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AMLA’s Firm Resolve

(Article Published in the Feb 28,2013 issue of Business Mirror)

       Escaping the blacklisting of our country during last month’s plenary of the FATF ought not to lull us into complacency. Some more fine-tuning and recalibration need to be done.

       Undoubtedly, it must have been the serious mien of the criminal provisions in R.A. No. 10365, the latest revision of our anti-money laundering law, that convinced the FATF last week not to put the Philippines in its uncooperative, or black list.

       In addition to enlarging the list of covered persons, some of whom we mentioned in our last week’s column, R.A. No. 10365 also increased the number of so-called “predicate offenses”, expanded the acts that are considered money laundering, and refined the penalties for committing it.

       Money laundering, is defined internationally as “the process by which a person conceals or disguises the identity or the origin of illegally obtained proceeds so that they appear to have originated from legitimate sources.” (“Introduction to the Model Law, Model Legislation on Money Laundering and Financing of Terrorism,” the United Nations Office of Drugs and Crime [UNODC] and the International Monetary Fund [IMF], 2005)

       The illegal act from which the proceeds were obtained is called the “predicate offense”; “Predicate” because it the offense upon which the commission of money-laundering is premised. The term “predicate offense” thus refers to the specific crime (which had been previously committed) the proceeds of which are thereafter made to appear as having come from legal sources; the laundering is the hiding of the illegality of the source.

       The hiding of the proceeds, under traditional criminal law, used to be considered merely part and parcel of the criminal act. The act of disguising or hiding the source of the proceeds of a crime is seen as no more than a logical consequence of guilt. Just as logical as the hiding by a perpetrator of a criminal act of his identity.

       Times have changed. Modern criminal legislation world-wide now considers the hiding of the source of the proceeds of a crime also crime in itself, suitable for punishment as a separate offense. Hence, there are at least two criminal acts that are committed when there is a money-laundering situation: first, the commission of the predicate offense (such as, for instance, kidnapping for ransom) and second, the disguising of the proceeds, e.g. the ransom, so as to make it appear to have been derived through some legal means.

       The original anti-money laundering law, R.A. No. 9160 passed on September 29, 2001, had a list of only 14 predicate offenses or types of offenses. The new list, under the recently passed R.A. No. 10365, has grown to 34.

       Notable new comers are old offenses under the Revised Penal Code, such as bribery, frauds and illegal exactions and transactions, malversation of public funds and property, and forgeries and counterfeiting.

       Crimes under special laws have also been added. Among them are: (a) the financing of terrorism under R.A. No. 10168; (b) the violations of R.A. No. 9208 or the Anti-Trafficking in Persons Act of 2003, of P.D. No. 705, or the Revised Forestry Code, R.A. No. 8550 or the Fisheries Code; R.A. No. 7042, or the Mining Act; R.A. No. 9147 or the Wildlife Resources Conservation and Protection Act, R.A. No. 9072 or the National Caves and Case Resources Management Protection Act, and R.A. No. 6539 or the Anti-Carnapping Act of 2002.

       Also now included are offenses which were refined during the period of the Marcos martial law, such as, those punished by (a) Presidential Decree (PD) No. 1866 , as amended, that codified laws on the illegal/unlawful possession, manufacture, dealing in acquisition or disposition of firearms, ammunitions or explosives; and by (b) PD No. 1612, or the Anti-Fencing law.

       The preferential option of the law for the disadvantaged was very pronounced. Also made “predicate offenses” are violations of R.A. No. 8042 or the Migrant Workers and Overseas Filipinos Act of 1995, as amended by R.A. No. 10022; of R.A. 8293 or the Intellectual Property Code; of R.A. No. 9995, or the Anti-Photo and Video Voyeurism Act of 2009; of R.A. 9775, or the Anti-Child Pornography Act of 2009; of R.A. No. 7610 or the Special Protection of Children against Abuse, /Exploitation and Discrimination.

       But more than the increase in predicate offenses, what must have warmed the heart of the FATF was the expansion in the number of the acts that are to henceforth constitute money-laundering. Section 4, prior to its amendment, considered only the knowing transaction of the monetary instrument or the property representing the proceeds as money-laundering.

       Now money-laundering, according to the amended Section 4, encompasses a whole gamut of other related activities. Money laundering now also embraces the knowing acts of converting, transferring, disposing or moving, acquiring, possessing or even just using of the monetary instrument.

       This variety of commission called for further revision of the punishment based on extent of involvement. Now, the act of money laundering need not be committed in its entirety; lesser degrees of participation are also penalized. Just attempting or conspiring to commit money-laundering puts a participant in jeopardy. Likewise, aiding, abeting, assisting in, or counselling the commission of the crimes makes one susceptible to punishment.

       And it is not just positive acts that are punished. Performing or failing to perform an act resulting in the facilitation of the commission of money-laundering makes one liable too. In fact, failing to report a covered or suspicious transaction, despite knowing full well that such transaction must be reported to the Anti-Money Laundering Council makes one a money-launderer too.

       Finally, the criminal penalties attached to the commission of the crime are made severe enough to make a criminal think twice. Principals are liable to be imprisoned from seven to fourteen years, with a fine of at least twice the value of the monetary instrument or property involved in the offense. Accomplices and accessories are meted out lesser penalties, but nevertheless commensurate to the gravity of their offense. The least penalty, reserved for the mere failure to report when required, is still harsh, imprisonment for six months to four years, or a fine ranging from P100,000 to 500,000, or both.

       With the foregoing indicia of good faith and honest intent to improve the state of our anti-money laundering legislation, not to mention the charm of the members of the Philippine delegation that pleaded our case, how could the FATF not have been considerate once again?