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RULES AND REGULATIONS
THE ANTI-MONEY LAUNDERING ACT OF 2001
(Republic Act No. 9160)
POLICY AND APPLICATION
Section 1. Title. - These Rules shall be known and cited as the "Rules and Regulations Implementing Republic Act No. 9160" (the Anti-Money Laundering Act of 2001 [AMLA]).
Sec. 2. Purpose. - These Rules are promulgated to prescribe the procedures and guidelines for the implementation of the AMLA.
Sec. 3. Declaration of Policy. It is the policy of the State that:
(a) The integrity and confidentiality of bank accounts shall be protected and preserved;
(b) The Philippines shall not be used as a money laundering site for the proceeds of any unlawful activity; and
(c) Consistent with its foreign policy, the Philippines shall extend cooperation in transnational investigations and prosecutions of persons involved in money laundering activities wherever committed.
Sec. 4. Definition of Terms. -
(1) Banks, offshore banking units, quasi-banks, trust entities, non-stock savings and loan associations, pawnshops, and all other institutions including their subsidiaries and affiliates supervised and/or regulated by the Bangko Sentral ng Pilipinas (BSP).
A subsidiary means an entity more than fifty percent (50%) of the outstanding voting stock of which is owned by a bank, quasi-bank, trust entity or any other institution supervised or regulated by the BSP.
An affiliate means an entity at least twenty percent (20%) but not exceeding fifty percent (50%) of the voting stock of which is owned by a bank, quasi-bank, trust entity, or any other institution supervised and/or regulated by the BSP.
(2) Insurance companies, insurance agents, insurance brokers, professional reinsurers, reinsurance brokers, holding companies, holding company systems and all other persons and entities supervised and/or regulated by the Insurance Commission (IC).
An insurance company includes those entities authorized to transact insurance business in the Philippines, whether life or non-life and whether domestic, domestically incorporated or branch of a foreign entity. A contract of insurance is an agreement whereby one undertakes for a consideration to indemnify another against loss, damage or liability arising from an unknown or contingent event. Transacting insurance business includes making or proposing to make, as insurer, any insurance contract, or as surety, any contract of suretyship as a vocation and not as merely incidental to any other legitimate business or activity of the surety, doing any kind of business specifically recognized as constituting the doing of an insurance business within the meaning of Presidential Decree (P.D) No. 612, as amended, including a reinsurance business and doing or proposing to do any business in substance equivalent to any of the foregoing in a manner designed to evade the provisions of P.D. No. 612, as amended.
An insurance agent includes any person who solicits or obtains insurance on behalf of any insurance company or transmits for a person other than himself an application for a policy or contract of insurance to or from such company or offers or assumes to act in the negotiation of such insurance.
An insurance broker includes any person who acts or aids in any manner in soliciting, negotiating or procuring the making of any insurance contract or in placing risk or taking out insurance, on behalf of an insured other than himself.
A professional reinsurer includes any person, partnership, association or corporation that transacts solely and exclusively reinsurance business in the Philippines, whether domestic, domestically incorporated or a branch of a foreign entity. A contract of reinsurance is one by which an insurer procures a third person to insure him against loss or liability by reason of such original insurance.
A reinsurance broker includes any person who, not being a duly authorized agent, employee or officer of an insurer in which any reinsurance is effected, acts or aids in any manner in negotiating contracts of reinsurance or placing risks of effecting reinsurance, for any insurance company authorized to do business in the Philippines.
A holding company includes any person who directly or indirectly controls any authorized insurer.
A holding company system includes a holding company together with its controlled insurers and controlled persons.
(3) (i) Securities dealers, brokers, salesmen, associated persons of brokers or dealers, investment houses, investment agents and consultants, trading advisors, and other entities managing securities or rendering similar services, (ii) mutual funds or open-end investment companies, close-end investment companies, common trust funds, pre-need companies or issuers and other similar entities; (iii) foreign exchange corporations, money changers, money payment, remittance, and transfer companies and other similar entities, and (iv) 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/or regulated by the Securities and Exchange Commission (SEC).
A securities broker includes a person engaged in the business of buying and selling securities for the account of others.
