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Rules and Regulations Implementing the Anti-Money Laundering Act of 2001.     page 2

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      RULE 3

      POWERS OF THE AMLC

      Section 1. Authority to Initiate Investigations on the Basis of Voluntary Citizens’ Complaints and Government Agency Referrals. -

      (a) Any person, including covered institutions not subject to any account secrecy laws and branches, departments, bureaus, offices, agencies and instrumentalities of the government, including government-owned and –controlled corporations, may report to the AMLC any activity that engenders reasonable belief that any money laundering offense under Section 4 of the AMLA and defined under Rule 4 of these Rules is about to be, is being or has been committed.

      (b) The person so reporting shall file a Voluntary Citizens’ Complaint (VCC) or Government Referral (GR) in the form prescribed by the AMLC. The VCC and GR forms shall indicate that the members of the AMLC, the Executive Director and all the members of the Secretariat are bound by the confidentiality rule provided in Section 7, Rule 2 of these Rules. The VCC shall be signed by the complainant. The GR shall be signed by the authorized representative of the government agency concerned, indicating his current position and rank therein.

       
      (c) Any person who files a VCC or GR shall not incur any liability for all their acts in relation thereto that were done in good faith. However, any person who, with malice, or in bad faith, reports or files a completely unwarranted or false information relative to any money laundering transaction against any person shall be subject to the penalties provided for under Section 14 (c) of the AMLA.

      (d) On the basis of the VCC or GR, the AMLC may initiate investigation thereof, and based on the evidence gathered, the AMLC may cause the filing of criminal complaints with the Department of Justice or the Ombudsman for the prosecution of money laundering offenses.

       

      Sec. 2. Authority to Initiate Investigations on the Basis of Covered Transaction Reports. -

      (a) Covered Transactions. The mandatory duty and obligation of covered institutions to make reports to the AMLC covers the following transactions:

      (1) A single transaction involving an amount in excess of Four million Philippine pesos (Php4,000,000.00) or an equivalent amount in foreign currency based on the prevailing exchange rate where the client is not properly identified and/or the amount is not commensurate with his business or financial capacity.

      (2) A single transaction involving an amount in excess of Four million Philippine pesos (Php4,000,000.00) or an equivalent amount in foreign currency based on the prevailing exchange rate which has no underlying legal or trade obligation, purpose, origin, or economic justification.

      (3) A series or combination of transactions conducted within five (5) consecutive banking days aggregating to a total amount in excess of Four million Philippine pesos (Php4,000,000.00) or an equivalent in foreign currency based on the prevailing exchange rate where the client is not properly identified and/or the amount is not commensurate with his business or financial capacity.

      (4) A series or combination of transactions conducted within five (5) consecutive banking days aggregating to a total amount in excess of Four million Philippine pesos (Php4,000,000.00) or an equivalent in foreign currency based on the prevailing exchange rate exchange rate where most, if not all the transactions, do not have any underlying legal or trade obligation, purpose, origin, or economic justification.

      (5) A single unusually large and complex transaction in excess of Four million Philippine pesos (Php4,000,000.00), especially a cash deposit or investment having no credible purpose or origin, underlying trade obligation or contract, regardless of whether or not the client is properly identified and/or the amount is commensurate with his business or financial capacity.

      (6) A series, combination or pattern of unusually large and complex transactions aggregating to, without reference to any period, a total amount in excess of Four million Philippine pesos (Php4,000,000.00), especially cash deposits and/or investments having no credible purpose or origin, underlying trade obligation or contract, regardless of whether or not the client is properly identified and/or the amount is commensurate with his business or financial capacity.

      (b) Obligation to Report Covered Transactions. All covered institutions supervised or regulated by the BSP, the SEC and the IC shall report all covered transactions to the AMLC within five (5) working days from the date of the transaction or from the date when the covered institution concerned gained/acquired information/knowledge that the transaction is a covered transaction.

