LAW ON SECRECY OF BANK DEPOSITS REPUBLIC ACT NO.

1405

AN ACT PROHIBITING DISCLOSURE OF OR INQUIRY INTO, DEPOSITS WITH ANY BANKING INSTITUTION AND PROVIDING PENALTY
THEREFOR

SECTION 1. It is hereby declared to be the policy of the Government to give encouragement to the people to deposit their money in
banking institutions and to discourage private hoarding so that the same may be properly utilized by banks in authorized loans to
assist in the economic development of the country.

SECTION 2. All deposits of whatever nature with banks or banking institutions in the Philippines including investments in bonds
issued by the Government of the Philippines, its political subdivisions and its instrumentalities, are hereby considered as of an
absolutely confidential nature and may not be examined, inquired or looked into by any person, government official, bureau or
office, except upon written permission of the depositor, or in cases of impeachment, or upon order of a competent court in cases of
bribery or dereliction of duty of public officials, or in cases where the money deposited or invested is the subject matter of the
litigation.

SECTION 3. It shall be unlawful for any official or employee of a banking institution to disclose to any person other than those
mentioned in Section two hereof any information concerning said deposits.

SECTION 4. All Acts or parts of Acts, Special Charters, Executive Orders, Rules and Regulations which are inconsistent with the
provisions of this Act are hereby repealed.

SECTION 5. Any violation of this law will subject offender upon conviction, to an imprisonment of not more than five years or a fine
of not more than twenty thousand pesos or both, in the discretion of the court.

SECTION 6. This Act shall take effect upon its approval.

Approved, September 9, 1955

The Bank Secrecy Law protects all deposits of whatever nature in banks or banking institutions in the Philippines as well as
investments in government bond. This law prohibits any person, subject to the exceptions below, from disclosing to any person any
information, relative to the funds or properties belonging to the depositors in the custody of the bank. Simply put, no one can just
go to your bank and ask for your bank balance.

However, the rule is not absolute. The following are the exceptions to the bank secrecy law:

1. Written permission or consent in writing by the depositor;

2. In cases of impeachment;

3. Upon order of the court in cases of bribery or dereliction of duty of public officials;

4. Upon order of the court in cases where the money deposited or invested is the subject matter of the litigation;

5. Upon a subpoena issued by the Ombudsman concerning an investigation it is conducting, provided that there must already be a
case pending in court, the account be clearly identified, the inspection be limited to the subject matter of the pending case; and the
bank personnel and the depositor must be notified to be present during the inspection;

6. The BIR can inquire into bank deposits in an application for compromise of tax liability or determination of a decedent’s gross
estate;

7. The Anti-Money Laundering Council (“AMLC”) can examine bank accounts pursuant to a court order, where there is probable
cause that the deposits are related to an unlawful activity or money laundering offense;

8. The AMLC can examine bank accounts, WITHOUT a court order, where there is probable cause that the deposits are related to
certain crimes such as kidnapping for ransom, violation of the Dangerous Drugs Act, hijacking, destructive arson, murder and
violations of RA 6235 (acts inimical to civil aviation);

9. The Bangko Sentral can examine bank accounts in the course of its periodic or special examination regarding compliance with
Anti-Money Laundering Law.

As you can see, although there are many exceptions, securing such exceptions is not an easy task. The easiest way to waive the
secrecy of bank deposits is through a written waiver. Although there is no prescribed form for a waiver, it is necessary that the
waiver be made voluntarily, knowingly and with sufficient awareness of relevant circumstances and consequences. Thus, as a matter
of practice, banks will require the depositor to state in his waiver the specific bank account, bank branch, name of depositor, period
covered by the transactions and the name of the person authorized to access the bank account.

You may be curious if there is any criminal liability for violating the bank secrecy law. Yes, there is criminal liability. Any person
violating this law may be imprisoned for not more than five (5) years, or meted a fine not exceeding P20,000.00 or both.

