2018 ANTI-MONEY LAUNDERING COUNCIL Implementing Rules and Regulations PDF

ANTI-MONEY LAUNDERING COUNCIL 2018 IMPLEMENTING RULES AND REGULATIONS OF REPUBLIC ACT NO. 9160, OTHERWISE KNOWN AS THE ANTI-MONEY LAUNDERING ACT OF 2001, AS AMENDED [JANUARY 2021 AMENDMENT] In accordance with Section 7(7)...

ANTI-MONEY LAUNDERING COUNCIL 2018 IMPLEMENTING RULES AND REGULATIONS OF REPUBLIC ACT NO. 9160, OTHERWISE KNOWN AS THE ANTI-MONEY LAUNDERING ACT OF 2001, AS AMENDED [JANUARY 2021 AMENDMENT] In accordance with Section 7(7) of Republic Act No. 9160, otherwise known as the “Anti-Money Laundering Act of 2001”, as amended (AMLA), the following rules and regulations1 are hereby promulgated: Chapter I. General Provisions Rule 1 – Purpose, Policies and Principles Rule 2 – Definition of Terms Rule 3 – Unlawful Activities Rule 4 – Covered Persons Chapter II. Supervision and Enforcement Rule 5 – Anti-Money Laundering Council Rule 6 – Powers and Functions of the AMLC Rule 7 – Supervision and Compliance Checking Rule 8 – Investigation and Law Enforcement Chapter III. Money Laundering, Terrorism Financing, and Asset Forfeiture Rule 9 – Money Laundering and Terrorism Financing Rule 10 – Freeze Order and Targeted Financial Sanctions Rule 11 – Bank Inquiry Rule 12 – Asset Forfeiture Chapter IV. National Risk Assessment and Management Rule 13 – National Risk Assessment Rule 14 – National Risk Management Chapter V. Preventive Measures and Obligations of Covered Persons Rule 15 – Institutional Risk Assessment and Management Rule 16 – Money Laundering/Terrorism Financing Prevention Program Chapter VI. Preventive Measures Rule 17 – Prohibited Accounts Rule 18 – Customer Due Diligence 1 Amended, AMLC Regulatory Issuance A, B and C Nos. 1, Series of 2020, which took effect on 31 January 2020; and 1, Series of 2021, which took effect on 31 January 2021. Section 1. Purpose and Applicability of CDD 1.1 Purpose of CDD 1.2 When is CDD Applicable 1.3 Existing Customers Section 2. Customer Due Diligence Measures 2.1. Measures for CDD 2.2. Timing of CDD 2.3. Average Due Diligence 2.4. Customer Acceptance Policies Section 3. Customer Identification Process 3.1. General Requirement for CIP 3.2. First Time Transactions 3.3. System for Collection and Recording of Data 3.4. Required Identification from Natural Persons 3.5. Required Identification Data from Juridical Persons 3.6. Required Identification Data from Legal Arrangements 3.7. Sufficiency of PSN or PhilID in Proving Identity. Section 4. Customer Verification Process 4.1. General Requirement for CVP 4.2. CVP for Juridical Persons and Legal Arrangement 4.3. Timing of CVP 4.4. Transacting or Using Relationship prior to CVP 4.5. Modes of CVP 4.6. Use of Communication and Information Technology Section 5. Identification and Verification of Agents Section 6. Beneficial Ownership Verification 6.1. General Requirement for BOV 6.2. Documents Evidencing Relationship 6.3. Timing of BOV 6.4. BOV for Juridical Persons 6.5. BOV for Legal Arrangements Section 7. Determination of the Purpose of Relationship Section 8. Ongoing Monitoring Process 8.1. General Requirement for OMP 8.2. EDD After Conduct of OMP 8.3. Review and Updating of Records Section 9. Risk-based Approach in Conducting CDD 9.1. Risk-based CDD 9.2 Risk Profiling of Customers 9.3. Risk Profiling of Juridical Persons 9.4. Documentation of Risk Profiling Results 9.5. Standards for RDD, ADD and EDD Page 2 of 106  Section 10. Enhanced Due Diligence Section 11. Reduced Due Diligence Section 12. Failure to Complete CDD Section 13. CDD and Tipping-off Rule 19 – Preventive Measures for Specific Transactions and Activities Rule 20 – Record-Keeping Rule 21 – Reliance on Third Parties and Service Providers Rule 22 – Transaction Reporting Chapter VII. Beneficial Ownership Rule 23 – Beneficial Ownership of Juridical Persons Rule 24 – Beneficial Ownership of Legal Arrangements Chapter VIII. Sanctions Rule 25 – Criminal Sanctions Rule 26 – Administrative Sanctions Rule 27 – Civil Sanctions Chapter IX. Domestic and International Cooperation. Rule 28 – Domestic Cooperation Rule 29 – Mutual Legal Assistance Rule 30 – Extradition Rule 31 – Other Forms of International Cooperation Chapter X. Miscellaneous Provisions Rule 32 – Asset Management, Feedback Mechanism and Statistics Rule 33 – Non-Intervention in the Operations of the Bureau of Internal Revenue Rule 34 – Separability and Repealing Clauses Rule 35 – Transitory Provisions, Modes of Amendment and Effectivity Clause Page 3 of 106  CHAPTER I GENERAL PROVISIONS RULE 1 – PURPOSE, POLICIES AND PRINCIPLES Section 1. Title and Purpose. 1.1. This set of rules and regulations shall be known as the “2018 Implementing Rules and Regulations” (IRR) of the AMLA. 1.2. This IRR was promulgated to provide the details of implementation of the AMLA, as well as to assist all covered persons, supervising authorities, law enforcement and other government agencies, and other stakeholders by prescribing the rules and regulations to combat money laundering, terrorism financing being a predicate offense to money laundering, and other associated unlawful activities. Section 2. State Policies on AML/CTF. The provisions of this IRR are in line with the following State Policies: (a) To protect and preserve the integrity of the Philippine financial system, including the confidentiality of bank accounts. (b) To ensure that the Philippines shall not be used as a money laundering site for the proceeds of any unlawful activity. (c) To extend cooperation, consistent with Philippines’ foreign policy, 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 terrorism financing, pursuant to the resolutions of the United Nations Security Council.2 (d) To protect life, liberty and property from acts of terrorism and to condemn terrorism and those who support and finance it; and to recognize it as inimical and dangerous to national security and the welfare of the people; and to make the financing of terrorism a crime against the Filipino people, against humanity and against the law of nations. (e) To recognize and to adhere to international commitments to combat the financing of terrorism, specifically to the International Convention for the Suppression of the Financing of Terrorism, as well as other binding terrorism related resolutions of the United Nations Security Council, pursuant to Chapter 7 of the United Nations Charter. (f) To reinforce the fight against terrorism by preventing and suppressing the commission of said offenses through freezing and forfeiture of property or funds while protecting human rights. 