      (c) Covered Transaction Report Form. The Covered Transaction Report (CTR) shall be in the form prescribed by the appropriate Supervising Authority and approved by the AMLC. It shall be signed by the employee(s) who dealt directly with the customer in the transaction and/or who made the initial internal report within the covered institution, the compliance officer or his equivalent, and a senior official of the bank with a rank not lower than senior vice-president. The CTR shall be filed with the AMLC in a central location, to be determined by the AMLC, as indicated in the instructions on the CTR form.

      (d) Exemption from Bank Secrecy Laws. When reporting covered transactions to the AMLC, banks and their officers, employees, representatives, agents, advisors, consultants or associates 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.

      (e) Safe Harbor Provision. No administrative, criminal or civil proceedings shall lie against any person for having made a covered transaction report in the regular performance of his duties and in good faith, whether or not such reporting results in any criminal prosecution under the AMLA or any other Philippine law.

      (f) Filing of Criminal Complaints. On the basis of the CTR, the AMLC may initiate investigation thereof, and based on the evidence gathered, the AMLC may cause the filing of criminal complaints with the Department of Justice or the Ombudsman for the prosecution of money laundering offenses.

      (g) Malicious Reporting. Any person who, with malice, or in bad faith, reports or files a completely unwarranted or false information relative to any money laundering transaction against any person, shall be subject to a penalty of imprisonment from six (6) months to four (4) years 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 under the Probation Law.

      If the offender is a corporation, association, partnership or any juridical person, the penalty shall be imposed upon the responsible officers, as the case may be, who participated or failed to prevent its commission. If the offender is a juridical person, 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.

      (h) Breach of Confidentiality. When reporting covered transactions to the AMLC, covered institutions and their officers, employees, representatives, agents, advisors, consultants or associates are prohibited from communicating, directly or indirectly, in any manner or by any means, to any person, entity, or the media, the fact that a covered 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. Violation of this provision shall constitute the offense of breach of confidentiality punished under Section 14 (d) of the AMLA with imprisonment 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).

      (i) File of Covered Transactions. – Covered institutions shall maintain a complete file on all covered transactions that have been reported to the AMLC. Covered institutions shall undertake the necessary adequate security measures to ensure the confidentiality of such file. The file of covered transactions shall be kept for at least five (5) years: Provided, That if money laundering cases based thereon have been filed in court, the file must be retained beyond the five(5)-year period until it is confirmed that the case has been finally resolved or terminated by the court.

      Sec. 3. Authority to Freeze Accounts.

      (a) The AMLC is authorized under Sections 6 (6) and 10 of the AMLA to freeze any account or any monetary instrument or property subject thereof upon determination that probable cause exists that the same is in any way related to any unlawful activity and/or money laundering offense. The AMLC may freeze any account or any monetary instrument or property subject thereof prior to the institution or in the course of, the criminal proceedings involving the unlawful activity and/or money laundering offense to which said account, monetary instrument or property is any way related. For purposes of Section 10 of the AMLA and Section 3, Rule 3 of these Rules, 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 subject thereof sought to be frozen is in any way related to said unlawful activity and/or money laundering offense.

      (b) The freeze order on such account shall be effective immediately for a period not exceeding fifteen (15) days.

      (c) The AMLC must serve notice of the freeze order upon the covered institution concerned and the owner or holder of the deposit, investment or similar account, simultaneously with the issuance thereof. Upon receipt of the notice of the freeze order, the covered institution concerned shall immediately stop, freeze, block, suspend or otherwise place under its absolute control the account and the monetary instrument or property subject thereof.

      (d) The owner or holder of the account so notified shall have a non-extendible period of seventy-two (72) hours upon receipt of the notice to file a verified explanation with the AMLC why the freeze order should be lifted. Failure of the owner or holder of the account to file such verified explanation shall be deemed waiver of his right to question the freeze order.

      (e) The AMLC shall have seventy-two (72) hours from receipt of the written explanation of the owner or holder of the frozen account to resolve the same. If the AMLC fails to act within said period, the freeze order shall automatically be dissolved. However, the covered institution shall not lift the freeze order without securing official confirmation from the AMLC.

      (f) Before the fifteen (15)-day period expires, the AMLC may apply in court for an extension of said period. Upon the timely filing of such application and pending the decision of the court to extend the period, said period shall be suspended and the freeze order shall remain effective.