INTELLECTUAL PROPERTY RIGHTS IN THE PHILIPPINES Brief Background

The Philippine government has made it a State policy to protect and promote intellectual property rights. This policy was enshrined
both in the 1973 Constitution which provides that “the exclusive right to inventions, writings and artistic creations shall be secured
to inventors, authors, and artists for a limited period” and in the 1987 Constitution which explicitly mandates that the State shall
protect intellectual property.

The Philippines became a member of the World Intellectual Property Organization [WIPO] in 1980. It was a signatory to a number of
significant multilateral international agreements and treaties for the protection and promotion of intellectual property rights.
Republic Act No. 8293 [An Act Prescribing the Intellectual Property Code and Establishing the Intellectual Property Office, Providing
for Its Powers and Functions, and for Other Purposes] otherwise known as the Intellectual Property Code of the Philippines.

State policy declaration:

The State recognizes that an effective intellectual and industrial property system is vital to the development of domestic and
creative activity, facilitates transfer of technology, attracts foreign investments, and ensures market access for our products. It shall
protect and secure the exclusive rights of scientists, inventors, artists and other gifted citizens to their intellectual property and
creations, particularly when beneficial to the people, for such periods as provided in this Act.

The use of intellectual property bears a social function. To this end, the State shall promote the diffusion of knowledge and
information for the promotion of national development and progress and the common good.

It is also the policy of the State to streamline administrative procedures of registering patents, trademarks and copyright, to
liberalize the registration on the transfer of technology, and to enhance the enforcement of intellectual property rights in the
Philippines.

Effect on international conventions and on principle of reciprocity:

Any person who is a national or who is domiciled or has a real and effective industrial establishment in a country which is a party to
any convention, treaty or agreement relating to intellectual property rights or the repression of unfair competition, to which the
Philippines is also a party, or extends reciprocal rights to nationals of the Philippines by law, shall be entitled to benefits to the
extent necessary to give effect to any provision of such convention, treaty or reciprocal law, in addition to the rights to which any
owner of an intellectual property right is otherwise entitled by this Act.

Parts of the law:

The Intellectual Property Code of the Philippines is divided into five [5] parts, to wit:

PART I - The Intellectual Property Office PART II - The Law on Patents PART III - The Law on Trademarks, Service Marks
and Trade Names PART IV - The Law on Copyright PART V - Final Provisions

Intellectual property rights under the I. P. Code:

The intellectual property rights under the Intellectual Property Code are as follows:

1. Copyright and related rights; 2. Trademarks and service marks; 3. Geographic indications; 4. Industrial designs; 5. Patents;
6. Layout designs [topographies] of integrated circuits; and 7. Protection of undisclosed information.

Government Agencies:

The agency of the government in charge of the implementation of the Intellectual Property Code is the Intellectual Property Office
which replaced the Bureau of Patents, Trademarks and Technology Transfer. It is divided into six [6] Bureaus, namely:

[1] Bureau of Patents; [2] Bureau of Trademarks; [3] Bureau of Legal Affairs; [4] Documentation, Information and Technology
Transfer Bureau; [5] Management Information System and EDP Bureau; and [6] Administrative, Financial and Personnel Services
Bureau.

Functions of the Intellectual Property Office:

The Intellectual Property Office is mandated under the law to

1. Examine applications for the grant of letters patent for inventions and register utility models and industrial

2. Examine applications for the registration of marks, geographic indication and integrated circuits;

3. Register technology transfer arrangements and settle disputes involving technology transfer payments covered by the provisions
of Part II, Chapter IX on Voluntary Licensing and develop and implement strategies to promote and facilitate technology transfer;

4. Promote the use of patent information as a tool for technology development;

5. Publish regularly in its own publication the patents, marks, utility models and industrial designs, issued and approved, and the
technology transfer arrangements registered;

6. Administratively adjudicate contested proceedings affecting intellectual property rights; and

7. Coordinate with other government agencies and the private sector efforts to formulate and implement plans and policies to
strengthen the protection of intellectual property rights in the country.

Significant features of the law:

1. A shift was made from the "first-to-invent system" under R. A. 165 [old law] to "first-to-file system" under the new law.