2 Amended, Section 1 of AMLC Regulatory Issuance A, B and C No. 1, Series of 2021, which took effect on 31 January 2021. Original provision reads as follows: “(c) To extend cooperation, consistent with Philippines’ foreign policy, in transnational investigations and prosecutions of persons involved in money laundering activities wherever committed.” Page 4 of 106 Section 3. Governing Principles. The anti-money laundering/counter-terrorism financing (AML/CTF) regime of the Philippines shall be governed by the following principles: (a) The AMLC, as the country’s financial intelligence unit, is vested by law with independence to perform its mandate. It upholds the continuous development of a team of highly ethical and professional personnel and implements efficient processes in the delivery of its mandate. (b) The AML/CTF laws, rules and regulations and other relevant issuances are implemented using a risk-based approach in a way that responds to the need to bring the financially excluded into the regulated financial sector, while at the same time maintaining effective safeguards and effective controls against money laundering/terrorism financing risks. (c) A strong compliance culture, good governance and observance of high ethical standards in the conduct of business are good foundations for an effective AML/CTF regime. It will be developed and sustained through capacity building and deterrence of violations through imposition of appropriate, proportionate and dissuasive sanctions. (d) A sound risk management system to identify, assess, mitigate, monitor, and control risks associated with money laundering/terrorism financing is essential. (e) Timely and effective domestic and international cooperation and established coordination mechanism are critical in the investigation and prosecution of money laundering/terrorism financing and associated unlawful activities. (f) The implementation of AML laws, rules and regulations shall conform to international AML/CTF standards and best practices. (j) The observance of the constitutional requirements on due process, and injunction against ex post facto laws and bills of attainder. RULE 2 – DEFINITION OF TERMS Section 1. Definitions. For purposes of this IRR, the following terms are hereby defined as follows: (a) “Account” refers to a bank account, electronic money account, investment account, insurance policy, membership account, and other similar contract or service agreement, business or professional relationships between a covered person and its customers where funds or any monetary instrument of the latter are held by the former. (b) “Anti-Money Laundering Act” (AMLA) refers to Republic Act No. 9160, as amended by Republic Act Nos. 9194, 10167, 10365, and 10927 [and 11521]. (c) “Anti-Money Laundering Council” (AMLC) refers to the Philippines’ central AML/CTF authority and financial intelligence unit, which is the government instrumentality Page 5 of 106  mandated to implement the AMLA and TFPSA. It also refers to the official name of the Council, which is the governing body of the said government agency. For purposes of this IRR, the government agency shall be referred hereafter as the “AMLC”, while the governing body shall be referred hereafter as the “Council”. (d) “Appropriate Government Agency” (AGA) refers to the Philippine Amusement and Gaming Corporation (PAGCOR), Cagayan Economic Zone Authority (CEZA), Aurora Pacific Economic Zone and Freeport Authority (APECO), or other government agency, as may be determined by law, which may authorize casinos to engage in gaming operations. (e) “Asset” refers to a monetary instrument, property, or both. (f) “Asset Preservation Order” (APO) refers to a provisional remedy aimed at preserving monetary instruments or properties in any way related to an unlawful activity or money laundering offense defined herein, during the pendency of civil forfeiture proceedings. (g) “Average Due Diligence” (ADD) refers to the normal level of customer due diligence that is appropriate in cases where there is medium risk of money laundering or terrorism financing. (h) “Bangko Sentral ng Pilipinas” (BSP) refers to the central bank of the Republic of the Philippines established pursuant to the provisions of the 1987 Constitution and Republic Act No. 7653. (i) “Bank Inquiry” (BI) refers to a provisional remedy that allows the AMLC to examine or inquire into particular bank accounts or investment with a bank or non-bank financial institution, notwithstanding the provisions of Republic Act No. 1405, as amended; Republic Act No. 6426, as amended; Republic Act No. 8791; and other bank secrecy laws. (j) “Bearer Negotiable Instruments” (BNIs) refers to monetary instruments in bearer form such as, traveler’s checks; negotiable instruments, including checks, promissory notes and money orders, that are either in bearer form, endorsed without restriction, made out to a fictitious payee, or otherwise in such form that title thereto passes upon delivery; and incomplete instruments, including checks, promissory notes and money orders, signed, but with the payee’s name omitted. (k) “Bearer Shares” refers to negotiable instruments that accord ownership in a juridical person to the person who possesses the bearer share certificate. (l) “Beneficial Owner” refers to any natural person who: (1) Ultimately owns or controls the customer and/or on whose behalf a transaction or activity is being conducted; (2) Has ultimate effective control over a juridical person or legal