No. 125 Brgy. San Sebastian
Lipa City, Batangas, Philippines
Mobile
: 0927 283 8234
Telephone
: (043) 723 8412
Gmail
: icarecpareview@gmail.com
Regulatory Framework for Business Transactions
Banking Laws – Supplemental Notes
1. Bangko Sentral ng Pilipinas
A government-owned-and controlled corporation established as an independent central monetary
authority which shall enjoy fiscal and administrative autonomy. It shall provide policy directions in
the areas of money, banking, and credit. It shall have supervision over the operations of banks and
exercise such regulatory powers and other pertinent laws over the operations of finance companies
and non-bank financial institutions performing quasi-banking functions. (Sections 1 and 3 of the
New Central Bank, as amended)
2. Nature of Banking as a business
Banks are entities engaged in the lending of funds obtained in the form of deposits (Section 3.1 of
General Banking Law of 2000 [GBL]).
Elements of banking business:
a. Engaged in the lending of funds obtained in the form of deposits; and
b. Such funds are obtained from the public (20 or more lender rule).
“Quasi-banks" shall refer to entities engaged in the borrowing of funds through the issuance,
endorsement or assignment with recourse or acceptance of deposit substitutes as defined in
Section 95 of Republic Act No. 7653 (hereafter the "New Central Bank Act") for purposes of relending or purchasing of receivables and other obligations. (Section 4.6 of GBL)
3. Authority to Incorporate and Operate
•
That the entity is a stock corporation
•
That its funds are obtained from the public which shall mean twenty or more persons; and
•
That the minimum capital requirements prescribed by the Monetary Board for each category of
banks are satisfied
•
The operations and activities of banks shall be subject to supervision of the Bangko Sentral ng
Pilipinas
4. Degree of Care
•
Banks are expected to observe (as a fiduciary duty) the highest degree of care (extraordinary
diligence) in the conduct of their business since it is impressed with public interest. Banks are
required to exercise the highest standards of integrity and performance.
5. Classification of Banks
•
(a) Universal banks – a commercial bank that has the power of an investment house and the
power to invest in the equity of allied and non-allied enterprises;
•
(b) Commercial banks -accepts drafts, issued letters of credit, discount and negotiate
promissory notes, bills of exchange, accept or creates demand deposits, received deposit
substitutes, buy and sell foreign exchange or gold/silver bullions, extend credit as approved by
the Monetary Board, and etc. (do not have the power of an investment house and can only
invest in equity of allied enterprises);
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RLACO/DSALES/NVALDERAMA
No. 125 Brgy. San Sebastian
Lipa City, Batangas, Philippines
Mobile
: 0927 283 8234
Telephone
: (043) 723 8412
Gmail
: icarecpareview@gmail.com
•
(c) Thrift banks, composed of: (i) Savings and mortgage banks, (ii) Stock savings and loan
associations, and (iii) Private development banks – established as savings and mortgage bank,
a stock savings and loan association for the purpose of accumulating such deposits and
investing it real estate and insured improvements, loans for personal or household finance,
financing for homebuilding and home development, in commercial papers, and to provide short
term working capital and medium and long term financing;
•
(d) Rural banks, as defined in Republic Act No. 7652 (hereafter referred to as the “Rural Banks
Act” – established to provide credit facilities to farmers and merchants or their cooperatives
and in general, to the people of the rural communities;
•
(e) Cooperative banks, as defined in Republic Act No 6938 (hereafter the "Cooperative Code")
– to provide financial and credit services to cooperatives;
•
(f) Islamic banks as defined in Republic Act No. 6848, otherwise known as the "Charter of Al
Amanah Islamic Investment Bank of the Philippines"; and
•
(g) Other classifications of banks as determined by the Monetary Board of the Bangko Sentral
ng Pilipinas.
▪
Distinctions:
❖ Capitalization requirement that may vary
❖ Purpose: Some banks have specific purpose and social functions
❖ Governing law – varies (General Banking Law and other special laws)
6. Functions:
a. Loan
To grant loans and other credit accommodations only in amounts and for the periods of time
essential for the effective completion of the operations to be financed.
b. Deposit
It allows the bank to receive money from the public with the obligation of safely keeping it, and
returning the same. Fixed, savings, and current deposits of money in banks and similar institutions
shall be governed by the provisions concerning simple loan (Article 1980 of the Civil Code)
7. PDIC Law
Basic Policy: promote and safeguard the interests of the depositing public by way of providing
permanent and continuing insurance coverage on all insured deposits.