2. In the case of inventions, the period of the grant was increased from 17 years from grant under the old law to 20 years from date
of filing under the new law.

3. In the case of utility models, the previous grant of 5 years plus renewals of 5 years each under the old law was changed to 7 years
without renewal under the new law.

4. In the case of industrial designs, the previous grant of 5 years plus renewals of 5 years each was maintained.
5. Under the old law, there was no opposition proceedings and the examination is mandatory; under the new law, the examination
is made only upon request [possibly with or without examination].

6. Under the old law, publication is made after the grant; under the new law, publication is effected after 18 months from filing date
or priority date.

7. Under the old law, the penalties for repetition of infringement are: PhP10,000 and/or 5 years of imprisonment and the offense
prescribes in 2 years; under the present law, the penalties range from PhP100,000 to PhP300,000 and/or 6 months to 3 years of
imprisonment and the offense prescribes in 3 years.

The scheme of penalties for infringement has also been changed. From the previous fine of Php200 to Php2,000 and/or
imprisonment of 1 year, the current range of penalties are as follows:

For first offenders - fine of PhP50,000 to PhP150,000 and/or imprisonment of 1 to 3 years

For second offenders - fine of PhP150,000 to PhP500,000 and/or imprisonment of 3 to 6 years

For third and subsequent offenders - fine of PhP500,000 to PhP1.5 Million and/or imprisonment of 6 to 9 years.

In case of insolvency, the offender shall furthermore suffer subsidiary imprisonment.

BATAS PAMBANSA BLG. 22

AN ACT PENALIZING THE MAKING OR DRAWING AND ISSUANCE OF A CHECK WITHOUT SUFFICIENT FUNDS OR CREDIT AND FOR
OTHER PURPOSES.

Section 1. Checks without sufficient funds. - Any person who makes or draws and issues any check to apply on account or for value,
knowing at the time of issue that he does not have sufficient funds in or credit with the drawee bank for the payment of such check
in full upon its presentment, which check is subsequently dishonored by the drawee bank for insufficiency of funds or credit or
would have been dishonored for the same reason had not the drawer, without any valid reason, ordered the bank to stop payment,
shall be punished by imprisonment of not less than thirty days but not more than one (1) year or by a fine of not less than but not
more than double the amount of the check which fine shall in no case exceed Two Hundred Thousand Pesos, or both such fine and
imprisonment at the discretion of the court.

The same penalty shall be imposed upon any person who, having sufficient funds in or credit with the drawee bank when he makes
or draws and issues a check, shall fail to keep sufficient funds or to maintain a credit to cover the full amount of the check if
presented within a period of ninety (90) days from the date appearing thereon, for which reason it is dishonored by the drawee
bank.

Where the check is drawn by a corporation, company or entity, the person or persons who actually signed the check in behalf of
such drawer shall be liable under this Act.

Section 2. Evidence of knowledge of insufficient funds. - The making, drawing and issuance of a check payment of which is refused
by the drawee because of insufficient funds in or credit with such bank, when presented within ninety (90) days from the date of the
check, shall be prima facie evidence of knowledge of such insufficiency of funds or credit unless such maker or drawer pays the
holder thereof the amount due thereon, or makes arrangements for payment in full by the drawee of such check within (5) banking
days after receiving notice that such check has not been paid by the drawee.

Section 3. Duty of drawee; rules of evidence. - It shall be the duty of the drawee of any check, when refusing to pay the same to the
holder thereof upon presentment, to cause to be written, printed, or stamped in plain language thereon, or attached thereto, the
reason for drawee's dishonor or refusal to pay the same: Provided, That where there are no sufficient funds in or credit with such
drawee bank, such fact shall always be explicitly stated in the notice of dishonor or refusal. In all prosecutions under this Act, the
introduction in evidence of any unpaid and dishonored check, having the drawee's refusal to pay stamped or written thereon or
attached thereto, with the reason therefor as aforesaid, shall be prima facie evidence of the making or issuance of said check, and
the due presentment to the drawee for payment and the dishonor thereof, and that the same was properly dishonored for the
reason written, stamped or attached by the drawee on such dishonored check.