arrangement; or (3) Owns, at least, twenty percent (20%) shares, contributions or equity interest in a juridical person or legal arrangement. Page 6 of 106  Control includes whether the control is exerted by means of trusts, agreements, arrangements, understandings, or practices, and whether or not the individual can exercise control through making decisions about financial and operating policies. (m) “Beneficial Ownership Verification” (BOV) is the process of taking reasonable measures to identify and verify the beneficial owner, including the determination of the true nature of the beneficial owner’s capacities and duties vis-à-vis his agent, nominee or trustee. (n) “Beneficiary” refers to: (1) General: any person for whose benefit an account was created or transaction was made. (2) For trust agreements: any person for whose benefit the trust has been created. (3) For life insurance or investment-linked insurance policies: any person who will be paid the policy proceeds. (4) For wire transfers: refers to a person or legal arrangement who is identified by the originator as the receiver of the requested wire transfer. (n) “Beneficiary Financial Institution” refers to the financial institution, which receives the wire transfer from the originating/ordering financial institution, directly or through an intermediary financial institution, and makes the funds available to the beneficiary. (o) “Biometric Information” refers to front facing photograph, fingerprint, iris scan, and/or such other unique identifiable features of an individual. (p) “Casino” refers to a business authorized by the appropriate government agency to engage in gaming operations. (q) “Casino Cash Transaction” refers to transactions involving the receipt of cash by a casino paid by or on behalf of a customer; or transactions involving the payout of cash by a casino to a customer or to any person in his behalf. (r) “Civil Forfeiture” (CF) refers to the non-conviction-based proceedings aimed at forfeiting, in favor of the government, monetary instruments or properties related to an unlawful activity or money laundering offense defined herein. (s) “Close Relationship/Associate” refers to persons who are widely and publicly known, socially or professionally, to maintain a particularly close relationship with the PEP, and include persons who are in a position to conduct substantial domestic and international financial transactions on behalf of the PEP. (t) “Correspondent Banking” refers to the provision of banking services by one bank, called the correspondent bank, to another bank, called the respondent bank. (u) “Company Service Provider” (CSP) refers to a person engaged in the business of providing the following services for customers, who need to perform or offer a service Page 7 of 106  or activity, but are not capable of doing or do not want to do so directly due to financial or operational reasons, or business judgment: (1) acting as a formation agent of juridical persons; (2) 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; (3) providing a registered office; business address or accommodation, correspondence or administrative address for a company, a partnership or any other juridical person or legal arrangement; and (4) acting as (or arranging for another person to act as) a nominee shareholder for another person. (v) “Cover Payment” refers to a wire transfer that combines a payment message sent directly by the originating/ordering financial institution to the beneficiary financial institution with the routing of the funding instruction, called the cover, from the originating/ordering financial institution to the beneficiary financial institution through one or more intermediary financial institutions. (w) “Covered Transaction” refers to: (1) A transaction in cash or other equivalent monetary instrument exceeding Five Hundred Thousand pesos (PHP500,000.00). (2) A transaction with or involving jewelry dealers, dealers in precious metals and dealers in precious stones in cash or other equivalent monetary instrument exceeding One Million pesos (Php1,000,000.00). (3) A casino cash transaction exceeding Five Million Pesos (PHP5,000,000.00) or its equivalent in other currency. (4) A cash transaction with or involving real estate developers or brokers exceeding Seven Million Five Hundred Thousand Pesos (P7,500,000.00) or its equivalent in any other currency.3 (x) “Covered Transaction Report” (CTR) refers to a report on a covered transaction, as herein defined, filed by a covered person before the AMLC. (y) “Cross-Border Wire Transfer” refers to any wire transfer where the originating and/or beneficiary financial institutions are located in different countries. It shall also refer to any chain of wire transfers in which, at least, one of the financial institutions involved is located in a different country. (z) “Customer/Client” refers to any person who keeps or maintains an account, or otherwise transacts business with a covered person. It includes the following: 3 New subsection, Section 2 of AMLC Regulatory Issuance A, B and C No. 1, Series of 2021, which took effect on 31 January 2021. Page 8 of 106  (1) Beneficial owner, or any natural person who ultimately owns or controls a customer and/or on whose behalf an account is maintained or a transaction is conducted; (2) Transactors, agents and other authorized representatives of beneficial owners; (3) Beneficiaries of trusts, investment and pension funds, insurance policies, and remittance transactions; (5) Persons whose assets are managed by an asset manager; (5) trustors/grantors/settlors of a trust; (6) Insurance policy holders, whether actual or prospective; and (7) Juridical person. For purposes of this Rule, the term juridical person shall refer to an entity other than a natural person as defined under the Civil Code of the Philippines, including corporate clients who keep or maintain an account with a covered person.4 (aa) “Customer Due Diligence” (CDD) refers to the procedure of identifying and verifying the true identity, of customers, and their agents and beneficial owners, including understanding and monitoring of their transactions and activities. (bb) “Customer Identification Process” (CIP) refers to the process of determining the identity of the customer vis-à-vis the valid and acceptable identification document submitted to, and/or presented before, the covered person. (cc) “Customer Verification Process” (CVP) refers to the process of validating the truthfulness of the information, and confirming the authenticity of the identification documents, presented, submitted and provided by the customer; or other ways of verifying the identity and assessing the risk profile of customers, and their agents and beneficial owners, through the use of reliable and independent sources, documents, data or information. 