•
Philippine Deposit Insurance Corporation (PDIC)
PDIC is a government instrumentality created by law to insure the deposits of all banks which are
entitled to the benefits of insurance. In fact, the latest amendments empowered PDIC with stronger
authorities to protect the depositing public.
PDIC insurance covers only the risk of a bank closure ordered by Monetary Board (MB) of BSP.
Insurance premium is paid by the bank and not the depositors.
PDIC is the designated receiver in the case of a bank closure. Upon appointment pursuant to
statutory grounds, the MB of BSP shall direct PDIC to proceed with the liquidation of the closed
bank pursuant to the New Central Bank Act, as amended, and R.A. No. 3591, as amended.
Principal functions are (a) deposit insurer; (b) co-regulator of banks; and (c) receiver and liquidator
of closed banks.
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RLACO/DSALES/NVALDERAMA
No. 125 Brgy. San Sebastian
Lipa City, Batangas, Philippines
•
Mobile
: 0927 283 8234
Telephone
: (043) 723 8412
Gmail
: icarecpareview@gmail.com
Deposit and Insured Deposits
The term deposit means the unpaid balance of money or its equivalent received by a bank in the
usual course of business and for which it has given or is obliged to give credit to an account
(savings, deposit, etc) or other evidence of deposit issued in accordance with BSP’s rules and
regulations
The term insured deposits means the amount due to any bona fide depositor for legitimate deposits
in an insured bank net of any obligation of the depositor to the insured bank as of date of closure
but not to exceed P500,000
Note: In case of a condition that threatens the monetary and financial stability of the banking system
that may have systemic consequences as determined by the MB, the maximum deposit insurance
cover may be adjusted in such amount, for such a period, and/or for such deposit products, as may
be determined by a unanimous vote of the Board of Directors in a meeting called for the purpose
and chaired by the DOF Secretary, subject to the approval of the President of the Philippines.
(Under Section 22 of the PDIC Charter, a systemic risk refers to the possibility of failure of one
bank to settle net transactions with other banks will trigger a chain reaction, depriving other banks
of funds leading to a general shutdown of normal clearing and settlement activity. It also means the
likelihood of a sudden, unexpected collapse of confidence in a significant portion of the banking or
financial system with potentially large real economic effects.)
Deposit accounts not entitled to payment:
MEMAID: E500-Out-BTS-Dep-FFUUUn-SPLIT
•
•
The amount in excess of insured deposit of P500,000
Deposit that is payable in a place outside the Philippines (foreign branches)
• NOTE (from FAQs of PDIC website): The PDIC Charter provides that a Philippine bank
may elect to insure with the PDIC its deposits in branches outside the Philippines. As
of 20 April 2021, no Philippine bank has elected to insure deposits in their foreign
branches with PDIC.
•
Investment products such as Bonds and Securities, Trust accounts, and other similar
instruments
Deposit accounts or transactions which
• ARE UNFOUNDED OR THAT ARE FICTITIOUS OR FRAUDULENT
•
CONSTITUTES AND OR EMANATING FROM UNSAFE AND UNSOUND BANKING
PRACTICE
• ARE DETERMINED TO BE THE PROCEEDS OF UNLAWFUL ACTIVITY AS
DEFINED UNDER AMLA LAW
• RESULTED FROM SPLITTING OF DEPOSITS
•
•
Deposit products or money placements by the head office of a foreign bank in its branch in the
Philippines. Said branch entity is considered as part of one and the same juridical entity to its
head office. Thus, not covered since it is payable outside the Philippines.
•
NOTES: Inter-branch deposits are also not covered by deposit insurance. The same
refers to funds of one branch or the Head Office of a bank in another branch.
