
15.7. Suppletory Application of the Revised Rules of Court - For attachment of Philippine
properties in the name of persons convicted of any unlawful activity as defined in Section
3 (i) of the AMLA, as amended, execution and satisfaction of final judgments of forfeiture,
application for examination of witnesses, procuring search warrants, production of bank
documents and other materials and all other actions not specified in the AMLA, as
amended, and these Rules, and assistance for any of the aforementioned actions, which
is subject of a request by a foreign State, resort may be had to the proceedings pertinent
thereto under the Revised Rules of Court.
15.8. Authority to Assist the United Nations and other International Organizations and
Foreign States The AMLC is authorized under Sections 7 (8) and 13 (b) and (d) of the
AMLA, as amended, to receive and take action in respect of any request of foreign States
for assistance in their own anti-money laundering operations. It is also authorized under
Section 7 (7) of the AMLA, as amended, to cooperate with the National Government
and/or take appropriate action in respect of conventions, resolutions and other directives
of the United Nations (UN), the UN Security Council, and other international organizations
of which the Philippines is a member. However, the AMLC may refuse to comply with any
such request, convention, resolution or directive where the action sought therein
contravenes the provision of the Constitution or the execution thereof is likely to prejudice
the national interest of the Philippines.
15.9. Extradition The Philippines shall negotiate for the inclusion of money laundering
offenses as defined under Section 4 of the AMLA, as amended, among the extraditable
offenses in all future treaties. With respect, however, to the state parties that are
signatories to the United Nations Convention Against Transnational Organized Crime that
was ratified by the Philippine Senate on October 22, 2001, money laundering is deemed
to be included as an extraditable offense in any extradition treaty existing between said
state parties, and the Philippines shall include money laundering as an extraditable
offense in every extradition treaty that may be concluded between the Philippines and any
of said state parties in the future.

RULE XVI - PENAL PROVISIONS

Section 16. Penalties for the Crime of Money Laundering.
16.1. Penalties under Section 4 (a), (b), (c) and (d) of the AMLA, as amended - The
penalty of imprisonment ranging from seven (7) to fourteen (14) years and a fine
of not less than Three Million Philippine Pesos (PHP3,000,000.00) but not more
than twice the value of the monetary instrument or property involved in the
offense, shall be imposed upon a person convicted under Section 4 (a), (b), (c)
and (d) of the AMLA, as amended.(a)
16.2. Penalties under Section 4 (e) and (f) of the AMLA, as amended - The penalty
of imprisonment from four (4) to seven (7) years and a fine of not less than One
Million Five Hundred Thousand Philippine Pesos (PHP1,500,000.00) but not
more than Three Million Philippine Pesos (PHP3,000,000.00), shall be imposed
upon a person convicted under Section 4 (e) and (f) of the AMLA, as amended.
(a)
16.3. Penalties under the last paragraph of Section 4 of the AMLA, as amended The penalty of imprisonment from six (6) months to four (4) years or 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,
shall be imposed on a person convicted under the last paragraph of Section 4 of
the AMLA, as amended.(a)

47

16.4. Penalties for knowingly participating in the commission of money

laundering-The penalty of imprisonment ranging from four (4) to seven (7) years
and a fine corresponding to not more than two hundred percent (200%) of the
value of the monetary instrument or property laundered shall be imposed upon
the covered person, its directors, officers or personnel who knowingly participated
in the commission of the crime of money laundering. (n)
16.5. Administrative Sanctions The imposition of administrative sanctions shall be
without prejudice to the filing of criminal charges against the persons responsible
for the violation.
After due notice and hearing, the AMLC shall, at its discretion, impose sanctions,
including monetary penalties, warning or reprimand, upon any covered person,
its directors, officers, employees or any other person for the violation of the
AMLA, as amended, and these Rules, or for failure or refusal to comply with
AMLC orders, resolutions and other issuances. Such monetary penalties shall
be in amounts as may be determined by the AMLC to be appropriate, which shall
not be more than Five hundred thousand pesos (Php500,000.00) per violation.
(a, Rule 14.a.4)
The AMLC may promulgate rules on fines and penalties taking into consideration
the attendant circumstances, such as the nature and gravity of the violation or
irregularity. (n)
16.6. Non-discrimination in establishing business relationships-The provisions of
the AMLA, as amended, shall not be construed or implemented in a manner that
will discriminate against certain customer types, such as politically-exposed
persons, as well as their relatives, or against a certain religion, race or ethnic
origin, or such other attributes or profiles when used as the only basis to deny
these persons access to the services provided by the covered persons.
Whenever a bank, or quasi-bank, financial institution or whenever any person or
entity commits said discriminatory act, the person or persons responsible for such
violation shall be subject to sanctions as may be deemed appropriate by their
respective supervising authorities. (n)
16.7. Penalties for 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 Thousand
Philippine Pesos (PHP100,000.00) but not more than Five Hundred Thousand
Philippine Pesos (PHP500,000.00), or both, shall be imposed on a person
convicted under Section 9 (b) of the AMLA, as amended.
16.8. Penalties for Malicious Reporting - Any person who, with malice, or in bad
faith, reports or files a completely unwarranted or false information relative to
money laundering transaction against any person shall be subject to a penalty of
six (6) months to four (4) years imprisonment and 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), at the discretion of the
court: Provided, That the offender is not entitled to avail of the benefits of the
Probation Law.
16.9. Penalties for Breach of Confidentiality The punishment of imprisonment
ranging from three (3) to eight (8) years and a fine of not less than Five Hundred
Thousand Philippine Pesos (PHP500,000.00) but not more than One Million
Philippine Pesos (PHP1,000,000.00), shall be imposed on a person convicted for
a violation under Section 9(c) of the AMLA, as amended. In case of a breach of
confidentiality that is published or reported by the media, the responsible reporter,
writer, president, publisher, manager and editor-in-chief shall be liable under the
AMLA, as amended.
16.10.Refusal by a Public Official or Employee to Testify Any public official or
employee who is called upon to testify and refuses to do the same or purposely