4 Amended, Section 1 of AMLC Regulatory Issuance A, B and C No. 1, Series of 2020, which took effect on 31 January 2020. Original provision reads as follows: “ ‘Customer/Client’ refers to…: (1) …; (2) …; (3) …; (4) …; (5) …; and (6) ….” Page 9 of 106 (dd) “Dealer in Precious Metals and Stones/Jewelry Dealer” refers to an individual or entity who buys and/or sells precious metals, precious stones, and/or jewelry in the course of its business activities. The purchases or sales of precious metals, precious stones, and/or jewelry, as referred to herein, exclude those carried out for, connected with, or for the purpose of extracting precious metals or precious stones from a mine, or cutting or polishing precious stones. (ee) “Designated Non-Financial Businesses and Professions” (DNFBP) refer to businesses and professions, which are not under the supervision or regulation of the BSP, SEC and IC, and designated as covered persons under the AMLA. (ff) “Determination of the Purpose of Relationship” (DPR) refers to the process of identifying the purpose and intended nature of the account, transaction, or business or professional relationship. (gg) “Domestic Wire Transfer” refers to any wire transfer where the originating and beneficiary financial institutions are located in the same country. It shall refer to any chain of wire transfers that takes place entirely within the borders of a single country, even though the system used to transfer the payment message may be located in another country. (hh) “Demographic Data” refers to a person’s full name, sex, date and place of birth, address, citizenship or nationality, and such other personal information from which the identity of a person can be ascertained. (ii) “Enhanced Due Diligence” (EDD) refers to the enhanced level of scrutiny intended to provide a more comprehensive understanding of the risks associated with the client, as well as confirmation of factual information provided by the client, to mitigate risks presented. (jj) “Financial Intelligence” refers to the gathering and analysis of information about the transactions and financial activities of persons of interest, to understand their nature and capabilities, and predict their future actions. It may also refer to intelligence information, which is the result of the analysis of the information gathered. (kk) “Financial Intelligence Unit” (FIU) refers to the national center for the receipt and analysis of: (a) suspicious transaction reports; and (b) other information relevant to ML/TF and associated unlawful activities, and for the dissemination of the results of that analysis. (ll) “Financial Investigation” refers to an inquiry into the financial affairs of persons related to ML/TF and associated unlawful activity, with a view to: (1) identifying the extent of criminal networks and/or the scale of criminality; (2) identifying and tracing the proceeds and instrumentalities of crime, terrorism funds or any other assets that are, or may become, subject to forfeiture proceedings; and (3) developing and/or gathering of evidence which can be used in litigation of cases. Page 10 of 106  (mm) “Freeze Order” (FO) refers to a provisional remedy aimed at blocking or restraining monetary instruments or properties in any way related to an unlawful activity, as herein defined, from being transacted, converted, concealed, moved or disposed without affecting the ownership thereof. (nn) “Gaming Operations” refers to games of chance and variations thereof offered by casinos, and approved by the AGA under their enabling laws and other applicable issuances. It shall exclude: (1) Traditional bingo operations authorized by the AGA; (2) Lotteries and sweepstakes of the Philippine Charity Sweepstakes Office; and (3) Such other games of chance and variations as may be declared exempt by the AGA based on the result of their risk assessment, in consultation with AMLC. (oo) “Identification and Verification of Agents” (IVA) refers to the process of establishing and recording the true and full identity and existence of an agent, nominee, trustee or other authorized representatives who is acting as an account holder or transactor, and other person who is acting in behalf of a beneficial owner or principal, including verifying the validity of the authority of the agent, nominee, trustee, or authorized representative. (pp) “Identification Data” refers to both the identification information and identification document, as herein defined. (qq) “Identification Document” (ID) refers to any of the following evidence of identity: (1) For Filipino citizens:5 (a) PhilID; (b) Other identification documents issued by the Government of the Republic of the Philippines, including its political subdivisions, agencies, and instrumentalities; and (c) Other identification documents that can be verified using reliable, independent source documents, data or information. (2) For foreign nationals: (a) PhilID, for resident aliens; (b) Passport; (c) Alien Certificate of Registration; and 5 Amended, Section 14 of AMLC Regulatory Issuance A, B and C No. 1, Series of 2020, which took effect on 31 January 2020. Original provision reads as follows: “For Filipino citizens: Those issued by any of the following official authorities: ” Page 11 of 106  (d) Other identification documents issued by the Government of the Republic of the Philippines, including its political subdivisions, agencies, and instrumentalities. (3) For Filipino students: (a) PhilID; (b) School ID signed by the school principal or head of the educational institution; and (c) Birth Certificate issued by the Philippine Statistics Authority; and (4) For low risk customers: Any document or information reduced in writing which the covered person deems sufficient to establish the client’s identity. (rr) “Identification Information/Personal Information” refers to the demographic data and biometric information of a natural person, or information about a juridical person or legal arrangement, from which the identity of a person is apparent or can be reasonably and directly ascertained by the person holding the information, or when put together with other information would directly and certainly identify a person. (ss) “Immediate Family Member” refers to individuals related to the PEP within the second degree of consanguinity or affinity. (tt) “Independent Legal/Accounting Professional” refers to lawyers/accountants working in a private firm or as a sole practitioner who, by way of business or occupation, provides purely legal or accounting services to their clients. (uu) “Information and Communication Technology” (ICT) refers to the totality of electronic means to access, create, collect, store, process, receive, transmit, present and disseminate information. (vv) “Institutional Risk Assessment” refers to a comprehensive exercise to identify, assess and understand a covered person’s ML/TF threats, vulnerabilities and the consequential risks, with a view to mitigate illicit flow of funds and transactions. (ww) “Instrumentality” refers to any monetary instrument or property used to finance, operate, and/or maintain an unlawful activity. This definition is in relation to “monetary instrument or property related to unlawful activity. (xx) “Insurance Commission” (IC) refers to the Philippines’ regulator of the insurance and pre-need industries. (yy) “Intermediary Financial Institution” refers to a financial institution in a serial payment or cover payment chain that receives and transmits a wire transfer on behalf of the ordering financial institution and the beneficiary financial institution, or another intermediary financial institution. Page 12 of 106 (zz) “Internet-Based Casino” refers to casinos in which persons participate by the use of remote communication facilities such as, but not limited to, internet, telephone, television, radio or any other kind of electronic or other technology for facilitating communication. (aaa) “Jewel” refers to organic substances that have a market-recognized gem level of quality, beauty and rarity, such as pearl, amber and coral. (bbb) “Jewelry” refers to finished goods deriving fifty percent (50%) or more of their value from jewels, precious metals or precious stones constituting, forming part of, or attached to said finished goods. (ccc) “Law Enforcement Agency” (LEA) refers to the Philippine National Police, National Bureau of Investigation, and other government agencies that are responsible for the prevention, investigation, apprehension, and/or detention of individuals suspected of, or convicted for, violations of criminal laws. (ddd) “Materially-linked Accounts” refer to: (1) All accounts or monetary instruments under the name of the person whose accounts, monetary instruments, or properties are the subject of the freeze order or an order of inquiry; (2) All accounts or monetary instruments held, owned, or controlled by the owner or holder of the accounts, monetary instruments, or properties subject of the freeze order or order of inquiry, whether such accounts are held, owned or controlled singly or jointly with another person; (3) All “In Trust For” accounts where either the trustee or the trustor pertains to a person whose accounts, monetary instruments, or properties are the subject of the freeze order or order of inquiry; (4) All accounts held for the benefit or in the interest of the person whose accounts, monetary instruments, or properties are the subject of the freeze order or order of inquiry; (5) All accounts of juridical persons or legal arrangements that are owned, controlled or ultimately effectively controlled by the natural person whose accounts, monetary instruments or properties are subject of the freeze order or order of inquiry, or where the latter has ultimate effective control; and (6) All other accounts, shares, units, or monetary instruments that are similar, analogous, or identical to any of the foregoing. (eee) “Monetary Instrument” refers, but is not limited, to the following: (1) Coins or currency of legal tender of the Philippines, or of any other country; (2) Credit instruments, including bank deposits, financial interest, royalties, commissions, and other intangible property; (3) Drafts, checks, and notes; Page 13 of 106  (4) Stocks or shares, participation or interest in a corporation or in a commercial enterprise or profit-making venture and evidenced by a certificate, contract, instrument, whether written or electronic in character, including those enumerated in Section 3 of the Securities Regulation Code; (5) A participation or interest in any non-stock, non-profit corporation; (6) Securities or negotiable instruments, bonds, commercial papers, deposit certificates, trust certificates, custodial receipts, or deposit substitute instruments, trading orders, transaction tickets, and confirmations of sale or investments and money market instruments; (7) Contracts or policies of insurance, life or non-life, contracts of suretyship, pre- need plans, and member certificates issued by mutual benefit association; and (8) Other similar instruments where title thereto passes to another by endorsement, assignment, or delivery. (fff) “Monetary Instrument or Property Related to an Unlawful Activity” refers to: (1) All proceeds of an unlawful activity; (2) All