Not with standing receipt of an order to stop payment, the drawee shall state in the notice that there were no sufficient funds in or
credit with such bank for the payment in full of such check, if such be the fact.

Section 4. Credit construed. - The word "credit" as used herein shall be construed to mean an arrangement or understanding with
the bank for the payment of such check.

Section 5. Liability under the Revised Penal Code. - Prosecution under this Act shall be without prejudice to any liability for violation
of any provision of the Revised Penal Code.

Section 6. Separability clause. - If any separable provision of this Act be declared unconstitutional, the remaining provisions shall
continue to be in force.

Section 7. Effectivity. - This Act shall take effect fifteen days after publication in the Official Gazette.

Approved: April 3, 1979.

A Bangko Sentral ng Pilipinas briefer on the Anti-Money Laundering Act of 2001

1. What is money laundering?

Money laundering is an act or series or combination of acts whereby proceeds of an unlawful activity, whether in cash, property or
other assets, are converted, concealed or disguised to make them appear to have originated from legitimate sources. One way of
laundering money is through the financial system. 
Republic Act No. 9160, otherwise known as the Anti-Money Laundering Act of
2001 (AMLA), as amended, defined money laundering as a scheme whereby proceeds of an unlawful activity are transacted or
attempted to be transacted, thereby making them appear to have originated from legitimate sources.

2. What has the Philippine government done to curb money laundering?

The government enacted Republic Act (R.A.) No. 9160 (The Anti-Money Laundering Act of 2001), which took effect on 17 October
2001. Certain provisions of AMLA were amended by R.A. No. 9194 (An Act Amending R.A. 9160) effective 23 March 2003. It has also
issued the Revised Implementing Rules and Regulations (RIRR) implementing R.A. No. 9160, as amended.

3. What are considered unlawful activities under the AMLA, as amended?


There are 14 unlawful activities or predicate crimes covered by the AMLA. These are, 
in the order enumerated in the law:

Kidnapping for ransom, Drug offenses, Graft and corrupt practices, Plunder, Robbery and extortion, Jueteng and masiao, Piracy on
the high seas, Qualified theft, Swindling, Smuggling, Electronic Commerce crimes, Hijacking, destructive arson and murder, including
those perpetrated against non-combatant persons (terrorist acts), Securities fraud, Felonies or offenses of a similar nature
punishable under penal laws of other 
countries

4. How is money laundered through the financial system?

Placement – involves initial placement or introduction of the illegal funds into the financial system. Financial institutions are usually
used at this point.

Layering – involves a series of financial transactions during which the dirty money is passed through a series of procedures, putting
layer upon layer of persons and financial activities into the laundering process. Ex. wire transfers, use of shell corporations, etc.

Integration – the money is once again made available to the criminal with the occupational and geographic origin obscured or
concealed. The laundered funds are now integrated back into the legitimate economy through the purchase of properties,
businesses and other investments.

5. Why is Money Laundering a problem?

Money laundering allows criminals to preserve and enjoy the proceeds of their crimes, thus providing them with the incentives and
the means to continue their illegal activities. At the same time, it provides them the opportunity to appear in public like legitimate
entrepreneurs. Organized crime, through money laundering, is known to have the capacity to destabilize governments and
undermine their financial systems. It is thus a threat to national security.

6. What are the salient features of the law?

It criminalizes money laundering, meaning it makes money laundering a crime, and 
provides penalties for its commission, including
hefty fines and imprisonment.

It states clearly the determination of the government to prevent the Philippines from becoming a haven for money laundering, while
ensuring to preserve the integrity and confidentiality of good bank accounts.

It creates an Anti-Money Laundering Council (AMLC) that is tasked to oversee the implementation of the law and to act as a financial
intelligence unit to receive and analyze covered and suspicious transaction reports.

