Republic of the Philippines
HOUSE OF REPRESENTATIVES
Quezon City

8

&

2M

FIFTEENTH CONGRESS he

Third Regular Session
House Bill No. = 6965

INTRODUCED BY HON. FFLICIANG BELMONTE JR., ION, NEPTALI M, GONZALES U1
AND HON. DANILO E, SUAREZ

EXPLANATORY NOTE

The Philippines is a member of the Asia‘Pacific Group on Money
Laundering (APG), which is a regionally focused international organization
consisting of forty one (41) members and a number of international and regional
observers including the United Nations, Intemational Monetary Fund. Financial
tion Task Force (FATF), Asian Development Bank and World Bank. The APG
is an associate member of the FATF und all APG members commit to effectively
implement the FATE's intemational standards for anti-money laundering and
combating the financing of terrorism, referred 10 as the 40+9 Recommendations

The FATF was established in 1989 by G-7 nations, The FATF is an
international governmental body whose purpose is the development and
promotion of policies, both at national and international levels, to combat money
laundering and terrorist finaneing . The Task Force is therefore a “policy-making
body” which works to generate the necessary political will to bring about national
legislative and regulatory reforms in these areas,

The Anti-Money Laundering Act of 200! (R.A, 9160, as amended by Rust
9194) was enacted following the FAT's blacklisting of the Philippines in June
2000. To be blacklisted means that the Philippines is perceived to be “non-
cooperative in the global fight against money laundering and terrorist financing.
In 2003, an amendment was made to the AMLA through the passage of R..\
9194, In 2004, the FATF raised its intemational standards by revising its
recommendations (at present. there are 40 recommendations on money laundering
and 9 special recomendations on territorial financing (“FATF 40 plus”).

This bill serves w reinforce our country's Anti-Money Laundering
legislative measures. It ultimately addresses the noted deficiencies in the
Philippines’ legal framework with regard to anti-money laundering, by making
our state fully compliant with the international standards set forth not only by the
VATY. but atso directives laid down under the 1988 United Nations Convention
Against Illicit Traffic in Narcotic Drugs and Psychotropic Substances (the Vienna
Convention), the 2001 United Nations Convention Against Transnational
Organized Crime (the Palermo Convention), the 2003 United Nations Convention
Against Corruption (the Merida Convention), and other intemational standards in
combating money laundering



There is indeed an urgency 0 put more teeth to the country's anti-money
laundering Jaw, not only to make the Philippines compliant with international
standards, but to protect the country’s financial integrity and economic
development.

Tn view of the foregoing. the immediate enactment of this measure 's
eamestly sought.

HON. NEPTALI My GONZALES IL ion. FELICIANO BELMONTE JK



Republic of the Philippines
HOUSE OF REPRESE
Quezon Cit

FIFTEENTH CONGRESS

Third Regutar Session
House Bill No. 6565

By REPRESENTATIVES BELMONTE (F.1, GONZALES (N.) AND SUAREZ

AN ACT FURTHER STRENGTHENING THE ANTI-MONEY
LAUNDERING LAW, AMENDING FOR THE PURPOSE
REPUBLIC ACT NO. 9160, OTHERWISE KNOWN AS THE “ANTI-
MONEY LAUNDERING ACT OF 2001", AS AMENDED”

Be it enacted by the Senate and Representatives of the Philippines in Congress

assembled

SECTION 1, Section 3a) of Republic Act No, 9160, as amended. is
hereby further amended to read as follows:

“(a) Covered institution OR INDIVLDUAL refers to:

“(1) Banks, — quasi-banks, trust entities, © FOREIGN
EXCHANGE, CORPORATIONS, MONEY CHANGERS,
MONEY PAYMENT, REMITTANCE AND TRANSFER
COMPANIES AND OTHER SIMILAR ENTITIES ail other
institutions and their subsidiaries and affiliates supervised or regulated

by the Bangko Sentral ng Pilipinas (BSP):

“(2) Insurance companies. PRE-NEED COMPANIES and all
other institutions supervised or regulated by the Insurance Commission
acy.