instrumentalities of an unlawful activity, including all moneys, expenditures, payments, disbursements, costs, outlays, charges, accounts, refunds, and other similar items for the financing, operations, and maintenance of any unlawful activity; (3) All monetary instruments or property, including monetary, financial or economic means, devices, accounts, documents, papers, items, objects or things, used in or having any relation to any unlawful activity or money laundering, regardless of the current owner or possessor, and circumstances of ownership or acquisition; and (4) For purposes of freeze order and bank inquiry order: related and materially- linked accounts. (ggg) “Money Laundering” (ML) refers to the crime defined under Section 4 of the AMLA. (hhh) “Money Laundering/Terrorism Financing Prevention Program” (MTPP) refers to a covered person’s comprehensive, risk-based, and written internal policies, controls and procedures to implement the relevant laws, rules and regulations, and best practices to prevent and combat ML/TF and associated unlawful activities in the operational level. (iii) “Money or Value Transfer Service” (MVTS) refers to financial services that involve the acceptance of cash, checks, other monetary instruments or other stores of value, and the payment of a corresponding sum in cash or other form to a beneficiary by means of a communication, message, transfer, or through a clearing network to which the service provider belongs. Page 14 of 106  (jjj) “Mutual Legal Assistance” (MLA) refers to the formal method of cooperation between two jurisdictions for purposes of seeking assistance in the production of documents, asset freezing and forfeiture, extradition, enforcement of foreign judgment, and other kinds of legal assistance in criminal matters. (kkk) “National Risk Assessment” (NRA) refers to a comprehensive exercise to identify, assess and understand a country’s ML/TF threats, vulnerabilities and the consequential risks, with a view to mitigate illicit flow of funds and transactions. (lll) “Non-Profit Organization” (NPO) refers to a juridical person, legal arrangement or organization that primarily engages in raising or disbursing funds for purposes such as charitable, religious, cultural, educational, social or fraternal purposes, or for the carrying of other types of “good works”. (mmm) “Offender” refers to any person who commits a money laundering offense. (nnn) “Offshore Gaming Operator” (OGO) refers to an entity engaged in offering online games of chance or sporting events via the internet using a network and software program, by themselves or through local service providers.6 (ooo) “Offshore Gaming Operator Service Provider” (OGO-SP) refers to a duly constituted business corporation who provides components of offshore gaming operations to offshore gaming operators.7 (ppp) “Ongoing Monitoring Process” (OMP) refers to the process of conducting continuing due diligence, including continually assessing the risks, understanding the transactions and activities, and updating, based on risk and materiality, the identification information and/or identification documents, of customers, their agents and beneficial owners. (qqq) “Originating/Ordering Financial Institution” refers to the financial institution, which initiates the wire transfer and transfers the funds upon receiving the request for a wire transfer on behalf of the originator. (rrr) “Originator” refers to the account holder who allows the wire transfer from that account or where there is no account, the person that places an order with the originating/ordering financial institution to perform a wire transfer. (sss) “Other Government Agency” (OGA) refers to a government agency that is not an SA, AGA or LEA. (ttt) “Parallel Financial Investigation” refers to conducting a financial investigation or investigation into the ML/TF aspect of a case alongside, or in the context of, the investigation into the associated unlawful activity. (uuu) “Payable-through Accounts” refers to correspondent accounts that are used directly by third parties to transact business on their own behalf. 6 New provision, Section 2 of AMLC Regulatory Issuance A, B and C No. 1, Series of 2021, which took effect on 31 January 2021. 7 New provision, Section 2 of AMLC Regulatory Issuance A, B and C No. 1, Series of 2021, which took effect on 31 January 2021. Page 15 of 106 (vvv) “Person/Entity” refers to any natural or juridical person. (www) “Philippine Identification Card” (PhilID) refers to the non-transferrable identification card issued by the Philippine Statistics Authority (PSA) to all citizens and resident aliens registered under the Philippine Identification System. It shall serve as the official government-issued identification document of cardholders in dealing with all government agencies, local government units, government and controlled corporations, government financial institutions, and all private sector entities. (xxx) “Philippine Identification System” (PhilSys) refers to the Philippine Government’s central identification platform, established under Republic Act No. 11055, otherwise known as the “Philippine Identification System Act” (PhilSys Act), for all citizens and resident aliens of the Philippines. (yyy) “PhilSys Number” (PSN) refers to the randomly generated, unique and permanent identification number assigned to every citizen or resident alien, upon birth or registration, by the PSA. (zzz) “Politically-Exposed Person” (PEP) refers to an individual who is or has been entrusted with prominent public position in (a) the Philippines with substantial authority over policy, operations or the use or allocation of government-owned resources; (b) a foreign State; or (c) an international organization. (aaaa) “Precious Metals” refers to gold, silver, platinum, palladium, rhodium, ruthenium, iridium, and osmium at a level of purity of five hundred (500) parts per one thousand (1,000), singly or in any combination, and alloys of precious metals, solders, and plating chemicals, such as rhodium