•
SPLITTING OF DEPOSITS (criminal act)
•
Occurs when a deposit account with an outstanding balance of more than P500,000 is broken
down and transferred to 2 or more accounts in the name of persons or entities who have no
beneficial ownership (the “dummy-transferee”) in the transferred deposits in their names
•
Made within 120 days immediately preceding or during a bank declared holiday (e.g., suspends
payment of deposit liabilities continuously for > 30 days) or immediately preceding a closure
order issued by MB for the purpose of availing the maximum deposit insurance coverage
3|P a g e
RLACO/DSALES/NVALDERAMA
No. 125 Brgy. San Sebastian
Lipa City, Batangas, Philippines
Mobile
: 0927 283 8234
Telephone
: (043) 723 8412
Gmail
: icarecpareview@gmail.com
Determination of Amount Due (Per Bank/ Per Depositor, and Per Capacity Rule)
•
•
•
Per bank: entitlement to deposit insurance is on a per bank basis.
Per depositor, Per capacity rule: all deposits in the bank maintained in his own name or in the
name of others (ultimately for his own benefit: In trust for or For the account of) shall be added
together in determining the insured amount regardless of type of account.
Joint accounts regardless of conjunction shall be insured separately from individual accounts
Claims
•
•
•
Depositors have two (2) years from PDIC's takeover of the closed bank to file their deposit
insurance claims.
However, should the depositor fail to file within the said period, the claim may be filed with the
Liquidator of the closed bank within 60 days from publication of notice of closure (payment will
depend on the bank’s available assets and approval of Liquidation court).
Claims should be settled within 6 months from date of filing with complete requirements
WHO ARE REQUIRED TO FILE DEPOSIT INSURANCE CLAIMS?
•
•
•
•
•
•
With valid deposit accounts with balances of more than P100,000.00;
With outstanding obligations with the closed bank either as borrower, co-maker, or as spouse
of borrower;
With incomplete mailing address found in the bank records, or failed to update them through
the Mailing Address Update Form (MAUF) issued by the PDIC;
With accounts maintained under the name of business entities
With accounts not eligible for early payment, regardless of type of account and account balance
per advice of PDIC
Who are deceased whose filing of claim is thru the legal heirs.
WHO ARE NOT REQUIRED TO FILE DEPOSIT INSURANCE CLAIMS?
•
Depositors with valid deposit accounts with balances of P100,000.00 and below are not
required to file claims, provided they:
(1) have no obligations with the closed bank, or have not acted as co-makers of these obligations,
or are not spouses of the borrowers;
(2) have complete mailing address found in the bank records or have updated their addresses
through the MAUF of PDIC before the start of the onsite claims settlement operation; and
(3) have not maintained the account under the name of business entities
WHAT ARE THE REQUIREMENTS IN FILING CLAIMS?
•
Original evidence of deposit (passbook, certificate of time deposit, bank statement, ATM card,
etc)
•
Valid original identification document with clear signature of depositor/claimant
•
Birth certificate for depositors below 18 years of age
•
Notarized Special Power of Attorney for claimants that are not signatories in the bank records
or for minors
•
Claim form
4|P a g e
RLACO/DSALES/NVALDERAMA
No. 125 Brgy. San Sebastian
Lipa City, Batangas, Philippines
Mobile
: 0927 283 8234
Telephone
: (043) 723 8412
Gmail
: icarecpareview@gmail.com
8. Bank Secrecy Law (RA 1405, as amended)
Secrecy and Bank Deposits: General Rule
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 (local
government units), instrumentalities, and trust funds or any sum of money invested in the bank
which may be used for loans or similar transactions are considered ABSOLUTELY
CONFIDENTIAL and may not be examined, inquired or looked into by any person, government
official, bureau or office.
Secrecy and Bank Deposits: Exceptions
1. Written permission of the depositor/investor (with waiver: DOSRI accounts or taxpayer applying
for a compromise of tax liability on account of financial incapacity).
2. Impeachment cases.
3. Upon order of competent court in cases:
•
•
•
BRIBERY/ OR DERELICTION OF DUTY OF PUBLIC OFFICIALS
THE MONEY DEPOSITED/INVESTED IS SUBJECT OF LITIGATION (premise on
the fact that the money deposited in the account is itself the subject matter of
the action)
PROSECUTION INVOLVING UNEXPLAINED WEALTH AND PROSECUTION FOR
VIOLATION OF THE ANTI-GRAFT AND CORRUPT PRACTICES ACT
4. Upon inquiry by CIR for the purpose of determining net estate of decedent-depositor for estate
tax purposes.
5. Upon order of competent court (Court of Appeals) in proper cases by the AMLC where there is
PROBABLE CAUSE (conviction not required) of money laundering (deposits or investments are
related to unlawful activity) and in some cases even without court order (Section 11 of RA 9160,
as amended).