“(3) (i) securities dealers. brokers. salesmen, investment houses
and other similar entities, managing securities or rendering services as
investment agent, advisor. or consultant, (ii) mutual funds, close-end
investment companies. common tust funds, and other similar entities,
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 or regulated by the Securities and Exchange Commission
(SEC);

4) CASINOS, INCLUDING INTERNET CASINOS;

(3) REAL ESTATE AGENTS;

(6) DEALERS IN PRECIOUS METALS;

“(2) DEALERS IN PRECIOUS STONES;

(8) TRUST AND COMPANY SERVICE PROVIDERS
WHICH, AS A BUSINESS, PROVIDE ANY OF TRE
FOLLOWING SERVICES TO THIRD PARTIES: (1) ACTING
AS A FORMATION AGENT OF JURIDICAL PERSONS; (1)
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; 1) PROVIDING A REGISTERED OFFICE;
BUSINESS = ADDRESS = OR = ACCOMMODATION,
CORRESPONDENCE OR ADMINISTRATIVE ADDRESS FOR
A COMPANY, A PARTNERSHIP OR ANY OTHER LEGAL
PERSON OR ARRANGEMENT: IV) ACTING AS (OR
ARRANGING FOR ANOTHER PERSON TO ACT AS A
TRUSTEE OF AN EXPRESS TRUST; AND V) ACTING AS (OR
ARRANGING FOR ANOTHER PERSON TO ACT AS) A
NOMINEE SHARFHOLDER FOR ANOTHER PERSON.

“(9) PERSONS WIIO PROVIDE ANY OF THE FOLLOWING
SERVICES:

(a) BUYING AND SELLING OF REAL ESTATE;

(b) MANAGING OF CLIENT MONEY, SECURITIES OR
OTHER ASSETS

(©) MANAGEMENT OF BANK, SAVINGS OR
SECURITIES ACCOUNTS:



{d) ORGANIZATION OF CONTRIBUTIONS FOR THE

2 CREATION, OPERATION OR MANAGEMENT OF COMPANIES:

3 AND

4 (e) CREATION. OPERATION OR MANAGEMENT OF

= JURIDICAL PERSONS OR ARRANGEMENTS, AND BUYING

6 AND SELLING BUSINFSS ENTITIES.

- SEC. 2. Section 3 (i) of the same Act is hereby amended to read as follows:
8 (i) Untawfil activity refers to any act or omission or series or

9 combination thereof involving or having direct relation to -he

6 following:

0 (1) Kidnapping for ransom under Article 267 of Act No. 3815

otherwise known as the Revised Penal Code, as amended;
(2) Sections 4, 5. 6, 8. 9, 10, 11, 12, 13, 14, 15 and 16 of
it Republic Act No, 9165, othensise known as the Comprehensive

Dangerous Drugs Act of 2002:

(3) Section 3 paregraphs B,C, E, G, H and I of Republic Act

o No. 3019, as amended, otherwise known as the Anti-Graft and Corrupt

8 Practices Act;
6 (4) Plunder under Repubtic Act No, 7080, as amended;
20 (5) Robbery and extortion under Anicles 294, 295, 296, 299,
2 300, 301 and 302 of the Revised Penal Code, as amended;

(6) Jucteng and Masiao punished as illegal gambling under
Presidential Decree No. 1602:

(7) Piracy on the high seas under the Rev
amended, and Pres:

(8) Qualified the% ander Anicle 310 of the Revised Penal

d Penal Code. as

zp Cade, as amended,

28 (9) Swindling under Article 315 of the Revised Penal Code, as
29 amended:

30 (10) Smuggling under Republic Act Nos. 455 and 1937;

3L (11) Violations under Republic Act No. 8792, otherwise known

as the Electronic Commerce Act of 2000;