A securities dealer includes any person who buys and sells securities for his/her account in the ordinary course of business.
A securities salesman includes a natural person, employed as such or as an agent, by a dealer, issuer or broker to buy and sell securities.
An associated person of a broker or dealer includes an employee thereof who directly exercises control of supervisory authority, but does not include a salesman, or an agent or a person whose functions are solely clerical or ministerial.
An investment house includes an enterprise which engages or purports to engage, whether regularly or on an isolated basis, in the underwriting of securities of another person or enterprise, including securities of the Government and its instrumentalities.
A mutual fund or an open-end investment company includes an investment company which is offering for sale or has outstanding, any redeemable security of which it is the issuer.
A closed-end investment company includes an investment company other than open-end investment company.
A common trust fund includes a fund maintained by an entity authorized to perform trust functions under a written and formally established plan, exclusively for the collective investment and reinvestment of certain money representing participation in the plan received by it in its capacity as trustee, for the purpose of administration, holding or management of such funds and/or properties for the use, benefit or advantage of the trustor or of others known as beneficiaries.
A pre-need company or issuer includes any corporation supervised and/or regulated by the SEC and is authorized or licensed to sell or offer for sale pre-need plans.
A foreign exchange corporation includes any enterprise which engages or purports to engage, whether regularly or on an isolated basis, in the sale and purchase of foreign currency notes and such other foreign-currency denominated non-bank deposit transactions as may be authorized under its articles of incorporation.
An investment agent or consultant or trading advisor includes any person who is engaged in the business of advising others as to the value of any security and the advisability of trading in any security or in the business of issuing reports or making analysis of capital markets. However, in case the issuance of reports or the rendering of the analysis of capital markets is solely incidental to the conduct of the business or profession of banks, trust companies, journalists, reporters, columnists, editors, lawyers, accountants, teachers, and publishers of newspapers and business or financial publications of general and regular circulation, including their employees, they shall not be deemed to be investment agents or consultants or trade advisors within the contemplation of the AMLA and these Rules.
A money changer includes any person in the business of buying or selling foreign currency notes.
A money payment, remittance and transfer company includes any person offering to pay, remit or transfer or transmit money on behalf of any person to another person.
(b) "Customer" refers to any person or entity that keeps an account, or otherwise transacts business, with a covered institution and any person or entity on whose behalf an account is maintained or a transaction is conducted, as well as the beneficiary of said transactions. A customer also includes the beneficiary of a trust, an investment fund, a pension fund or a company or person whose assets are managed by an asset manager, or a grantor of a trust. It includes any insurance policy holder, whether actual or prospective.
(c) "Monetary Instrument" refers to:
(1) Coins or currency of legal tender of the Philippines, or of any other country;
(2) Drafts, checks and notes;
(3) Securities 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 market instruments;
(4) Other similar instruments where title thereto passes to another by endorsement, assignment or delivery; and
(5) Contracts or policies of insurance, life or non-life, and contracts of suretyship.
(d) "Offender" refers to any person who commits a money laundering offense.
(e) "Person" refers to any natural or juridical person.
(f) "Proceeds" refers to an amount derived or realized from an unlawful activity. It includes:
(1) All material results, profits, effects and any amount realized from any unlawful activity;
(2) All monetary, financial or economic means, devices, documents, papers or things used in or having any relation to any unlawful activity; and
(3) All moneys, expenditures, payments, disbursements, costs, outlays, charges, accounts, refunds and other similar items for the financing, operations, and maintenance of any unlawful activity.
(g) "Property" includes any thing or item of value, real or personal, tangible or intangible, or any interest therein or any benefit, privilege, claim or right with respect thereto.
(h) "Supervising Authority" refers to the BSP, the SEC and the IC. Where the SEC supervision applies only to the incorporation of the registered institution, within the limits of the AMLA, the SEC shall have the authority to require and ask assistance from the government agency having regulatory power and/or licensing authority over said covered institution for the implementation and enforcement of the AMLA and these Rules.
(i) "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.