Note: AMLC cannot order a bank to inquire into the bank account of any depositor on mere
suspicion of acts of graft and bribery without depositor’s written consent or a bank inquiry issued
by a competent court
6. Disclosure to the Treasurer for dormant deposits for at least 10 years under Unclaimed Balances
law.
7. Report of banks to AMLC of covered/suspicious transactions.
8. Upon written order of CA examination by law enforcement officers in terrorism cases.
9. Power of the Ombudsman in certain cases against government officials pending in court.
Otherwise, if no pending case, the criminal investigation of the Ombudsman via examination of
bank account is premature (Marquez vs Desierto G.R. No. 135882 dated June 27, 2001)
10. Inquiry of PDIC and/or BSP in case there is a finding of unsafe and unsound banking practices.
Foreign Currency Deposits under Foreign Currency Deposit Act
•
Covered by the law on secrecy of bank deposits except upon written permission of the
depositor
•
Exempt from attachment, garnishment, or any other order or process of any court, legislative
body, government agency, or administrative body.
5|P a g e
RLACO/DSALES/NVALDERAMA
No. 125 Brgy. San Sebastian
Lipa City, Batangas, Philippines
Mobile
: 0927 283 8234
Telephone
: (043) 723 8412
Gmail
: icarecpareview@gmail.com
9. Truth in Lending Act
State Policy
To protect its citizens from a lack of awareness of the true cost of credit by assuring a full disclosure
of such cost with a view of preventing the uninformed use of credit.
Importance: (MEMORY AID – TAP)
- Truth and transparency in lending (Loan Price)
- Allow a debtor to evaluate the real cost of borrowing
- Protect debtor from the effects of misrepresentation/concealment
Covered Persons
•
Banks
•
Non-bank financial institutions under BSP supervision (i.e., foreign exchange dealers,
pawnshops, money changers, remittance and transfer companies)
•
Other credit-granting institutions under SEC, IC, and CDA (i.e., Securities dealers, brokers,
salesmen, investment houses, mutual and trust funds, insurance and pre-need companies)
How to prevent lack of awareness of the true cost of credit?
Lender shall provide a disclosure statement as a required attachment to a loan contract with the
following minimum information:
1. Loan amount
2. Finance charges and all other charges
3. Net proceeds of the loan
4. Schedule of payments (i.e., single or installments)
5. Percentage that the finance charge bears to the loan amount expressed as a simple annual
rate on the outstanding unpaid balance of the obligation (Effective Interest Rate).
Excluded Transactions
•
•
Credit transactions which do not involve the payment of any finance charge by the debtor, and
Credit transactions which the debtor is the one specifying a definite and fixed set of credit
terms such as bank deposits, insurance contracts, safe of bonds, etc.
Consequences of non-compliance by Lender with its obligation
Civil liability of Lender for failure to disclose information:
P100 or in an amount equal to twice the finance charged required by such creditor, whichever is
the greater, but to not exceed P2,000 on any credit transaction
Prescriptive period - action to recover such penalty may be brought within one year from the date
of the occurrence of the violation, in any court of competent jurisdiction
6|P a g e
RLACO/DSALES/NVALDERAMA
No. 125 Brgy. San Sebastian
Lipa City, Batangas, Philippines
Mobile
: 0927 283 8234
Telephone
: (043) 723 8412
Gmail
: icarecpareview@gmail.com
Criminal liability for violation of TILA provisions
Any person who willfully violates any provision of this Act or any regulation issued thereunder shall
be fined or imprisoned for not less than six (6) months, nor more than one (1) year or both.
10. Anti-Money Laundering Act (RA 9160, as amended by RA 9194)
How committed:
1. Any person knowing that any monetary instrument or property represents, involves or relates
to, the proceeds of any unlawful activity:
a. Transacts said money instrument or property;
b. Converts, transfers, disposes of, moves, acquires, possesses or uses said monetary
instrument or property;
c. Conceals or disguises the true nature, source, location, disposition, movement or
ownership of or rights with respect to said monetary instrument or property;
d. Attempts or conspires to commit money laundering offenses referred to in (a), (b) or
(c);
e. Aids, abets, assists in or counsels the commission of the money laundering offenses
referred to in (a), (b) or (c); and
f. performs or fails to perform any act as a result of which he facilitates the offense of
money laundering referred to in (a), (b) or (c).
