Continuation of lecture

Special commercial laws

November 25, 2016

The Anti-money laundering act

Overview of the law
What is money laundering?
How is this done?
What are the steps to curb money laundering?
The AMLA Law provisions- RA 9160 passed on september 29, 2001, amended by RA
9194 (2003), 10167 (2012) and 10365 (Feb 15, 2013)
In the Phil setting, it was addressed thru various bsp circulars but later on in 2001
onwards; the international community thru the financial action task force (FATCA)
directed all countries to pass legislation to prevent money laundering or else these
countries will be tagged as non-cooperator in the fight against money laundering.
Purposes of the law
1. To protect and preserve the integrity and confidentiality of bank accounts
2. To ensure that the Philippines shall not be used as a money laundering site
for the proceeds of any unlawful activity
3. The state shall extend cooperation in transnational investigations and
prosecutions of persons involved in money laundering activities (section 2)
Money laundering offense
-a crime whereby the proceeds of an unlawful activity as defined in the law are
transacted thereby making them appear to have originated from legitimate sources
(section 4)
How is this manifested?
1. Transacting said money instrument or property
2. Conversion, transfer, disposal, acquisition, possession or use of said
monetary instrument or property
3. Concealment or disguise of the true nature, source, location, disposition,
movement, or ownership, of or rights with respect to said monetary
instrument or property
4. Attempt to commit money laundering offense under 1,2 and 3 above
5. Aid, abet or advise the commission of the money laundering offense under
1,2, and 3
6. Performance or failure to perform any act which facilitates the crime of
money laundering
7. Failure to report to the amlac by any covered person with knowledge that a
covered or suspicious transaction has to be reported (amended under RA
10365 Feb 13, 2013)
Who are the persons tasked to report?
Both natural and artificial or juridical persons namely:
1. Banks, non-banks, quasi-banks, trust entities, fx dealers, pawnshops, money
changers, remittance and transfer companies and other similar entities, their
subsidiaries and affiliates supervised or regulated by Bangko Sentral;
2. Insurance companies, pre-need companies supervised or regulated by the
insurance commission;
3.
I. Securities dealers, brokers, salesmen, investment houses or similar
persons managing securities or rendering services as investment agent,
advisor, consultant
II. Mutual funds, close end investment companies, common trust funds and
similar persons; and
III. Treasury brokers dealing in financialderivatives products, commodities
brokers etc
4. Jewelry dealers for amounts exceeding Php 1 million
5. I)Company services providers acting as agents partnership, lawyers handling
formation of companies;
ii) corporate secretary, directors,
iii) agents providing business addresses, correspondence or accommodation,
administrative offices
iv) persons providing services as nominee shareholders of the corporation
6. Persons providing management services to handle clients money, securities,
bank accounts, organization and buying of corporations.

EXCEPT: Lawyers and accountants who render professional advice and who are
bound by clients confidentiality relations provided he/she is allowed to practice
in the Philippines (RA 10365, Feb 15, 2013)
What to report to AMLAC
Section 3B, AMLA
1. Covered Transactions: Transaction in cash within one banking day involving a
total amount of Php 500,000.00 or more;
2. Suspicious transaction- any amount transacted with covered institutions
where any of the following is present:
i) No underlying legal or trade obligation, purpose or economic
justification;
ii) Client is not properly identified;
iii) Amount involved is not commensurate to the financial capacity or
business of the client;
 iv) Taking into account all known circumstances, the clients transaction
appears structured to avoid reporting;
v) Any circumstance which DEVIATES from clients profile of transactions
vi) Transaction is related to an unlawful activity which is about to be, is
being, or has been committed; or
vii) Transaction is similar or analogous to any of the foregoing
circumstance
Define monetary instrument? Under Section 3, c. coins or currency of legal tender;
drafts; securities; notes; negotiable instruments
Unlawful activities under AMLA
Section 3 (l)
RA 19365 Enumerates 34 kinds of felonies as unlawful activities reportable to
AMLAC. Enumerate them.