It establishes the rules and the administration process for the prevention, detection and prosecution of money laundering activities.

It relaxes the bank deposit secrecy laws authorizing the AMLC and the Bangko Sentral ng Pilipinas access to deposit and investment
accounts in specific circumstances.

It requires covered institutions to report covered and suspicious transactions and to cooperate with the government in prosecuting
offenders. It also requires them to know their customers and to safely keep all records of their transactions.

It carries provisions to protect innocent parties by providing penalties for causing the disclosure to the public of confidential
information contained in the covered and suspicious transactions.

It establishes procedures for international cooperation and assistance in the apprehension and prosecution of money laundering
suspects.

7. What is the Anti-Money Laundering Council (AMLC)? What are its powers?

The AMLC is the Philippines’ financial intelligence unit, which is tasked to implement the AMLA. It is composed of the Governor of
the Bangko Sentral ng Pilipinas (BSP) as Chairman & the Commissioner of the Insurance Commission (IC) and the Chairman of the
Securities and Exchange Commission (SEC) as members. 
The AMLC is authorized to:

Require and receive covered or suspicious transaction reports from covered institutions.

Issue orders to determine the true identity of the owner of any monetary instrument or property that is the subject of a covered or
suspicious transaction report, and to request the assistance of a foreign country if the Council believes it is necessary.

Institute civil forfeiture and all other remedial proceedings through the Office of the Solicitor General.

Cause the filing of complaints with the Department of Justice or the Ombudsman for the prosecution of money laundering offenses.
Investigate suspicious transactions, covered transactions deemed suspicious, money laundering activities and other violations of the
AMLA.

Secure the order of the Court of Appeals to freeze any monetary instrument or property alleged to be the proceeds of unlawful
activity.

Implement such measures as may be necessary and justified to counteract money laundering.

Receive and take action on any request from foreign countries for assistance in their own anti-money laundering operations.

Develop educational programs to make the public aware of the pernicious effects of money laundering and how they can participate
in bringing the offenders to the fold of the law.

Enlist the assistance of any branch of government for the prevention, detection and investigation of money laundering offenses and
the prosecution of offenders. In this connection, the AMLC can require intelligence agencies of the government to divulge any
information that will facilitate the work of the Council in going after money launderers.

Impose administrative sanctions on those who violate the law, and the rules, regulations, orders and resolutions issued in
connection with the enforcement of the law.

8. What are the covered institutions?

Banks, offshore banking units, quasi-banks, trust entities, non-stock savings and loan associations, pawnshops, and all other
institutions, including their subsidiaries and affiliates supervised and/or regulated by the Bangko Sentral ng Pilipinas (BSP)

Insurance companies, holding companies and all other institutions supervised or regulated by the Insurance Commission (IC)

Securities dealers, brokers, pre-need companies, foreign exchange corporations, investment houses, trading advisers, as well as
other entities supervised or regulated by the Securities and Exchange Commission (SEC)

9. What are the Customer Identification Requirements – KYC (Know Your Customer Rule)?

Covered institutions shall:

Establish and record the true identity of their clients based on official documents.

In case of individual clients, maintain a system of verifying the true identity of their clients.

In case of corporate clients, require a system verifying their legal existence and organizational structure, as well as the authority and
identification of all persons purporting to act in their behalf.

Establish appropriate systems and methods based on internationally compliant standards and adequate internal controls for
verifying and recording the true and full identify of their customers.

10. What are the Record-Keeping Requirements?


All covered institutions shall:

Maintain and safely store all records of all their transactions for five years from the transaction dates;

Ensure that said records/files contain the full and true identity of the owners or holders of the accounts involved in the covered
transactions and all other identification documents;

Undertake the necessary adequate measures to ensure the confidentiality of such files;

Prepare and maintain documentation, in accordance with 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;

Maintain and safely store all records of existing and new accounts and of new transactions for 5 years from October 17, 2001 or
from the dates of the accounts or transactions, whichever is later;

Anent closed accounts, preserve and safely store the records on customer identification, account files and business correspondence
for at least 5 years from the dates they were closed;

If a money laundering case based on any record kept by the covered institution has been filed in court, retain said files until it is
confirmed that the case has been finally resolved or terminated by the court; and

Retain records as originals in such forms as are admissible in court

11. What are covered transactions?

Transaction in cash or other equivalent monetary instruments involving a total amount in excess of P500,000.00 within one business
day.