      (g) In case the court denies the application for extension, the freeze order shall remain effective only for the balance of the fifteen (15)-day period.

      (h) No court shall issue a temporary restraining order or writ of injunction against any freeze order issued by the AMLC or any court order extending period of effectivity of the freeze order except the Court of Appeals or the Supreme Court.

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

      Sec. 4. Authority to Inquire into Accounts. –

      (a) The AMLC is authorized under Section 7 (2) of the AMLA to issue orders addressed to the appropriate Supervising Authority or any covered institution to determine and reveal the true identity of the owner of any monetary instrument or property subject of a covered transaction report, or a request for assistance from a foreign State, or believed by the AMLC, on the basis of substantial evidence, to be, in whole or in part, wherever located, representing, involving, or related to, directly or indirectly, in any manner or by any means, the proceeds of an unlawful activity. For purposes of the AMLA and these Rules, substantial evidence includes such relevant evidence as a reasonable mind might accept as adequate to support a conclusion.

    1. In case of any violation of the AMLA involving bank deposits and investments, the AMLC may inquire into or examine any particular deposit or investment with any banking institution or non-bank financial institution upon order of any competent court when the AMLC has established that there is probable cause that the deposits or investments involved are in any way related to any unlawful activity and/or money laundering offense. The AMLC may file the application for authority to inquire into or examine any particular bank deposit or investment in court, prior to the institution or in the course of, the criminal proceedings involving the unlawful activity and/or money laundering offense to which said bank deposit or investment is any way related. For purposes of Section 11 of the AMLA and Section 4, Rule 3 of these Rules, 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 bank deposit or investment sought to be inquired into or examined is in any way related to said unlawful activity and/or money laundering offense.

 

Sec. 5. Authority to Institute Civil Forfeiture Proceedings.The AMLC is authorized under Section 7 (3) of the AMLA to institute civil forfeiture proceedings and all other remedial proceedings through the Office of the Solicitor General.

 

Sec. 6. 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 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 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.

 

Sec. 7. Authority to Develop and Implement Educational Programs.The AMLC is authorized under Section 7 (9) of the AMLA to develop educational programs on the pernicious effects of money laundering, the methods and techniques used in money laundering, the viable means of preventing money laundering and the effective ways of prosecuting and punishing offenders. The AMLC shall conduct nationwide information campaigns to heighten awareness of the public of their civic duty as citizens to report any and all activities which engender reasonable belief that a money laundering offense under Section 4 of the AMLA is about to be, is being or has been committed.

Sec. 8. Authority to Issue, Clarify and Amend the Rules and Regulations Implementing R.A. No. 9160.The AMLC is authorized under Sections 7 (7), 18 and 19 of the AMLA to promulgate as well as clarify and/or amend, as may be necessary, these Rules. The AMLC may make appropriate issuances for this purpose.

 

Sec. 9. Authority to Establish Information Sharing System.Subject to such limitations as provided for by law, the AMLC is authorized under Section 7 (7) of the AMLA to establish an information sharing system that will enable the AMLC to store, track and analyze money laundering transactions for the resolute prevention, detection and investigation of money laundering offenses. For this purpose, the AMLC shall install a computerized system that will be used in the creation and maintenance of an information database. The AMLC is also authorized, under Section 7 (9) of the AMLA to enter into memoranda of agreement with 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 for sharing of all information that may, in any way, facilitate the resolute prevention, investigation and prosecution of money laundering offenses and other violations of the AMLA.

 

Sec. 10. Authority to Establish System of Incentives and Rewards.The AMLC is authorized under Section 15 of the AMLA to establish a system of special incentives and rewards to be given to the appropriate government agency and its personnel that led and initiated the investigation, prosecution, and conviction of persons involved in money laundering offenses under Section 4 of the AMLA. Any monetary reward shall be made payable out of the funds appropriated by Congress.

 

Sec. 11. Other Inherent, Necessary, Implied or Incidental Powers.The AMLC shall perform such other functions and exercise such other powers as may be inherent, necessary, implied or incidental to the functions assigned, and powers granted, to it under the AMLA for the purpose of carrying out the declared policy of the AMLA.

     

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