Covered Institutions and Definitions Quiz

Questions and Answers

Which of the following best describes a 'Covered Institution'?

Entities that exclusively deal with investments in securities

Only banks and insurance companies

Any financial entity, including its subsidiaries and affiliates, regulated by the Bangko Sentral ng Pilipinas (correct)

Organizations that are primarily involved in stock trading

What percentage ownership defines a 'subsidiary' of a covered institution?

At least 75%

At least 20%

More than 50% (correct)

Exactly 50%

In relation to a covered institution, what is the minimum ownership percentage needed for an entity to be considered an 'affiliate'?

Exactly 20%

Between 20% and 50% (correct)

Less than 20%

At least 51%

Which of the following is NOT classified as a 'Covered Institution'?

Insurance agents Signup and view all the answers

What does the term 'affiliate' imply in the context of covered institutions?

Ownership of between 20% to 50% by another institution Signup and view all the answers

What is the minimum imprisonment term for a person convicted under Section 4 (a) of the AMLA?

Seven years Signup and view all the answers

Which offense under the AMLA carries a penalty of a fine of not less than Php100,000?

Section 4 (c) Signup and view all the answers

Which penalty applies to a person convicted under Section 4 (b) of the AMLA?

Imprisonment from four to seven years Signup and view all the answers

What is the maximum fine for someone convicted under Section 4 (a) of the AMLA?

Php3,000,000 Signup and view all the answers

What condition must be met before the AMLC imposes administrative sanctions?

Due notice and hearing must be given Signup and view all the answers

Which penalty applies if a person is convicted under Section 4 (c) of the AMLA?

Imprisonment from six months to four years Signup and view all the answers

Which amount represents the minimum fine under Section 4 (b) of the AMLA?

Php1,500,000 Signup and view all the answers

What value is considered for the maximum fine under Section 4 (c) of the AMLA?

Php500,000 Signup and view all the answers

What is the maximum penalty amount for violations or irregularities as determined by the council?

PHP500,000.00 Signup and view all the answers

What penalty is imposed on a person convicted under Section 9 (b) of the AMLA for failure to keep records?

Imprisonment or a fine Signup and view all the answers

Which consequence can occur if the offender is a corporation or any juridical person?

The responsible officers may face penalties Signup and view all the answers

What is the penalty for a person who maliciously files false information regarding money laundering?

Imprisonment of 6 months to 4 years Signup and view all the answers

What is the duration for which existing freeze orders issued by the AMLC remain in force after the effectivity of this act?

Thirty (30) days Signup and view all the answers

Under what condition can the existing freeze orders remain effective after being extended by the Court of Appeals?

Unless otherwise dissolved by the same court Signup and view all the answers

What can happen to a public official who refuses to testify when called upon?

They face the same penalties as defined for violations Signup and view all the answers

Which consequence applies if the offender is an alien?

They may be deported after serving penalties Signup and view all the answers

Which entity has the authority to extend existing freeze orders beyond their initial thirty (30) day period?

The Court of Appeals Signup and view all the answers

What action would dissolve an existing freeze order that has been extended by the Court of Appeals?

A decision made by the Court of Appeals Signup and view all the answers

Which of the following penalties is not applicable for failure to keep records?

Probation Signup and view all the answers

When was the act, which contains the transitory provisions regarding freeze orders, approved?

August 6, 2003 Signup and view all the answers

What minimum fine is associated with malicious reporting of false information?

PHP100,000.00 Signup and view all the answers

What characterizes piracy in inland Philippine waters under the Revised Penal Code?

It encompasses attacks on vessels within the waters of the Philippines. Signup and view all the answers

Which act is considered estafa through altering the quality or weight of goods?

Changing the weight of a product sold to deceive the buyer. Signup and view all the answers

Under the Revised Penal Code, aiding and abetting pirates refers to what?

Providing resources or support to facilitate piracy. Signup and view all the answers

Which scenario is NOT classified as estafa related to abuse of confidence?

A person overcharging for goods and pocketing the excess. Signup and view all the answers

What does the act of inducing another to sign a document by deceit categorize as?

Estafa. Signup and view all the answers

Which definition aligns with the act of qualified theft under Article 310?

Taking someone else's property with the intention to permanently deprive them of it. Signup and view all the answers

Which of the following is categorized as estafa by removing or concealing court records?

Destroying evidence of a crime. Signup and view all the answers

What constitutes piracy on the high seas as defined by the revised legislation?

The illegal seizure of property from another ship. Signup and view all the answers

Under what circumstances can the AMLC inquire into deposits or investments without a court order?

