THE AMLA AMENDMENTS ACT (R.A. No.

10167 entitled, An Act to Further Strengthen the Anti-Money Laundering Law, Amending for the Purpose Sections 10 and 11 of Republic Act No. 9160, otherwise known as the Anti-Money Laundering Act of 2001, as amended, and for other Purposes)

Presented by
Ex ecutive Director, Anti-M oney Laundering Council Secretariat and Assistant Governor, Bangko Sentral ng P ilipinas

Atty. Vicente S. Aquino

Specially for the Global Association of Risk Professionals 22 August 2012 15th Floor, SGV Building 6760 Ayala Avenue, Makati City

The AMLA, as amended:

R.A. No. 9160 took effect on 17 October 2001 R.A. No. 9194 took effect on 23 March 2003 R.A. No. 10167 (An Act to Further Strengthen the AntiMoney Laundering Law, Amending for the Purpose Sections 10 and 11 of Republic Act No. 9160, otherwise known as the Anti-Money Laundering Act of 2001, as amended, and for other Purposes) took effect on 06 July 2012

I. Reasons why R.A. No. 10167 was passed

Financial Action Task Force (FATF) Statements on the Philippines dated 22 October 2010, 25 February 2011, 24 June 2011, 28 October 2011 and 16 February 2012 enhance financial transparency. ensure capacity for competent authorities.

FATF-approved Philippine Action Plan conduct ex parte bank inquiry. Republic vs. Eugenio (G.R. No. 174629, 14 February 2008)

II. Salient Features of R.A. No. 10167

A. EX P AR TE PETITION FOR FREEZE ORDER (Sec. 10 of the AMLA, as amended)

verified. The Court of Appeals should act on the petition within 24 hours from filing. 24-hour periods computation shall exclude the nonworking day. Motion to lift freeze order may be filed. CA must resolve the motion before the expiration of the 20-day original freeze order. Only the Supreme Court shall issue a TRO or a writ of injunction against any freeze order.

Ex parte petition by the AMLC should be

Authority to freeze under R.A. No. 10168 (The Terrorism Financing Prevention and Suppression Act of 2012)
1. Upon its own initiative, or at the ATCs request, the AMLC may issue an ex parte order to freeze without delay property or funds: (a) related in any way to TF or terrorism; or (b) of any person, group of persons, terrorist organization, or association, in relation to whom there is probable cause to believe that they are committing or attempting or conspiring to commit, or participating in or facilitating the commission of financing of terrorism or acts of terrorism.

The Freeze Order

shall be effective for a period not exceeding 20 days, but may be extended for up to 6 months by the CA; 20-day period shall be tolled upon the filing of a petition to extend the effectivity of the freeze order.

2. Consistent with the Philippines international obligations, issue a freeze order with respect to property or funds of a designated organization, association, group or any individual to comply with binding terrorism-related UNSC Resolutions.

The Freeze Order

shall be effective until the basis for the issuance thereof shall have been lifted. Principle of Effective Judicial Protection -within 20 days from issuance of the freeze order, an aggrieved party may file with the CA a petition to determine the basis of the freeze order.

Failure to Comply with the AMLCs Freeze Order (Sec. 16, R.A. No. 10168)

Elements:

(1) There is a freeze order issued by the AMLC which is received by the covered institution/relevant government agency; (2) The covered institution/relevant government agency does not comply with such freeze order by failing immediately to preserve the subject property or funds and to forthwith serve a copy of the notice of the freeze order upon the owner or holder of the property or funds.

Penalty: (1) imprisonment and fineimprisonment from 6 months to 4 years, and a fine of not less than Php100,000 nor more than Php500,000 at the discretion of the court; (2) administrative sanctions on the erring covered institution.

Comparison of the AMLAs old and new provisions on freeze

Prior notice Form Where to file Period within which the CA should act on petition Period of freeze order Remedy of accountholder Old Provision Ex parte No need for verification CA No provision New Provision Ex parte Verified petition CA Within 24 hours from filing of the petition Nonworking day excluded from the computation 20 days unless extended by the CA

Prohibition on TRO Freeze of other accounts

Accountholder may file a motion to lift the freeze order which should be resolved by the CA before the expiration of the 20-day original freeze order No provision Only the SC can issue a TRO/writ of injunction against any freeze order. No provision in the law, Related web of accounts are now referred to but related web of as related accounts but defined under Section accounts may be frozen 11 (Authority to inquire into bank deposits). by the court (as per the RIRRs) in the same petition for the freeze of the principal and identified accounts.

20 days unless extended by the CA No provision

B. EX P AR TE APPLICATION FOR BANK INQUIRY (Sec. 11 of the AMLA, as amended)

Ex parte application for inquiry into bank deposits

or investments, including related accounts, by the AMLC with the CA (used to be with the RTC).