(22) Hijacking and other violations under Republic Act No.
6235; destructive arsor: and murder. as defined under the Revised
Penal Code, ax amended:

(13) TERRORISM AND CONSPIRACY TO COMMIT
TERRORISM AS DEFINED AND PENALIZED UNDER
REPUBLIC ACT NO. 9372;

(4) BRIBERY UNDER ARTICLES 210, 211, 211-4 OF
THE REVISED PENAL CODE, AS AMENDED, AND
CORRUPTION OF PUBLIC OFFICERS UNDER ARTICLE 212
OF THE REVISED PENAL CODE, AS AMENDED;

(18) FRAUDS AND ILLEGAL EXACTIONS AND
TRANSACTIONS UNDER ARTICLES 213, 214, 215, AND 216
OF THE REVISED PENAL CODE, AS AMENDED;

(16) MALVERSATLON OF PUBLIC FUNDS AND
PROPERTY UNDER ARTICLES 217 AND 222 OF THE
REVISED PENAL CODE, AS AMENDED;

(17) FORGERIES AND COUNTERFEITING UNDER
ARTICLES 163, 166, 167, 168, 169, AND 176 OF THE REVISED
PENAL CODE, AS AMENDED:

(18) VIOLATIONS OF SECTIONS 4 TO 6 OF REPUBLIC
ACT NO, 9208, OTHERWISE KNOWN AS ‘THLE ANTL-
TRAFFICKING IN PERSONS ACT OF 2003;

(19) VIOLATIONS OF SECTIONS 68 TO 79 OF
CHAPTER 1V, OF THE PRESIDENTIAL DECREE NO, 705,
OTHERWISE KNOWN AS THE REVISED FORESTRY CODE
OF THE PHILIPPINES. AS AMENDED;

(20) VIOLATIONS OF SECTIONS 86 TO 106 OF
CHAPTER VI, OF REPUBLIC ACT NO. 8550, OTHERWISE
KNOWN AS THE PHILIPPINE FISHERIES CODE OF 1998;

(21) VIOLATIONS OF SECTIONS 101 TO 107, AND 110
OF REPUBLIC ACT NO. 7942, OTHERWISE KNOWN AS THE
PHILIPPINE MINING ACT OF 1995;



(22) VIOLATIONS OF SECTION 27 (C), 05), OF), (G) AND
@), OF REPUBLIC ACT NO, 9147, OTHERWISE KNOWN AS
THE WILDLIFE RESOURCES CONSERVATION AND
PROTECTION ACT;

(23) VIOLATION OF SECTION 7(B) OF REPUBLIC ACT
NO. 9072, OTHERWISE KNOWN AS THE NATIONAL CAVES
AND CAVE RESOURCES MANAGEMENT PROTECTION
ACT;

(24) VIOLATION OF REPUBLIC ACT NO, 6539.
OTHERWISE KNOWN AS THE ANTI-CARNAPPING ACT OF
2002, AS AMENDED;

(28) VIOLATIONS OF SECTIONS 1, 3 AND 5 OF
PRESIDENTIAL DECREE NO. 1866, AS AMENDED,
OTHERWISE KNOWN AS THE DECREE CODIFYING THE
LAWS ON ILLEGAL/UNLAWFUL POSSESSION,
MANUFACTURE, DEALING IN, ACQUISITION OR
DISPOSITION, OF FIREARMS, AMMUNITION OR
EXPLOSIVES;

(26) VIOLATION OF PRESIDENTIAL DECREE NO,
1612, OTHERWISE KNOWN 4S THE ANTI-FENCING LAW;

Q7) VIOLATIONS OF SECTIONS 254 AND 255 OF THE
NATIONAL INTERNAL REVENUE CODE OF 1997, AS
AMENDED;

(28) Fraudu‘ent practices and other violations under Republic

Act No, 8799, otherwise known as the Securities Regulation Code of
2000; AND

(29) Felonies or offenses of a similar nature that are punishable

under the penal laws of other cour:
SEC, 3. Section 4 of th
"SEC. 4. Money Lau

ties,

same Actist

reby amended to read as follows:

ring Offense. - Money laundering is a
crime whereby the proceeds of an unlawful activity as herein defined
are transacted, CONVERTED, TRANSFERRED, DISPOSED OF,


MOVED, ACQUIRED. POSSESSED, USED, CO?
DISGUISED.