If the deposit is linked to unlawful activities specified under Rule 11.2 Signup and view all the answers

Which type of unlawful activity is NOT explicitly mentioned as a basis for AMLC inquiry without a court order?

Tax evasion Signup and view all the answers

What must be established for the AMLC to examine deposits related to unlawful activities?

There must be probable cause indicating a link to unlawful activities Signup and view all the answers

Which of the following actions must the AMLC take before inquiring into a financial institution's records related to lawful activities?

Issue a resolution authorizing the inquiry Signup and view all the answers

According to Rule 11.2, which activity related to terrorism allows for inquiry into deposits without a court order?

Murder perpetrated by terrorists Signup and view all the answers

Which of the following is a requirement for the AMLC to examine deposits or investments related to specified unlawful activities?

There must be probable cause linking the deposits to the unlawful activities Signup and view all the answers

What must a banking institution do upon receiving a resolution from the AMLC?

Comply with the resolution and provide the requested information Signup and view all the answers

In which of the following scenarios can the AMLC not inquire into bank deposits without a court order?

For any investigation related solely to civil disputes Signup and view all the answers

Study Notes

Definitions of Covered Institutions

"Covered Institution" includes various financial entities under the regulation of the Bangko Sentral ng Pilipinas (BSP).
Types of institutions covered:
- Banks
- Offshore banking units
- Quasi-banks
- Trust entities
- Non-stock savings and loan associations
- Pawnshops
- Any other related institutions, including subsidiaries and affiliates

Subsidiary and Affiliate Definitions

A subsidiary is defined as an entity where more than 50% of the outstanding voting stock is owned by:
- A bank
- A quasi-bank
- A trust entity
- Other institutions regulated by the BSP
An affiliate is defined as an entity with ownership of at least 20% but not exceeding 50% of the voting stock by:
- A bank
- A quasi-bank
- A trust entity
- Other regulated financial institutions

Additional Covered Entities

The definition includes insurance companies, insurance agents, and insurance brokers as covered institutions under this Act.

Extradition and International Cooperation

Money laundering is classified as an extraditable offense under treaties with states that are signatories to the United Nations Convention Against Transnational Organized Crime.
The Philippines commits to including money laundering in all future extradition agreements with these state parties.

Penal Provisions for Money Laundering (AMLA)

Section 4 (a):
- Penalty: Imprisonment of 7 to 14 years.
- Fine: Minimum Php 3,000,000, not exceeding twice the value of the involved property.
Section 4 (b):
- Penalty: Imprisonment of 4 to 7 years.
- Fine: Minimum Php 1,500,000, not exceeding Php 3,000,000.
Section 4 (c):
- Penalty: Imprisonment of 6 months to 4 years or fine.
- Fine: Minimum Php 100,000, not exceeding Php 500,000.
Administrative Sanctions:
- The Anti-Money Laundering Council (AMLC) imposes fines and penalties on institutions and individuals violating AMLA provisions after due notice and hearing.

Additional Criminal Offenses

Piracy: Defined under the Revised Penal Code, includes piracy on high seas and aiding pirates.
Qualified Theft: Outlined in Article 310 of the Revised Penal Code.
Swindling (Estafa): Various forms include misappropriation of funds, alterations of documents, and fraudulent practices.

AMLC Powers

The AMLC has the authority to examine bank deposits and investments related to unlawful activities with or without a court order, depending on the nature of the offense, such as kidnapping or drug violations.
In cases of probable cause relating to money laundering, the AMLC can issue an inquiry resolution without prior court approval.

Penalties for AML Violations

Failure to Keep Records: Penalty of 6 months to 1 year imprisonment or fine between Php 100,000 to Php 500,000.
Malicious Reporting: Penalty of 6 months to 4 years imprisonment or fine of Php 100,000 to Php 500,000, with no probation benefits.
Corporate Offenders: Responsible officers are penalized; corporations may face license suspension or revocation.

Testimony and Confidentiality

Public officials or employees refusing to testify shall incur penalties as prescribed in the laws relating to AML.
Breach of confidentiality relating to AML processes results in penalties, emphasizing the importance of integrity and confidentiality in investigations.

Transitory Provisions

Existing freeze orders by AMLC remain effective for 30 days post-enactment of relevant legislation unless extended by the Court of Appeals.

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Description

Test your knowledge on the definitions and types of covered institutions regulated by the Bangko Sentral ng Pilipinas. This quiz covers banks, subsidiaries, affiliates, and more, providing insights into the financial entities and their classifications. Perfect for students and professionals in finance and banking.