2. By any covered person who knowing that a covered or suspicious transaction is required under
the law to be reported to the AMLC, fails to do so.
Prevention of Money Laundering (obligations of covered institutions/persons)
a. Customer identification
Covered persons shall establish and record the true identity of its clients based on official
documents.
b. Record keeping
All records of all transactions shall be maintained and safely stored for 5 years.
c.
Reporting of covered and suspicious transactions
Covered persons to report to AMLC all covered and suspicious transactions.
Covered Transaction: a transaction in cash or other equivalent monetary instrument involving a
total amount in excess of P500,000.00 (P1M in cases of jewelry dealers, dealers in precious metals
and stones) within one banking day; for covered persons like casinos, a single casino cash
transaction (involving the receipt of cash by a casino paid by or behalf of a customer or payout of
cash by a casino to a customer or to any person in his/her behalf) involving an amount in excess
of P5,000,000 or its equivalent in any other currency.
For real estate brokers and developers, a single cash transaction involving an amount in excess of
P7,500,000 or its equivalent in any other currency.
Covered Persons: (natural or juridical)
1. Banks, non-banks, quasi-banks, trust entities, foreign exchange dealers, pawnshops, money
changers, remittance and transfer companies and other similar entities and other similar
entities and all other persons and their subsidiaries and affiliates supervised or regulated by
the BSP;
2. Insurance companies, pre-need companies and other persons supervised or regulated by the
Insurance Commission;
7|P a g e
RLACO/DSALES/NVALDERAMA
No. 125 Brgy. San Sebastian
Lipa City, Batangas, Philippines
Mobile
: 0927 283 8234
Telephone
: (043) 723 8412
Gmail
: icarecpareview@gmail.com
3. (i) Securities dealers, brokers, salesmen, investment houses and other similar persons
managing securities or rendering services as investment agent, advisor, or consultant, (ii)
mutual funds, close-end investment companies, common trust funds, and other similar
persons, and (iii) 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 and regulated by SEC;
4. Jewelry dealers in precious stones/metals, who, as a business, trade in precious stones/metals,
for transactions in excess of P1,000,000;
5. Company service provides which, as a business, provide any of the following services to third
parties: (i) acting as a formation agent of juridical persons; (ii) acting as (or arranging for another
person to act as ) a director or corporate secretary of a company, a partner of a partnership, or
a similar position in relation to other juridical persons; (iii) providing a registered office, business
address or accommodation, correspondence or administrative address for a company, a
partnership or any other legal person or arrangement; and (iv) acting as (or arranging for
another person to act as) a nominee shareholder for another person;
6. Persons who provide any of the following services:
a. Managing of client money, securities or other assets;
b. Management of bank, savings or security accounts;
c. Organization of contributions for the creation, operation or management of companies;
and
d. Creation, operation or management of juridical persons or arrangements, and buying
and selling business entities.
7. Casinos, including internet and ship-based casinos, with respect to their casino cash
transactions related to their gaming operations
8. Real estate developers and brokers
9. Offshore gaming operation, as well as their service providers, supervised, accredited or
regulated by the Philippine Amusement and Gaming Corporation (PAGCOR) or any
government agency;
10. Land Registration Authority and all of its Register of Deeds on real estate transaction with price
exceeding P500,000
Excluded Persons: lawyers and accountants acting as independent legal professionals in relation
to information concerning their clients or where disclosure of information would compromise client
confidences or the attorney-client relationship
Obligations of covered institutions:
1. Customer identification: Covered persons shall establish and record the true identity of its
clients based on official documents.
2. Record keeping: All records of all transactions of covered institutions shall be maintained and
safely stored for 5 years from the date of transactions.
3. Reporting of covered and suspicious transactions: Covered persons shall report to the AMLC
all covered transactions and suspicious transactions within 5 working days from occurrence
thereof, unless the AMLC concerned prescribes a different period not exceeding 15 working
days.
4. Should a transaction be determined to be both a covered and a suspicious transaction, it shall
be reported as a suspicious transaction.
5. When reporting, it shall not be considered a violation of bank secrecy laws and similar laws. It
shall be prohibited from communicating, directly or indirectly, in any manner or by any means,
to any person the fact that a covered or suspicious transaction report was made, the content
thereof, or any other information in relation thereto.