IT IS COMMITTED BY ANY PERSON WILO, KNOWING
OR HAS REASON TO BELIEVE THAT ANY MONETARY
INSTRUMENT OR PROPERTY REPRESENTS, INVOLVES,
OR RELATES TO THE PROCEEDS OF ANY UNLAWFUL
ACTIVIT

{a) TRANSACTS OR ATTEMPTS TO TRANSACT SAID
MONETARY INSTRUMENT OR PROPERTY;

(b) CONVERTS, TRANSFERS, DISPOSES OF, MOVES,
ACQUIRES, POSSESSES OR U: OR ATTEMPTS TO
CONVERT, TRANSFER, DISPOSE OF, MOVE, ACQUIRE,
POSSESS OR USE SAID MONETARY INSTRUMENT OR
PROPERTY;

(ce) CONCEAIS OR DISGLISRS OR ATTEMPTS TO
CONCEAL OR DISGUISE THE TRUE NATURE, SOURCE,
LOCATION, DISPOSITION, MOVEMENT OR OWNERSHIP
OF OR RIGHTS WITH RESPECT TO SALD MONETARY
INSTRUMENT OR PROPERTY: AND

(d) PERFORMS OR FAILS TO PERFORM ANY ACT AS
A RESULT OF WHICH HE FACILITATES THE OFFENSE OF
MONEY LAUNDERING REFERRED TO IN PARAGRAPHS
(A), (B) OR (C) ABOVE.

MONEY LAUNDERING IS ALSO COMMITTED BY ANY
PERSON WHO, KNOWING THAT ANY MONETARY
INSTRUMENT OR PROPERTY 1S REQUIRED UNDER THIS
ACT TO BE DISCLOSED AND FILED WITH THE ANTI-
MONEY LAUNDERING COUNCIL (AMLC), FAILS TO DO
so,

FALED OR



SEC. 4. Section 6(a) of the si
AC. 6. Prosecuri

act is hereby amended to read as follows:

ion oF Money Laundering. -

(a) Any person may be charged with and convicted of both the
+ offense of money iaundering. and the unlawfut activity as hersin
a defined, AND FOR TAX EVASION ON INCOME DERIVED
5 FROM ANY UNLAWFUL ACTIVITY HERFIN DEFINED,
: (b} Any proceeding relating to the unlawful activity, OR THE
8 TAX EVASION ON INCOME DERIVED FROM THE
a UNLAWFUL ACTIVITY WiliICH SHALL BE PROSECUTED
BY THE BIR, s

offense or violation under this Act without prejudice to the freezing

edence over the prosecution of any

and other remedies provide

Scetion 7 oi

ie sane Act is hereby amended to read as follows:
“SEC. 7. Crsazton af A

Is - Yhe Anti-Money Laundering Council

~Money Laundering Council (MLC).

is hereby created and shail be

composed of the Governur of the Baneko Sentral ng Pilipinas as

surance Commission and the

Commission, as member

Yhe AMLC shall act unanimously in the discharge of its functions as
x detined hereunder:

a XX

(6) to apply before the Court of Appeals, ex parte, for the
freezing of any monetary instrument ot properly alleged to be

RELATED IN ANY WAY TO.

