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The following post does not create a lawyer-client relationship between Alburo Alburo and Associates Law Offices (or any of its lawyers) and the reader. It is still best for you to engage the services of a lawyer or you may directly contact and consult Alburo Alburo and Associates Law Offices to address your specific legal concerns, if there is any.
Also, the matters contained in the following were written in accordance with the law, rules, and jurisprudence prevailing at the time of writing and posting, and do not include any future developments on the subject matter under discussion.
AT A GLANCE:
Suspicious transactions refer to transactions with covered persons, regardless of the amounts involved, where any of the following circumstances exist:
1. There is no underlying legal or trade obligation, purpose or economic justification;
2. The client is not properly identified;
3. The amount involved is not commensurate with the business or financial capacity of the client;
4. 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 Anti-Money Laundering Act;
5. Any circumstance 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 person;
6. The transaction is in any way related to an unlawful activity or offense under the Anti-Money Laundering Act that is about to be, is being, or has been committed; or
7. Any transaction that is similar or analogous to any of the foregoing.
(Source: Section 3, par. b-1, Republic Act No. 9160, as amended by Republic Act No. 11521)
The State, through the enactment of the Anti-Money Laundering Act, including its amendments, commits to protect and preserve the identity and confidentiality of bank accounts and to ensure that the Philippines shall not be used as a money laundering site for the proceeds of any unlawful activity.
Consistent with its foreign policy, the State shall extend cooperation in transnational investigations and prosecutions of persons involved in money laundering activities wherever committed, as well as in the implementation of targeted financial sanctions related to the financing of the proliferation of weapons of mass destruction, terrorism, and financing of terrorism, pursuant to the resolution of the United Nations Security Council. (Section 2, R.A. No. 9160, as amended by R.A. No. 11521)
Did you know that failure to report a suspicious transaction is considered an act of money laundering?
The law says:
“Money laundering is also committed by any covered person who, knowing that a covered or suspicious transaction is required under this Act to be reported to the Anti-Money Laundering Council (AMLC), fails to do so.” (Section 4, R.A. 9160, as amended by R.A. No. 10365)
But what are suspicious transactions? The law says:
Suspicious transactions are transactions with covered persons, regardless of the amounts involved, where any of the following circumstances exist:
- 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
- Any circumstance 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 person;
- 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; or
- Any transaction that is similar or analogous to any of the foregoing. (Section 3, par. b-1, Republic Act No. 9160, as amended by Republic Act No. 11521)
In reporting covered and suspicious transactions, the law mandates that covered persons shall report to the AMLC all covered transactions and suspicious transactions within five (5) working days from occurrent thereof, unless the AMLC prescribes a different period not exceeding fifteen (15) working days. (Section 9, par. c, R.A. 9160, as amended by R.A. No. 10365)
When reporting covered or suspicious transactions to the AMLC, covered persons and their officers and employees are prohibited from communicating, directly or indirectly, in any manner or by any means, to any persons or entity, the media, the fact that a covered or suspicious transaction has been reported or is about to be reported, the contents of the report, or any other information in relation thereto. Neither may such reporting be published or aired in any manner or form by the mass media, electronic mail, or other similar devices. In case of violation thereof, the concerned officer and employee of the covered person, and media shall be held criminally liable.” (Section 9, R.A. 9160, as amended by R.A. No. 10365)
In the case of Republic of the Philippines v. Sandiganbayan and Office of the Ombudsman (G.R. No. 232724-27, February 15, 2021), the Supreme Court ruled:
No administrative, criminal or civil proceedings, shall lie against any person for having made a covered transaction report in the regular performance of his duties in good faith, whether or not such reporting results in any criminal prosecution under the Anti-Money Laundering Act or any other law. (Republic of the Philippines, represented by the Anti-Money Laundering Council v. Sandiganbayan and Office of the Ombudsman, G.R. No. 232724-27, February 15, 2021)
This is also known as the Safe Harbor Provision.
Further, the Supreme Court held that the Anti-Money Laundering Council is not merely a repository of reports and information on covered and suspicious transactions. It was created precisely to investigate and institute charges against those suspected to commit money laundering activities.
The Supreme Court opined that the criminal prosecution of such offenses would be unduly hampered if it were to be prohibited from disclosing such information. For the Anti-Money Laundering Council to refuse disclosing the information required of it would be to go against its own functions under the law. (Republic of the Philippines v. Sandiganbayan and Office of the Ombudsman, G.R. No. 232724-27, February 15, 2021)
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