E. Anti-Money Laundering Act of 2001

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“Covered Institution” refers to:

1) Banks, non-banks, quasi-banks, trust entities, and all other institutions and their subsidiaries and affiliates supervised or regulated by the Bangko Sentral ng Pilipinas (BSP);

2) Insurance companies and all other institutions supervised or regulated by the Insurance Commission; and

3) (a) Securities dealers, brokers, salesmen, investment houses and other similar entities managing securities or rendering services as investment agent, advisor, or consultant; (b) Mutual funds, close and investment companies, common trust funds, pre-need companies and other similar entities; (c) Foreign exchange corporations, money changers, money payment, remittance, and transfer companies and other similar entities; and, (d) Other entities administering or otherwise dealing in currency, commodities or financial derivatives based thereon, valuable objects, cash substitutes and other similar monetary instruments or property supervised or regulated by Securities and Exchange Commission. (Section 3[a], R.A. 9160, Anti-Money Laundering Act)

“Covered transaction” is a single, series, or combination of transactions involving a total 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 within five (5) consecutive banking days except those between a covered institution and a person who, at the time of the transaction was a properly identified client and the amount is commensurate with the business or financial capacity of the client; or those with an underlying legal or trade obligation, purpose, origin or economic justification. (Section 3[b], Ibid.)

It likewise refers to a single, series or combination or pattern of unusually large and complex transactions in excess of Four million Philippine pesos (Php4,000,000.00) especially cash deposits and investments having no credible purpose or origin, underlying trade obligation or contract. (Paragraph 2, Section 3[b], Ibid.)

“Monetary Instrument” refers to:

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

2) Srafts, checks and notes;

3) Aecurities 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 marked instruments; and,

4) Other similar instruments where title thereto passes to another by endorsement, assignment or delivery. (Section 3[c], Ibid.)

“Offender” refers to any person who commits a money laundering offense. (Section 3[d], Ibid.)

“Person” refers to any natural or juridical person. (Section 3[e], Ibid.)

“Proceeds” refers to an amount derived or realized from an unlawful activity. (Section 3[f], Ibid.)

“Supervising Authority” refers to the appropriate supervisory or regulatory agency, department or office supervising or regulating the covered institutions enumerated in Section 3(a). (Section 3[g], Ibid.)

“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 institution. (Section 3[h], Ibid.)

“Unlawful activity” refers to any act or omission or series or combination thereof involving or having 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 3, 4, 5, 7, 8 and 9 of Article Two of Republic Act No. 6425, as amended, otherwise known as the Dangerous Drugs Act of 1972;

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;

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

5) Robbery and extortion under Articles 294, 295, 296, 299, 300, 301 and 302 of the Revised Penal Code, as amended;

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;

8) Qualified theft under, Article 310 of the Revised Penal Code, as amended;

9) Swindling under Article 315 of the Revised Penal Code, as amended;

10) Smuggling under Republic Act Nos. 455 and 1937;

11) Violations under Republic Act No. 8792, otherwise known as the Electronic Commerce Act of 2000;

12) Hijacking and other violations under Republic Act No. 6235; destructive arson and murder, as defined under the Revised Penal Code, as amended, including those perpetrated by terrorists against non-combatant persons and similar targets;

13) Fraudulent practices and other violations under Republic Act No. 8799, otherwise known as the Securities Regulation Code of 2000; and,

14) Felonies or offenses of a similar nature that are punishable under the penal laws of other countries. (Section 3[l], Ibid.)

2. Crime

a. Money Laundering Offense

Money laundering is a crime whereby the proceeds of an unlawful activity are transacted, thereby making them appear to have originated from legitimate sources. It is committed by the following:

1) Any person knowing that any monetary instrument or property represents, involves, or relates to the proceeds of any unlawful activity, transacts or attempts to transact said monetary instrument or property.

2) Any person knowing that any monetary instrument or property involves the proceeds of any unlawful activity, performs or fails to perform any act as a result of which he facilitates the offense of money laundering referred to in paragraph (a) above.

3) Any person knowing that any monetary instrument or property is required under the law to be disclosed and filed with the Anti-Money Laundering Council (AMLC), fails to do so. (Section 4, Ibid.)

3. Jurisdiction

The regional trial courts shall have 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. (Section 5, Ibid.)

4. Prosecution of Money Laundering

1) Any person may be charged with and convicted of both the offense of money laundering and the unlawful activity as herein defined.

2) Any proceeding relating to the unlawful activity shall be given precedence over the prosecution of any offense or violation under the law without prejudice to the freezing and other remedies provided. (Section 6, Ibid.)

5. Penalties

1) FOR SECTION 4[A]: Penalties for the Crime of Money Laundering. The penalty of imprisonment ranging from seven (7) to fourteen (14) years and a fine of not less than Three million Philippine pesos (Php 3,000,000.00) 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) of the law.

2) FOR SECTION 4[B]: 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 (Php 1,500,000.00) but not more than Three million Philippine pesos (Php 3,000,000.00), shall be imposed upon a person convicted under Section 4(b) of the law.

3) FOR SECTION 4[C]: The penalty of imprisonment from six (6) months to four (4) years or a fine of not less than One hundred thousand Philippine pesos (Php 100,000.00) but not more than Five hundred thousand Philippine pesos (Php 500,000.00), or both, shall be imposed on a person convicted under Section 4(c) of the law. (Section 14[a], Ibid.)

4) 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 (Php 100,000.00) but not more than Five hundred thousand Philippine pesos (Php 500,000.00), or both, shall be imposed on a person convicted under Section 9(b) of the law. (Section 14[b], Ibid.)

5) MALICIOUS REPORTING: Any person who, with malice, or in bad faith, report 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 (Php 100,000.00) but not more than Five hundred thousand Philippine pesos (Php 500,000.00), at the discretion of the court: Provided, That the offender is not entitled to avail the benefits of the Probation Law. (Section 14[c], Ibid.)

If a juridical person: 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 in the commission of the crime or who shall have knowingly permitted 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. (Paragraph 2, Section 14[c], Ibid.)

Public official/employee: Any public official or employee who is called upon to testify and refuses to do the same or purposely fails to testify shall suffer the same penalties prescribed herein. (Paragraph 3, Section 14[c], Ibid.)

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 (Php 500,000.00) but not more than One million Philippine pesos (Php 1,000,000.00), shall be imposed on a person convicted for a violation under Section 9(c). (Section 14[d], Ibid.)

6. Miscellaneous

System of incentives and rewards: A system of special incentives and rewards is hereby established to be given to the appropriate government agency and its personnel that led and initiated an investigation, prosecution and conviction of persons involved in the offense penalized in Section 4 of the law. (Section 15, Ibid.)

Prohibition against political harassment: The law shall not be used for political prosecution or harassment or as an instrument to hamper competition in trade and commerce. (Section 16, Ibid.)

No case for money laundering may be filed against and no assets shall be frozen, attached or forfeited to the prejudice of a candidate for an electoral office during an election period. (Paragraph 2, Section 16, Ibid.)

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