NOTE: Safe Harbor: No administrative, criminal, or civil proceedings, shall lie against any person
for having made a transaction report in the regular performance of his duties and in good faith,
whether or not such results in any criminal prosecution.
Suspicious Transaction: transactions with covered institutions, regardless of the amount involved,
where any of the following circumstances exist:
1.
2.
3.
4.
8|P a g e
There is no underlying legal or trade obligation, purpose or economic justification
The client is not properly identified
The amount involved is not commensurate with the business or financial capacity of the client
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
RLACO/DSALES/NVALDERAMA
No. 125 Brgy. San Sebastian
Lipa City, Batangas, Philippines
Mobile
: 0927 283 8234
Telephone
: (043) 723 8412
Gmail
: icarecpareview@gmail.com
5. Any circumstances 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
6. 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
7. Any transaction that is similar or analogous to any of the foregoing
Unlawful activities: Any act or omission or series or combination thereof involving or having relation to
the following (Predicate Crimes):
1. Kidnapping for ransom under Article 267 of RPC – (e.g., if kidnapper will deposit the ransom
money with a bank to make it appear it originated from legitimate sources, the crime of money
laundering is committed)
2. Sections 4, 5, 7, 8, 9, 10, 12, 13, 14, 15 and 16 of Comprehensive Dangerous Drugs Act (RA
9165)
a. Importation of prohibited drugs
b. Sale of prohibited drugs
c. Administration of prohibited drugs
d. Distribution of prohibited drugs
e. Transportation of prohibited drugs
f. Maintenance of a den, dive, or resort for prohibited users
g. Manufacture of prohibited drugs
h. Possession of prohibited drugs
i. Use of prohibited drugs
j. Cultivation of plants which are sources of prohibited drugs
k. Culture of plants which are sources of prohibited drugs
3. Section 3, paragraphs B, C E, G, H and I of RA 3019
a. Directly or indirectly requesting or receiving any gift, present, share, percentage, or
benefit for himself or for any other person in connection with contract or transaction
between the Government and any party, wherein the public officer in his official
capacity has to intervene under the law
b. Directly or indirectly requesting or receiving any gift, present, or other pecuniary or
material benefit, for himself or for another, from any person for whom the public officer,
in any manner or capacity, has secured or obtained, or will secure or obtain, any
government permit or license, in consideration for the help given or to be given
c. Causing any undue injury to any party, including the government, or giving any private
party any unwarranted benefits, advantage, or preference in the discharge of his
official, administrative, or judicial functions through manifest partiality, evident bad
faith, or gross inexcusable negligence
d. Entering, on behalf of the government, into any contract or transaction manifestly and
grossly disadvantageous to the same, whether or not the public officer profited or will
profit thereby
e. Directly or indirectly having financial or pecuniary interest in any business contract or
transaction in connection with which he intervenes or takes part in his official capacity,
or in which he is prohibited by the Constitution or by any law from having any interest
f. Directly or indirectly becoming interested, for personal gain, or having material interest
in any transaction or act requiring the approval of a board, panel, or group of which he
is a member, and which exercise of discretion in such approval, even if he votes
against the same or he does not participate in the action of the board, committee,
panel, group
4. Plunder under RA 7080
5. Robbery and extortion under Articles 294, 295, 296, 299, 300, 301 and 302 of RPC
a. Robbery with violence or intimidation of persons
b. Robbery with physical injuries, committed in an uninhabited place and by a band, or
with use of firearms on a street, road, or alley
c. Robbery in an uninhabited house or public building or edifice devoted to worship
6. Jueteng and masiao under PD 1602
7. Piracy on the high seas under RPC and PD 532
a. Piracy on the high seas
b. Piracy in inland Philippine waters
c. Aiding and abetting pirates and brigands
8. Qualified theft under Article 310 of RPC
9. Swindling under Article 315 of RPC
10. Smuggling under RA 455 and RA 1937
11. Violations of Electronic Commerce Act (RA 8792)
12. Hijacking and other violations under RA 6235
13. Destructive arson and murder as defined under RPC
14. Terrorism and conspiracy to commit terrorism under Sections 3 and 4 of RA 9372
9|P a g e
RLACO/DSALES/NVALDERAMA
No. 125 Brgy. San Sebastian
Lipa City, Batangas, Philippines
Mobile
: 0927 283 8234
Telephone