48

fails to testify shall suffer the same penalties prescribed under Section 16.8
hereof.
16.11.Where Offender is a Juridical Person, Alien or Public Officer - If the offender
is a corporation, association, partnership or any other juridical person, the penalty
of imprisonment and/or fine shall be imposed upon the responsible officers, as
the case may be, who participated in, or allowed by their gross negligence the
commission of the crime and the court may suspend or revoke its license. If the
offender is an alien, he shall, in addition to the penalties herein prescribed, be
deported without further proceedings after serving the penalties herein
prescribed. If the offender is a public official or employee, he shall, in addition to
the penalties prescribed herein, suffer perpetual or temporary absolute
disqualification from office, as the case may be.

RULE XVII - PROHIBITIONS

Section 17. Prohibitions Against Political Harassment.
17.1.

Prohibition against Political Persecution The AMLA, as amended, and these Rules
shall not be used for political persecution or harassment or as an instrument to hamper
competition in trade and commerce. No case for money laundering may be filed to the
prejudice of a candidate for an electoral office during an election period.

17.2.

Provisional Remedies Application; Exception

a) The AMLC may apply, in the course of the criminal proceedings, for provisional remedies
to prevent the monetary instrument or property, including related accounts, subject
thereof from being removed, concealed, converted, commingled with other property or
otherwise to prevent its being found or taken by the applicant or otherwise placed or
taken beyond the jurisdiction of the court.
b) Where there is conviction for money laundering under Section 4 of the AMLA, as
amended, the court shall issue a judgment of forfeiture in favor of the Government of the
Philippines with respect to the monetary instrument or property, including related
accounts, found to be proceeds of one or more unlawful activities.
RULE XVIII - RESTITUTIONS

Section 18. Restitution. - Restitution for any aggrieved party shall be governed by the provisions of the
New Civil Code.
RULE XIX - OTHER PROVISIONS
Section 19. Other Provisions.
19.1.

Implementing Rules and Regulations. These Rules or any portion thereof may be
revised or amended by unanimous vote of the members of the AMLC.

19.2.

AML/CFT Guidelines and Circulars of Supervising Authorities - The BSP, the SEC,
the IC, and the relevant regulatory bodies of the DNFBPs shall issue their respective
AML/CFT Guidelines and Circulars, not later than 180 days from the effectivity of this
Rules, to assist the AMLC in effectively implementing the provisions of the AMLA, as
amended, these Rules, as well as other pertinent laws and rules.

19.3.

Anti-Money Laundering/Combating
Programs)
1.

the

Financing

of

Terrorism

(AML/CFT)

All covered persons shall formulate and implement their AML/CFT Programs in
accordance with Section 9 and other pertinent provisions of the AMLA, as

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amended, these Rules, and AML/CFT Guidelines and Circulars issued by the
Supervising Authorities including, but not limited to, information dissemination on
money laundering and terrorism financing activities and their prevention,
detection and reporting, and the training of their responsible personnel. Every
covered person shall make available, upon request by the AMLC or the
Supervising Authorities, its AML/CFT Program.
Every covered person shall regularly update its AML/CFT Program, in no case
longer than, two (2) years, to incorporate changes in AML/CFT laws, rules and
regulations, policies and procedures, latest trends in money laundering and
terrorism financing typologies, and latest issuances by the Supervising
Authorities. Any revision or update in the AML/CFT Program shall likewise be
approved by the Board of Directors or the country/regional head or its equivalent
for local branches of foreign banks/entities/companies.
Covered persons which have not yet formulated their AML/CFT program are
hereby given ninety (90) days from the effectivity of these Rules to prepare the
same. Failure to comply with this requirement shall be subject to the imposition
of administrative sanctions under Section 16.5. (n)
2.