any unlawful activity as defined in
Section 3(i) hereof;

xx

2 SFC. 6, Section 9 (e), paregr

s 1 and 4 of the same Act are hereby
28 amended to read as follows:

a SEC.9. Prevention uf Money Laundering; Customer

Hdentification Requirements and Record Keeping.
(a) xxx

(b) xxx



(c) Reporting of Covered and Suspicious Transactions
Covered institutions shall report to the AMLC all covered transactions

and suspicious wanssctions within five (5) working days fom

occurrence thercof. unless the AMLC prescribes a DIFFERENT
period not exceeding FIFTEEN

XXX

XXX

When reporting cove

covered institutions ar cers and employees xxx are

prohibited from commvanicating. directly or indircetly, in any manner
or by any means, to any person or ontity. the media, the fact that a
covered or suspicious wansaction HAS BEEN REPORTED OR IS
ABOUT TO BE REPORTED. the contents OF THE REPORT, or
any other information jr; relation therera

XXX.”

SEC. 7. Section 12 of the

(a) Cail Forfeiture. - UPON DETERMINATION THAT
PROBABLE CAUSE FXISTS THAT ANY MONETARY
INSTRUMENT OR PROPERTY IS FOUND TO BE RELATED
IN ANY WAY TO AN UNLAWFUT. ACTIVITY AS DEFINED
UNDER SECTION 3 HEREOF OR A MONEY LAUNDERING
OFFENSE UNDER SECTION 4 HEREOF, THE AMLC SHALL
FILE WITH THE APPROPRIATE COURT THROUGH THE
OFFICE OF THE SOLICITOR GENERAL, A PETITION FOR
FORFEITERE AND THE RULES OF COURT ON CIVIL
FORFEITURE SHALL APPLY.

(b) Claim on Farteited 4

ame Act is hercby amended to read as follows:

+ Where the court has issued an

order of forfeiture of the monetary instrament or property in a criminal

prosecution for any money launeri nse defined under Section 4

of this Aci, the offen

Tor any ol

er person claiming an interest

therein may apply, by veri tion. for a decfaration that the same

legitimately belongs to him snd zor segregation of exclusion of the



monetary instrument or property corresponding thereto, The verified

petition shall be filed with

‘ourt Which rendered the judgment of

conviction and order for foriziuze. within fifteen (15) days from the

date of the order of forieiture. in default of which the said order shall

become final and executors. This provision shall apply in both civil

and criminal forfeiture.

{c) Payment in Lieu of Forfeiture - Where the court has issued

an order of forfeiture of the monetary instrument or property subject of

ed unde: tion 4. and said order

a money laundering 0

cannot be enforced bi ar monetary instrument or

. be located, or it has been

property cannot, with
substantially altered, ished in value or otherwise
rendered worthless by any act or omission, directly or indirectly,
atiributable ‘0 the offender, or it has heen concealed, removed.

converted, or otherwise transiered to prevent the same from being

found or to avoid fort: or it is located outside the
Philippines or has been placed ar brought outside the jurisdiction of

the court, or it has been commingled with other monetary instrumeats

of property dclonging to either the o:fender himself or a third person

cr entity, thereby ren ame difficult 1 identity or be

segregated for purposes or forveinare, the court may, instead of

enforcing the order or forfzinre of the monetary instrument or

properly or part thereo?

interest therein, accordingly order the

convicted offender to pay 2n amount equal to the value of said

monetary instrumen: or property. This provision shall epply in both

civil and criminal forfe'ture.