: (043) 723 8412
Gmail
: icarecpareview@gmail.com
15. Financing terrorism under Section 4 and offenses punishable under Sections 5, 6, 7, and 8 of
RA 10168
16. Bribery under Articles 210, 211 and 211-A of RPC and corruption of public officers under Article
212 of RPC
17. Frauds and illegal exactions and transactions under Articles 213, 214, 215 and 216 of RPC
18. Malversation of public funds and property under Articles 217 and 222 of RPC
19. Forgeries and counterfeiting under Articles 163, 166, 167, 168, 169 and 176 of RPC
20. Violations of Sections 4, 5 and 6 of RA 9208 (Anti-Trafficking in Persons Act)
21. Violations of Sections 86 to 106 of Chapter VI of RA 8550 (Philippine Fisheries Code)
22. Violations of Sections 101 to 107 and 110 of RA 7942 (Philippine Mining Act)
23. Violations of Section 27(c), (e), (f), (g) and (i) of RA 9147 (Wildlife Resources Conservation and
Protection Act)
24. Violation of Section 7(b) of RA 9072 (National Caves and Cave Resources Management
Protection Act)
25. Violation of RA 6539 (Anti-Carnapping Act)
26. Violations of Section 1, 3 and 5 of PD 1866 (Illegal/Unlawful Possession of Firearms and
Explosives)
27. Violation of PD 1612 (Anti-Fencing Law)
28. Violation of Section 6 of RA 8042 (Migrant Workers Act)
29. Violation of RA 8293 (Intellectual Property Code)
30. Violation of Section 4 of RA 9995 (Anti-Photo and Video Voyeurism Act)
31. Violation of Section 4 of RA 9775 (Anti-Child Pornography Act)
32. Violations of Sections 5, 6, 7, 8, 9, 10(c), (d) and €, 11, 12 and 14 of RA 7610 (Special
Protection of Children)
33. Fraudulent practices and other violations under RA 8799 (Securities Regulation Code)
34. Violation of Section 9 (a)(3) of Republic Act No. 10697, otherwise known as the "Strategic
Trade Management Act", in relation to the proliferation of weapons of mass destruction and its
financing pursuant to United Nations Security Council Resolution Numbers 1718 of 2006 and
2231 of 2015"
35. Violation of Section 254 of Chapter II, Title X of the National Internal Revenue Code of 1997,
as amended, where the deficiency basic tax due in the final assessment is in excess of Twentyfive million pesos (P25,000,000.00) per taxable year, for each tax type covered and there has
been a finding of probable cause by the competent authority: Provided, further, That there must
be a finding of fraud, willful misrepresenting or malicious intent on the part of the taxpayer:
Provided, finally, That in no case shall the AMLC institute forfeiture proceedings to recover
monetary instruments, property or proceeds representing, involving, or relating to a tax crime,
if the same has already been recovered or collected by the Bureau of Internal Revenue (BIR)
in a separate proceeding
36. Felonies or offenses of a similar nature that are punishable under the penal laws of other
countries
Functions of AMLC as the government agency tasked to carry out the implementation of the AMLA:
1. To require and receive covered transaction reports from covered institutions
2. To issue orders addressed to the appropriate Supervising Authority or the covered institution
to determine the true identity of any monetary instrument or property subject of a covered
transaction report or request for assistance from a foreign State, or believed by the Council, on
the basis of substantial evidence to be in whole or in part, whenever located, representing,
involving or related to, directly or indirectly, in any manner or by any means, the proceeds of
an unlawful activity
3. To institute civil forfeiture proceedings and all other remedial proceedings through the OSG
4. To cause the filing of complaints with the DOJ or Ombudsman for the prosecution of money
laundering offenses
5. To initiate investigations of covered transactions, money laundering activities and other
violations of RA 9160
6. To freeze any monetary instrument or property alleged to be proceeds of any unlawful activity
7. To implement such measures as may be necessary and justified under RA 9160 to counteract
money laundering
8. To receive and take action in respect of, any request from foreign states for assistance in their
own anti-money laundering operations provided in RA 9160
9. 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
10. To enlist the assistance of any branch, department, bureau, office, agency or instrumentality of
the government, including GOCCs, in undertaking any and all anti-money laundering
operations, which may include the use of its personnel, facilities and resources for the more
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RLACO/DSALES/NVALDERAMA
No. 125 Brgy. San Sebastian
Lipa City, Batangas, Philippines
Mobile
: 0927 283 8234
Telephone
: (043) 723 8412
Gmail
: icarecpareview@gmail.com
resolute prevention, detection and investigation of money laundering offenses and prosecution
of offenders.