and palladium plating solutions, potassium gold cyanide containing at least sixty-eight and three-tenths percent (68.3%) gold, potassium silver cyanide containing at least sixty-eight percent (68%) silver and silver cyanide in salt solution containing at least fifty-four percent (54%) silver. (bbbb) “Precious Stones” refers to all gems and stones used in jewelry making, such as gemstones, jewels, and those substances that have market-recognized gem level of quality, beauty, and rarity, such as diamond, corundum (including rubies and sapphires), beryl (including emeralds and aquamarines), chrysoberyl, spinel, topaz, zircon, tourmaline, garnet, crystalline and cryptocrystalline quartz, olivine peridot, tanzanite, jadeite jade, nephrite jade, spodumene, feldspar, turquoise, lapis lazuli, opal and pearl. (cccc) “Probable Cause” refers to such facts and circumstances which would lead a reasonably discreet, prudent, or cautious man to believe that: (1) any monetary instrument or property sought to be frozen, inquired into or preserved is in any way related to any unlawful activity and/or money laundering offense; or (2) ML/TF has been committed and that the respondent is probably guilty thereof. (dddd) “Proceeds” refers to an amount derived or realized from any unlawful activity, as herein defined. Page 16 of 106  (eeee) “Proliferation of Weapons of Mass Destruction” refers to the manufacture, acquisition, possession, development, export, trans-shipment, brokering, transport, transfer, stockpiling or use of weapons of mass destruction, in contravention of national laws or, where applicable, international obligations.8 (ffff) “Proliferation of Weapons of Mass Destruction Financing/Proliferation Financing” (PF) refers when a person: (1) makes available an asset; or (2) provides a financial service; or (3) conducts a financial transaction; and the person knows that, or is reckless as to whether, the asset, financial service or financial transaction is intended to, in whole or in part, facilitate proliferation of WMD in relation to UNSC Resolution Nos. 1718 of 2006 and 2231 of 2015.9 (gggg) “Property” refers to any thing or item of value, real or personal, tangible or intangible, or any interest therein, or any benefit, privilege, claim, or right with respect thereto, including: (1) Personal property, including proceeds derived therefrom, or traceable to any unlawful activity, as herein defined, such as, but not limited to: (a) Cash; (b) Jewelry, precious metals and stones, and other similar items; (c) Works of art, such as paintings, sculptures, antiques, treasures, and other similar precious objects; (d) Perishable goods; and (e) Vehicles, vessels, aircraft, or any other similar conveyance. (2) Personal property, used as instrumentalities in the commission of any unlawful activity, as herein defined, such as: (a) Computers, servers, and other electronic information and communication systems; and (b) Any conveyance, including any vehicle, vessel, and aircraft. (3) Real estate, improvements constructed or crops growing thereon, or any interest therein, standing upon the record of the registry of deeds or local government unit in the name of the party against whom the freeze order or asset preservation order is issued, or not appearing at all upon such records, or 8 New provision, Section 2 of AMLC Regulatory Issuance A, B and C No. 1, Series of 2021, which took effect on 31 January 2021. 9 New provision, Section 2 of AMLC Regulatory Issuance A, B and C No. 1, Series of 2021, which took effect on 31 January 2021. Page 17 of 106  not belonging to the party against whom the freeze order or asset preservation order is issued and held by any other person, or standing on the records of the registry of deeds or local government unit in the name of any other person, but are: (a) derived from, or traceable to, any unlawful activity; or (b) used as an instrumentality in the commission of any unlawful activity, as herein defined. (hhhh) “Purely Legal/Accounting Service” refers to: (1) Rendition of purely litigation, notarial, legal counseling, and/or other services that can only be undertaken by a lawyer, as a professional; or (2) Rendition of purely accounting, auditing and/or other services that can only be undertaken by a certified public accountant, as a professional. (iiii) “Relationship” refers to business or professional relationship between the covered person and its customer. (jjjj) “Request for Information” (RFI) refers to a request for information by FIUs, LEAs and OGAs, whether domestic or foreign, for intelligence or investigative purposes only. (kkkk) “Real Estate” refers to the land and all those items which are attached to the land. It is the physical, tangible entity, together with all the additions or improvements on, above or below the ground.10 (llll) “Real Estate Broker” refers to a duly registered and licensed natural person who, for a professional fee, commission or other valuable consideration, acts as an agent of a party in a real estate transaction to offer, advertise, solicit, list, promote, mediate, negotiate or effect the meeting of the minds on the sale, purchase, exchange, mortgage, lease or joint venture, or other similar transactions on real estate or any interest therein.11 (mmmm) “Real Estate Developer” refers to any natural or juridical person engaged in the business of developing real estate development project for his/her or its own account and offering them for sale or lease.12 (nnnn) “Realty Transaction” refers to a real estate transaction involving an amount in excess of Five Hundred Thousand Pesos (PHP500,000.00). (oooo) “Realty Transaction Report” (RTR) refers to a report, including copies of the relevant documents, on a realty transaction, as herein defined, filed by the Land Registration Authority and all its Registry of Deeds, before the AMLC. 10 New provision, Section 2 of AMLC Regulatory Issuance A, B and C No. 1, Series of 2021, which took effect on 31 January 2021. 