Sec. 5. Limitations of the Rules. -
(a) The provisions of the AMLA and these Rules shall not apply to deposits, investments, and all other accounts of customers with covered institutions that were opened or created prior to the effectivity of the AMLA on October 17, 2001. Hence, no covered transaction reports, investigation and prosecution of money laundering cases, or any other action authorized under the AMLA, may be undertaken with respect to such deposits, investments and accounts as well as transactions or circumstances in relation thereto, that have been completed prior to October 17, 2001. However, the AMLA and these Rules shall apply to all movements of funds respecting such deposits, investments and accounts as well as transactions or circumstances in relation thereto, that are initiated or commenced on or after October 17, 2001.
(b) The AMLA and these Rules shall not be used for political persecution or harassment or as an instrument to hamper competition in trade and commerce.
COMPOSITION AND PROCEEDINGS OF
THE ANTI-MONEY LAUNDERING COUNCIL
Section 1. Composition. The members of the Anti-Money Laundering Council (AMLC) created under the AMLA shall be the Governor of the BSP, the Insurance Commissioner and the Chairman of the SEC. The Governor of the BSP shall be the Chairman.
Sec. 2. Collegiality. The AMLC is a collegial body where the Chairman and the members of the AMLC are entitled to one (1) vote each.
Sec. 3. Unanimous Decision. The AMLC shall act unanimously in discharging its functions as defined in the AMLA and in these Rules. However, in the case of the incapacity, absence or disability of any member to discharge his functions, the officer duly designated or authorized to discharge the functions of the Governor of the BSP, the Chairman of the SEC or the Insurance Commissioner, as the case may be, shall act in his stead in the AMLC.
Sec. 4. Delegation of Authority. Action on routinary administrative matters may be delegated to any member of the AMLC or to any ranking official of the Secretariat under such guidelines as the AMLC may determine.
Sec. 5. Secretariat.
(a) The Secretariat shall be headed by an Executive Director who shall be appointed by the AMLC for a term of five (5) years. He must be a member of the Philippine Bar, at least thirty-five (35) years of age and of good moral character, unquestionable integrity and known probity. He shall be considered a regular employee of the BSP with the rank of Assistant Governor, and shall be entitled to such benefits and subject to such rules and regulations as are applicable to officers of similar rank.
(b) Other than the Executive Director whose qualifications are provided for in the preceding paragraph, in organizing the Secretariat, the AMLC may only choose from among those who have served, continuously or cumulatively, for at least five (5) years in the BSP, the SEC or the IC, but who need not be incumbents therein at the time of their appointment in the Secretariat. All members of the Secretariat shall be considered regular employees of the BSP and shall be entitled to such benefits and subject to such rules and regulations as are applicable to BSP employees of similar rank.
Sec. 6. Detail and Secondment of Personnel. The AMLC is authorized under Section 7 (10) of the AMLA to enlist the assistance of the BSP, the SEC or the IC or any other branch, department, bureau, office, agency or instrumentality of the government, including government-owned and controlled corporations, in undertaking any and all anti-money laundering operations. This includes the use of any member of their personnel who may be detailed or seconded to the AMLC, subject to existing laws and Civil Service Rules and Regulations.
Sec. 7. Confidentiality of Proceedings. The members of the AMLC, the Executive Director, and all the members of the Secretariat, whether permanent, on detail or on secondment, shall not reveal in any manner except under orders of the court, the Congress or any government office or agency authorized by law, or under such conditions as may be prescribed by the AMLC, any information known to them by reason of their office. In case of violation of this provision, the person shall be punished in accordance with the pertinent provisions of R.A. Nos. 3019, 6713 and 7653.
Sec. 8. Meetings. The AMLC shall meet every first Monday of the month or as often as may be necessary at the call of the Chairman. Subject to the rule on confidentiality in the immediately preceding section, the meetings of the AMLC may be conducted through modern technologies such as, but not limited to, teleconferencing and video-conferencing.
Sec. 9. Budget. The budget appropriated by the Congress shall be used to defray operational expenses of the AMLC, including indemnification for legal costs and expenses reasonably incurred for the services of external counsel or in connection with any civil, criminal or administrative action, suit or proceedings to which members of the AMLC and the Executive Director and other members of the Secretariat may be made a party by reason of the performance of their functions or duties.