The Anti Money Laundering Council

Composition : 3 members
1. BSP Governor as Chairperson
2. Insurance Commissioner; and
3. The Chair of the SEC
How will they act?
Unanimous, not by majority rule
Powers:
1. To require covered persons to report
2. To issue orders to comply
3. To institute civil forfeiture proceedings
4. To cause the filing of appropriate AMLA offense by the DOJ or the
Ombudsman
5. To investigate suspicious and covered transactions deemed suspicious
6. To apply with CA for ex parte freeze order
7. To implement such measures as may be deemed necessary and justified to
counter-act money laundering
8. To receive any action from foreign states relative to requests
9. To impose admin sanctions on covered persons for violation of rules
10.To require the land registration commission to report realty transactions of
Php 500,000.00 or more within 15 days from transfer of titles and for register
of deeds to submit documents or transfer (RA 10365)
Secretariat: headed by an executive director for a term of 5 years; lawyer; 35
years old or more
All members must be with prior 5- year experience in SEC, BSP or Insurance
Commission
 AMLA LAW
FCDU Deposits: disputable if to be covered by AMLAC freeze order due to the
enabling acts of 6426 and Unclaimed Balances Act

Foreign Investment Act

RA 7042
1. Policy of the law- to encourage foreign investments in allowed businesses in
the Philippines
2. Definitions
- Foreign investments
- Philippine National
- Doing business in the Philippines
3. Constitutional Prohibitions

Foreign corporations has been defined as one, which owes its existence to the
laws of another state, and generally has no legal existence within another state.
Section 123 of the Corporation Code as one formed, organized and existing
under any laws other than those of the Philippines and whose law allow Filipino
citizens and corporations to do business in the Philippines.

Can a Foreign company invest in the Philippines?

- The Foreign investment act (RA 7042, 1991 amended by RA 8179, 1996)
liberalized the entry of foreign investment into the Philippines. Under the
FIA, foreign investors are generally treated like their domestic
counterparts and must register with the SEC (in case of corporation or
partnership) or with DTIs Bureau of trade regulation and consumers
protection (in case of sole proprietorship)
- With the liberation of the foreign investment law, 100% foreign equity
may be allowed in all areas of investment except those reserved for
Filipinos by mandate of the Philippine Constitution and existing laws.
- Recite the Constitutional Restrictions. What article?
Negative List A
No foreign Equity
1. Mass Media except recording
2. Services involving the practice of licensed professions save in cases prescribed
by law
A. No. 5181]
3. Retail Trade [Republic Act No. 1180]
4. Cooperatives [Chapter III, Article 26 of R. A. No. 6938]
5. Private Security Agencies [Section 4 of R. A. No. 5487]
6. Small-scale Mining [Section 3 of R. A. No. 7076]
7. Utilization of marine resources in archipelagic waters, territorial sea, and
exclusive economic zone [Article XII, Section 2 of the Constitution]
8. Ownership, operation and management of cockpits [Section 5 of Presidential
Decree No. 449]
9. Manufacture, repair, stockpiling and/or distribution of nuclear weapons [Article II,
Section 8 of the Constitution]
10. Manufacture, repair, stockpiling and/or distribution of biological, chemical and
radiological weapons [Various treaties to which the Philippines is a signatory and
conventions supported by the Philippines
11. Manufacture of firecrackers and other pyrotechnic devices
The government recognizes the pivotal role of private sector investments and
thereby commits to continuously enhance the business climate. Foreign
investments are encouraged to fill in capital gaps, help provide employment,
increase production and provide a base for the overall development of the economy.
Credit Information System Act RA 9510 passed into law on October 31,
2008
Only for the basis purpose of determining credit worthiness of a borrower. Access of
credit data except on confidential deposits of bank depositors; release of
information on credit data shall not be released by the accessing entity only with
prior

Ileana Macalinao vs BPI GR no. 175490

September 17, 2009.
Interest and penalty charges for credit card which is at 24%per annum.