12. What are suspicious transactions?


Transactions, regardless of the amount involved, where 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 client’s 
transaction is structured in order to avoid
being the subject of reporting requirements under the Act;

e. any circumstance relating to the transaction which is observed to deviate from the profile of the client and/or the client’s past
transactions with the covered institution;

f. the transaction is in any way related to an unlawful activity or offense under this Act that is about to be, is being or has been
committed; or

g. any transaction that is similar or analogous to the foregoing.

13. What are the reporting requirements?

Covered institutions shall report to the AMLC all covered transactions and suspicious transactions within five working days from
occurrence thereof, unless the Supervision Authority (the Bangko Sentral ng Pilipinas, the Securities and Exchange Commission, or
the Insurance Commission) prescribes a longer period not exceeding ten working days. 
Should a transaction be determined to be
both a covered transaction and a suspicious transaction, it shall be reported as suspicious transaction.

14. How is reporting done?

The reports on covered and/or suspicious transactions shall be accomplished in the prescribed formats and submitted within five
business days from occurrence of the transactions in a secured manner to the AMLC in electronic form, either via diskettes, leased
lines, or through internet facilities. The corresponding hard copy for suspicious transactions shall be sent to AMLC at the 5th Floor
EDPC Building, Bangko Sentral ng Pilipinas Complex, Manila, Philippines. All pawnshops should coordinate with the AMLC thru tel.
nos. 523-4421, 521-5662 or 302-3979 on reporting requirements, procedures and deadlines.

15. Are there sanctions for failure to report covered or suspicious transactions and non-compliance with R.A. 9160, as amended?


Sanctions/penalties shall be imposed on pawnshops that will fail to comply with the provisions of R.A. 9160, as amended.

16. What are the sanctions for failure to report covered or suspicious transactions?

Any person, required to report covered and suspicious transactions failed to do so will be subjected to penalty of 6 months to 4
years imprisonment or a fine of not less than P100,000.00 but not more than P500,000.00, or both.

17. Are there confidentiality restrictions on the reporting of covered transaction and/or suspicious transaction?


When reporting covered transactions or suspicious transactions to the AMLC, covered institutions and their officers and
employees, are prohibited from communicating, directly or indirectly, in any manner or by any means, to any person, entity, the
media, the fact that a covered or suspicious transaction report was made, the contents thereof, 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 institution, or media shall be held
criminally liable.

18. What are the other offenses punishable under the AMLA, as amended?

a. Failure to keep records is committed by any responsible official or employee of a covered institution who fails to maintain and
safely store all records of transactions for 5 years from the dates the transactions were made or when the accounts were closed. 

The penalty is 6 months to 1 year imprisonment or a fine of not less than P100,000.00 but not more than P500,000.00, or both.

b. Malicious reporting is committed by any person who, with malice or in bad faith, reports or files a completely unwarranted or
false information regarding a money laundering transaction against any person. 
The penalty is 6 months to 4 years imprisonment
and a fine of not less than P100,000.00 but not more than P500,000.00. The offender is not entitled to the benefits of the Probation
Law.

c. Breach of Confidentiality. For this offense, the penalty is 3 to 8 years imprisonment and a fine of not less than P500,000.00 but not
more than P1 million. In case the prohibited information is reported by media, the responsible reporter, writer, president, publisher,
manager, and editor-in-chief are held criminally liable.

d. Administrative offenses. The AMLC, after due investigation, can impose fines from P100,000.00 to P500,000.00 on officers and
employees of covered institutions or any person who violates the provisions of the AMLA, as amended, the Implementing Rules and
Regulations, and orders and resolutions issued pursuant thereto.