CA shall act on the application within 24 hours from filing. Inclusion of nonworking days computation of the 24-hour period. in the

The term related accounts is defined. Court order ex parte is necessary before the AMLC can inquire into related accounts. The procedure for the ex parte application of (for) a court order for the principal account/s shall be similar to that of the related accounts.

The authority to inquire into the main account/s and the related accounts shall comply with the requirements of Article III, Sections 2 (search warrant) and 3 (privacy of communication and correspondence) of the 1987 Constitution. Related accounts may be frozen.

No court order authorizing inquiry is required in cases involving:

kidnapping for ransom, a narcotics offense and hijacking, destructive arson and murder, and felonies or offenses of a nature similar to the aforesaid which are punishable under the penal laws of other countries; terrorism and conspiracy to commit terrorism as defined and penalized under the Human Security Act (HSA) of 2007; terrorism financing and organizing and directing others to commit terrorism financing (Section 4 of the Terrorism Financing Prevention and Suppression Act of 2012 [R.A. No. 10168]), including being an accomplice/accessory to TF (Section 6 and 7, R.A. No. 10168)

attempt and conspiracy to commit the financing terrorism (Section 5, RA No. 10168), including being an accomplice to conspiracy to commit terrorism financing (Section 6, R.A. No. 10168); attempt and conspiracy to commit dealing with property or funds of designated persons (Section 5, R.A. No. 10168);

BSP may check the compliance of a covered institution with the requirements of the AMLA and its IRRs. Its authority to inquire into any bank deposit or investment was replaced with the authority to check compliance of a covered institution with the AML and IRR requirements. The authority to check compliance is broader.

Authority to inquire under R.A. No. 10168 (The Terrorism Financing Prevention and Suppression Act)
Upon its own initiative, or at the ATCs request, the AMLC may investigate any property or funds: (a) related to terrorism financing or acts of terrorism; (b) of any person or persons in relation to whom there is probable cause to believe that such person or persons are committing or attempting or conspiring to commit or participating in or facilitating terrorism financing or acts of terrorism.

For this purpose, the AMLC is authorized to inquire into or examine deposits and investments with any banking institution or non-bank financial institution and their subsidiaries and affiliates without a court order. (Section 10, R.A. No. 10168)

Comparison of the AMLAs old and new provisions on bank inquiry

Notice to accountholder Cases where court order is not required Old Provision De parte (as per Republic vs. Eugenio) Kidnapping for ransom, a narcotics offense and hijacking, destructive arson and murder New Provision Ex parte (1) kidnapping for ransom, a narcotics offense and hijacking, destructive arson and murder, and felonies or offenses of a nature similar to the aforesaid which are punishable under the penal laws of other countries; and (2) terrorism and conspiracy to commit terrorism as defined and penalized under the Human Security Act (HSA) of 2007.

Period within which No provision the CA should act on petition

Within 24 hours from filing of the petition Nonworking day included in the computation

Power of BSP

BSP may inquire into or examine any deposit or investment with any banking institution or non-bank financial institution when the examination is made in the course of a periodic or special examination, in accordance with the rules of examination of the BSP.

BSP may check compliance of a CI with the requirements of the AMLA and its IRRs in the course of a periodic or special examination.

Inquiry into related No provision, but in practice, accounts AMLC is allowed by courts to inquire into related web of accounts in the order granting the application for bank inquiry on the principal accounts.

AMLC authorized to inquire into related accounts. Related accounts may only be inquired into in a separate application and after order granting the inquiry is obtained. Related accounts should therefore be identified and specified in a separate application. Related accounts was defined under Section 11 (Authority to inquire into bank deposits) The procedure for application for an ex parte order for bank inquiry for the principal account shall be the same with that of the related accounts.

Protection under the Bill of Rights

No provision, but the Bill of Rights (Article III, Sections 2 and 3 of the 1987 Philippine Constitution) is deemed incorporated in the provision.

The authority to inquire/examine shall comply with the provisions of the Constitution on search and seizure and arrest and privacy of communication and correspondence.

III. Reasons why the pending AMLA Amendments Part II (House Bill No. 4275 and Senate Bill No. 3123) must be passed

The 1988 United Nations Convention Against Illicit Traffic in Narcotic Drugs and Psychotropic Substances (1988 Vienna Convention); The 2000 United Nations Convention against Transnational Organized Crime and the Protocols Thereto (2000 Palermo Convention);

FATF Statements on the Philippines dated 22 October 2010, 25 February 2011, 24 June 2011, 28 October 2011, 16 February 2012, and 22 June 2012: Take additional measures to adequately criminalize ML; Further expand provisions regarding confiscation of funds related to money laundering; Extend the coverage of reporting entities.

All that is necessary for the trium ph of evil is that good m en (and good w om en) do nothing.
- Edm und Burk e

Thank you.