11. To impose administrative sanctions for the violation of laws, rules, regulations, orders, and
resolutions issued pursuant to law
Freeze order (FO) – 20 days unless extended by court for a period not exceeding 6 months
A freeze order is an extraordinary and interim relief issued by the Court of Appeals to prevent
dissipation, removal, or disposal of properties that are suspected to be the proceeds of, or related
to, unlawful activities as defined in the AMLA. Primary objective is to temporarily preserve monetary
instruments or property that are in any way related to an unlawful activity or money laundering by
preventing the owner from utilizing them during the duration of the freeze order.
Probable Cause
The probable cause required for the issuance of a freeze order refers to such facts and
circumstances which would lead a reasonably discreet, prudent or cautious man to believe an
unlawful activity and/or a monetary instrument is about to be, is being or has been committed.
Process for issuance of FO
The CA, upon application ex parte by AMLC and after determination that probable cause exists
that any monetary instrument or property is in any way related to an unlawful activity, may issue a
freeze order which shall be effective immediately (for a period of 20 days unless extended by the
court upon application by the AMLC; total period shall not exceed 6 months).
Note: Considering the intricate and diverse web of related and interlocking accounts pertaining to
the monetary instruments or properties that any person may create in the different covered
institutions, their branches and/or other units, AMLC may apply to freeze monetary instruments or
properties in the names of the reported owners/holders, and monetary instruments or properties
named in the application of the AMLC, including all other related web of accounts pertaining to
other monetary instruments and properties, the funds and sources of which originated from or are
related to the monetary instruments or properties subject of the freeze orders.
Related Web of Accounts: those accounts, the funds and sources of which originated from and/or
are materially linked to the monetary instruments or properties subject of the freeze orders.
Authority to inquire into bank deposits: The AMLC may inquire into deposits upon order of the court
when there is probable cause that the deposits are related to the crime or unlawful activities.
Can the AMLC issue a freeze order?
Yes, for purposes of implementing targeted financial sanctions in relation to proliferation of
weapons of mass destruction and its financing, as provided under Section 3(15), the AMLC shall
have the power to issue, ex porte, an order to freeze without delay.
The freeze order shall be effective until the basis for its issuance shall have been lifted. During the
effectivity of the freeze order, the aggrieved party may, within twenty (20) days from issuance, file
with the Court of Appeals a petition to determine the basis of the freeze order according to the
principle of effective judicial protection: Provided, That the person whose property or funds have
been frozen may withdraw such sums as the AMLC determines to be reasonably needed for
monthly family needs and sustenance including the services of counsel and the family medical
needs of such person.
"The AMLC, if circumstance warrant, may initiate civil forfeiture proceedings to preserve the assets
and to protect it from dissipation.ℒαwρhi৷ No court shall issue a temporary restraining order or a
writ of injunction against the freeze order, except the Court of Appeals or the Supreme Court
(Section 10, as amended by R.A. No. 11521).
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RLACO/DSALES/NVALDERAMA
No. 125 Brgy. San Sebastian
Lipa City, Batangas, Philippines
Mobile
: 0927 283 8234
Telephone
: (043) 723 8412
Gmail
: icarecpareview@gmail.com
However, a court order is not even necessary when the offense or unlawful activity involved is
any of the following:
1. Kidnapping for ransom under Article 267 of RPC
2. Sections 4, 5, 7, 8, 9, 10, 12, 13, 14, 15 and 16 of Comprehensive Dangerous Drugs Act (RA
9165)
3. Hijacking and other violations under RA 6235 and Destructive arson and murder as defined
under RPC
4. Felonies or offenses of a nature similar to (1), (2), (3) and (4) which are punishable under the
penal laws of other countries
5. Terrorism and conspiracy to commit terrorism under RA 9372
6. Financing terrorism under Section 4 and offenses punishable under Sections 5, 6, 7, and 8 of
RA 10168
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RLACO/DSALES/NVALDERAMA