Every covered persons AML/CFT Program shall include detailed procedures

implementing a comprehensive, institution-wide know-your-client policy, set-up
an effective dissemination of information on money laundering and terrorism
financing activities and their prevention, detection and reporting, adopt internal
policies, procedures and controls, designate compliance officers at senior officer
level, institute adequate screening and recruitment procedures, provide an
ongoing employee training program, and set-up internal independent audit and
compliance functions to test the AML/CFT Program.

3.

Covered persons shall adopt, as part of their AML/CFT Programs, a system of

flagging and monitoring transactions that qualify as suspicious transactions or
covered transactions. All covered persons shall incorporate in their AML/CFT
Programs the provisions of these Rules and such other guidelines for reporting to
the AMLC of all transactions that engender the reasonable belief that a money
laundering offense is about to be, is being, or has been committed.

19.4.

Training of Personnel - Covered persons shall provide all their responsible officers and
personnel with efficient and effective training and continuing education programs to
enable them to fully comply with all their obligations under the AMLA, as amended, and
these Rules.

19.5.

Enrollment with the AMLCs Reporting System All Covered Persons not registered
with the AMLCs electronic reporting system are hereby required to enroll within ninety
(90) days from the effectivity of these Rules. Covered Persons which fail to register within
the aforesaid period shall be subject to the administrative sanctions provided under
Section 16.5., without prejudice to the criminal sanctions provided under the AMLA, as
amended.

19.6.

Monitoring of Compliance To ensure compliance with the AMLA, as amended, and

these RIRRs, the AMLC may among others, conduct on-site inspection, examination,
audit, testing, and require submission of relevant documents from covered persons
referred to in 3.1.4 to 3.1.7. (n)

RULE XX - NON-INTERVENTION
Section 20. Non-intervention. - Nothing contained in the AMLA, as amended, or these Rules nor in
related antecedent laws or existing agreements shall be construed to allow the AMLC to participate in
any manner in the operations of the BIR.

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RULE XXI - BUDGET OF THE AMLC

Section 21. Appropriations For and Budget of the AMLC.
21.1. Budget The annual budget appropriated by Congress for the AMLC in the General
Appropriations Act shall be used to defray the capital, maintenance and operational
expenses of the AMLC. The BSP may advance the funds necessary to defray the capital
outlay, maintenance and other operating expenses of the AMLC subject to reimbursement
from the budget of the AMLC as appropriated.
21.2. Costs and Expenses - The budget shall answer for indemnification for legal costs and
expenses reasonably incurred for the services of external counsel in connection with any
civil, criminal or administrative action, suit or proceeding to which members of the AMLC
and the Executive Director and other members of the Secretariat may be made a party by
reason of the performance of their functions or duties. The costs and expenses incurred
in defending the aforementioned action, suit or proceeding may be paid by the AMLC in
advance of the final disposition of such action, suit or proceeding upon receipt of an
undertaking by or on behalf of the member to repay the amount advanced should it be
ultimately determined that said member is not entitled to such indemnification.

RULE XXII - SEPARABILITY CLAUSE

Section 22. Separability Clause. If any provision of these Rules or the application thereof to any
person or circumstance is held to be invalid, the other provisions of these Rules, and the application
of such provision or Rule to other persons or circumstances, shall not be affected thereby.

RULE XXIII - REPEALING CLAUSE

Section 23. Repealing Clause. All laws, decrees, executive orders, rules and regulations or parts
thereof, including the relevant provisions of Republic Act No. 1405, as amended; Republic Act No.
6426, as amended; Republic Act No. 8791, as amended, and other similar laws, as are inconsistent
with the AMLA, as amended, are hereby repealed, amended or modified accordingly; Provided, that
the penal provisions shall not apply to acts done prior to the effectivity of the AMLA on October 17,
2001.

RULE XXIV EFFECTIVITY

Section 24. Effectivity. These Rules shall take effect fifteen (15) days after complete publication in
the Official Gazette or in a newspaper of general circulation.
Approved this ____________________in the City of Manila.

By the Anti-Money Laundering Council:

AMANDO M. TETANGCO, JR.

Chairman
(Governor, Bangko Sentral ng Pilipinas)

TERESITA J. HERBOSA
Member

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(Chairperson, Securities and Exchange Commission)

EMMANUEL F. DOOC
Member
(Commissioner, Insurance Commission)

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