6 - AMLA Flashcards
What is the definition of money laundering?
Money laundering is the process of making illegally obtained proceeds appear legal.
What are the three stages of money laundering?
Placement, Layering, and Integration.
What is the name of the law that governs or punishes money laundering in the Philippines?
The Anti-Money Laundering Act (AMLA), as amended by RA 9160.
What is the state policy under the AMLA?
To protect and preserve the integrity and confidentiality of bank accounts and to ensure that the Philippines is not used as a money laundering site for unlawful activities.
When is money laundering committed under the AMLA?
When a person:
a. Knows that monetary instruments or property are from unlawful activity and transacts with them
b. Converts, transfers, disposes of, or uses these instruments or property
c. Conceals or disguises their true nature, source, or ownership
d. Attempts or conspires to engage in the above-mentioned activities
e. Aids or abets any of the aforementioned offenses
f. Fails to report a required suspicious transaction to the Anti-Money Laundering Council (AMLC)
Such actions are considered violations under the Anti-Money Laundering Act (AMLA).
What are some unlawful activities defined by the AMLA?
These crimes, among others, are considered unlawful activities under the Anti-Money Laundering Act (AMLA) and may involve the illegal handling, transfer, or concealment of monetary instruments or property. The offenses include:
a. Kidnapping for ransom
b. Qualified theft
c. Robbery and extortion
d. Bribery
e. Malversation of public funds
f. Swindling
g. Forgeries and counterfeiting
h. Piracy
i. Terrorism and financing of terrorism
j. Violations of various laws concerning firearms, drugs, and human trafficking
These offenses are subject to investigation and prosecution, with strict monitoring of financial transactions linked to them.
Who are considered covered persons or institutions under the AMLA?
Entities subject to anti-money laundering regulations include:
a. Entities regulated by the BSP
b. Insurance Commission
c. Securities and Exchange Commission (SEC)
d. Jewelry dealers involved in transactions over ₱1 million
e. Company service providers managing money, securities, or accounts
f. Casinos with cash transactions exceeding ₱5 million
g. Real estate developers for transactions over ₱7.5 million
h. Offshore gaming operators regulated by PAGCOR
Note: Lawyers and accountants are excluded from these regulations due to client information confidentiality rules.
What are the obligations of covered persons/institutions under the AMLA?
The key obligations under anti-money laundering regulations include:
a. Customer identification
b. Record-keeping for 5 years from transactions or account closures
c. Reporting of covered and suspicious transactions to the AMLC within 5 working days (or up to 15 working days as prescribed)
What is the Safe Harbor Provision under the AMLA?
It ensures that reporting of suspicious transactions does not violate bank secrecy laws, and protects individuals from administrative, criminal, or civil actions for making a report in good faith.
What defines a covered transaction under the AMLA?
The following transactions are considered covered transactions:
a. Cash transactions exceeding ₱500,000 within one banking day
b. Jewelry trades over ₱1 million
c. Casino cash transactions over ₱5 million
d. Real estate cash transactions over ₱7.5 million
What constitutes a suspicious transaction under the AMLA?
A suspicious transaction has the following characteristics:
a. No underlying legal obligation or economic justification
b. Improper identification of the client
c. Amounts not consistent with the client’s financial capacity
d. Transactions structured to evade reporting requirements
e. Deviations from a client’s transaction profile
f. Relation to unlawful activities being committed or planned
What is required for customer identification under the AMLA?
Covered persons must verify the identity of their clients to prevent money laundering activities.
How long must records be kept according to the AMLA?
Records must be kept for 5 years from the date of transactions or from the date accounts were closed.
What is the reporting timeline for covered and suspicious transactions?
Reports must be made within 5 working days following the occurrence, unless a different period is specified by the AMLC.
What happens if a covered person fails to report a suspicious transaction?
They may be held liable under the AMLA if they knowingly failed to report a suspicious transaction, which can lead to penalties.
Can transactions related to the financing of terrorism fall under the AMLA’s provisions?
Yes, financing of terrorism is included in the unlawful activities defined under the AMLA.
Are casino cash transactions subject to AMLA reporting requirements?
Yes, casino cash transactions exceeding ₱5 million must be reported under the AMLA.
What does “layering” refer to in money laundering?
Layering involves sending dirty money through various financial transactions to change its form and obscure its traceability.
At which stage does the launderer introduce dirty money into the financial system?
At the “Placement” stage.
What is the purpose of the Anti-Money Laundering Council (AMLC)?
The AMLC is responsible for implementing the provisions of the AMLA, including monitoring suspicious transactions and enforcing the law against money laundering.
What safeguards are in place for individuals reporting suspicious transactions?
Under the Safe Harbor provision, individuals reporting in good faith are protected from legal repercussions.
What are examples of unlawful possession or trafficking offenses included in the AMLA?
Offenses may include illegal possession of firearms and ammunition, drug trafficking, and human trafficking.
How does the AMLA protect against money laundering in financial institutions?
By establishing regulations that require institutions to monitor and report suspicious activities and implement customer identification measures.
If a transaction does not meet a covered transaction threshold, must it still be reported?
While it may not be a “covered transaction,” any suspicious activity must still be assessed and reported if it meets the criteria of a suspicious transaction.
What role do jewelry dealers play under the AMLA?
Jewelry dealers are considered covered persons and must report transactions exceeding ₱1 million.
What does the term “integration” imply in the context of money laundering?
Integration is when the laundered money is reintroduced into the economy in a way that makes it seem like it originates from legitimate sources.
Are there penalties for failure to comply with reporting requirements under the AMLA?
Yes, there are various penalties under the AMLA for non-compliance with reporting obligations.
Do real estate developers have specific reporting requirements under the AMLA?
Yes, they must report cash transactions exceeding ₱7.5 million.
Can covered persons refuse to report due to client confidentiality?
No, under the AMLA, they are mandated to report suspicious transactions regardless of client confidentiality concerns.
What is the relationship between the AMLA and bank secrecy laws?
The AMLA establishes that reporting for suspicious transactions shall not be seen as a violation of bank secrecy laws.