(a) DISPOSITION OF FORFEITED ASSETS AND
RETENTION. - AFTER DEDUCTING THE COST OF
LITIGATION AND THE PAYMENT OF PROPER TAXES DUE
TO THE STATE, ENTY-FIVE PERCENT (75%) OF THE
NET PROCEEDS OF THE FORFEITED ASSETS OR
PROCEEDS THERFFROM SILALL BE TURNED OVER TO



’ THE NATIONAL TREASURY AND THE REMAINING

2 TWENTY-FIVE PERCENT (25%) SHALI. BE RETAINED BY
THE AMEC TO AUGMENT THE APPROPRIATION FOR ITS

s OPERATIONS AND MAINTENANCE IN THE GENERAL
APPROPRIATIONS ACT. FOR THIS PURPOSE, THE AMLC

6 MAY PROMULGATE RULES ON THE SALE OF FORFEITED

- ASSFTS,”

8 SEC. 8. Section 14 of Act. a3 amended, is hereby further amended

3 To read as follows

‘6 “SEC. 14. Penal Pro ~ ia) Penaities for the Crime of

Money Laundering. The penairy of imprisonment ranging from seven
to fourteen (14) years and a fine of not less than Three million

3 Philippine pesos (Pap3,000.000.00) but not more than twice the value

of the monelary énstrument or property involved in the offense, shal]

be imposed upon a person under Section 4(a), (B), AND (C)

16 t.

- “Che penalty of imprisonment trom four (4) to seven (7) years
28 and a fine of aot less chan One million five hundred thousand
J Philippine pesos (Php!.$1).0.00) but not more than Three miltion

Philippine pesos (Php3.000,0-H,001), shall be imposed upon 2 person

2 convicted under Section =(D) oF this Act

= “The penzlty of imprisenment from six ¢6) months to four (4)

x years or i fine of not less thar: One hundred thousand Philippine pesos

at (Php100,000,00) out not mere than Five hundred thousand Philippine

esos (Php500,000.00). er otk. shall be imposed on a person

26 convicted under THE LAST PARAGRAPH OF Section 4 of this
aa Act

2B “(b) xxx

29 “(c) XXX

(d) xxx
“(e) IMPOSTHION OF ADMINISTRATIVE SANCTIONS.
- AFTER DUE NOTICE AND HEARING, THE AMLC SHALL,



AT ITS DISCRETION, IMPOSE SANCTIONS, INCLUDING
MONETARY PENALTIES. WARNING OR REPRIMAND,
UPON ANY COVFRED INSTITUTION, ITS DIRECTORS,
OFFICERS, EMPLOYEES OR ANY OTHER PERSON FOR
VIOLATIONS OF THIS ACT. ITS IMPLEMENTING RULES
AND REGULATIONS, OR FOR FAILURE OR REFUSAL TO
COMPLY WITH AMLC ORDERS, RESOLUTIONS AND
OTHER ISSUANCES. SUCH MONETARY PENALTIES
SHALL BE IN AMOUNTS AS MAY BE DETERMINED BY
THE COUNCIL TO BF APPROPRIATE, WHICH SHALL NOT
BE MORE. THAN FIVE HUNDRED THOUSAND PESOS (PHP
500,000.00) PER VIOLATION. THRE AMLC MAY
PROMULGATE RULES ON FINES AND PENALTIES TAKING
INTO CONSIDERATION THE ATTENDANT
CIRCUMSTANCES, SUCH AS THE NATURE AND GRAVITY
OF THE VIOLATION OF IRREGULARITY, THE SIZE,
FUNCTIONS AND RESOURCES OF THE COVERED
INSTITUTION. = THE IMPOSITION = OF =~ THE
ADMINISTRATIVE SANCTIONS SHALL BE WITHOUT
PREJUDICE TO THE FILING OF CRIMINAT. CHARGES
AGAINST ‘THE PERSONS RESPONSIBLE FOR THE
VIOLATION.”

SFC. 9, Separabitiy Clauve, -

iy provision of this Act is declared

unconstitutional, the same shall not arfect th

alidity and effectivity of the other
provisions thereof,

SEC. 10, Repeating Clause. - All laws, decrees, orders and issuances or

portion thereof, which are inconsister: with the provision of this Act, are hereby
repealed, amended or modified accordinaly

SEC. 11. Fyfectiviny, - This Act shalt take effect fifteen (15) days following
its publication in at least two 121 ational newspapers of general circulation.

Approved,