11 New provision, Section 2 of AMLC Regulatory Issuance A, B and C No. 1, Series of 2021, which took effect on 31 January 2021. 12 New provision, Section 2 of AMLC Regulatory Issuance A, B and C No. 1, Series of 2021, which took effect on 31 January 2021. Page 18 of 106  (pppp) “Reduced Due Diligence” (RDD) refers to the lowest level of customer due diligence that is appropriate in cases where there is low risk of money laundering or terrorism financing. (qqqq) “Related Account” refers to an account, the funds and sources of which directly originated from and/or are materially-linked to the monetary instruments or properties subject of the freeze order or an order of inquiry.13 (rrrr) “Risk” refers to risk of loss arising from ML/TF activities. (ssss) “Strategic Trade Management Act” (STMA) refers to Republic Act No. 10697.14 (tttt) “Strategic Trade Management Office” (STMO) refers to the bureau under the administrative supervision of the Department of Trade and Industry (DTI) which serves as the executive and technical agency of the national government for the establishment of the management systems for the trade in strategic goods.15 (uuuu) “Risk-Based Approach” refers to the process by which countries, competent authorities, and covered persons identify, assess, and understand the ML/TF risks to which they are exposed, and take the appropriate mitigation measures in accordance with the level of risk. This includes prioritization and efficient allocation of resources by the relevant key players and stakeholders in applying AML/CTF measures in their operations in a way that ensures that they are commensurate with the risks involved. (vvvv) “Sectoral Risk Assessment” refers to a comprehensive exercise to identify, assess and understand an industry’s, or business or professional sector’s, threats, vulnerabilities and the consequential risks, with a view to mitigate illicit flow of funds and transactions. (wwww) “Securities and Exchange Commission” (SEC) refers to the Philippines’ company register and regulator of the securities industry. (xxxx) “Serial Payment” refers to a direct sequential chain of payment where the wire transfer and accompanying payment message travel together from the originating/ordering financial institution to the beneficiary financial institution, directly or through one or more intermediary financial institutions. (yyyy) “Shell Bank” refers to a bank that has no physical presence in the country in which it is incorporated and licensed, and which is unaffiliated with a regulated financial group that is subject to effective consolidated supervision. 13 Amended, Section 13 of AMLC Regulatory Issuance A, B and C No. 1, Series of 2020, which took effect on 31 January 2020. Original provision reads as follows: “‘Related Account’ refers to an account, the funds and sources of which originated from and/or are materially-linked to the monetary instruments or properties subject of the freeze order or an order of inquiry, regardless of the layer of accounts that the funds had passed through or transactions that they had undergone.” 14 New provision, Section 2 of AMLC Regulatory Issuance A, B and C No. 1, Series of 2021, which took effect on 31 January 2021. 15 New provision, Section 2 of AMLC Regulatory Issuance A, B and C No. 1, Series of 2021, which took effect on 31 January 2021. Page 19 of 106 (zzzz) “Ship-Based Casino” refers to casinos, the operation of which is undertaken on board a vessel, ship, boat or any other water-based craft wholly or partly intended for gambling. (aaaaa) “Source of Fund” refers to the origin of the funds or other monetary instrument that is the subject of the transaction, or business or professional relationship between a covered person and its customer, such as cash on hand, safety deposit box with a covered person, and a particular bank or investment account. (bbbbb) “Source of Wealth” refers to the resource from which the customer’s wealth, including all monetary instruments and properties, came, comes, or will come from, such as employment, business, investment, foreign remittance, inheritance, donation, and winnings. (ccccc) “Straight-through Processing” refers to payment transactions that are conducted electronically without the need for manual intervention. (ddddd) “Strategic Analysis” refers to the high-level macro analysis of data to decipher the underlying patterns and trends that would enable the AMLC to draw conclusions and develop long-term strategies for the prevention of ML/TF, and to provide input for policy formulation. (eeeee) “Substantial Evidence” refers to such level of evidence which a reasonable mind might accept as adequate to justify or support a conclusion that a specific violation was committed. (fffff) “Supervising Authority” (SA) refers to the BSP, the SEC, the IC, or other government agencies designated by law to supervise or regulate a particular financial institution or DNFBP. (ggggg) “Suspicious Circumstance” refers to any of the following circumstances, the existence of which makes a transaction suspicious: (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 AMLA; (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 ML/TF or related unlawful activity that is about to be committed, is being or has been committed; or Page 20 of 106  (7) any transaction that is similar, analogous or identical to any of the foregoing, such as the relevant transactions in related and materially-linked accounts, as herein defined. Any unsuccessful attempt to transact with a covered person, the denial of which is based on any of the foregoing circumstances, shall likewise be considered as suspicious transaction.16 (hhhhh) “Suspicion” refers to a person’s state of mind—based on his skills, experience, and/or understanding of the customer profile—which considers that there is a possibility that any of the suspicious circumstances exists. (iiiii) “Suspicious Transaction” refers to a transaction, regardless of amount, where any of the suspicious circumstances, as herein defined, is determined, based on suspicion or, if available, reasonable grounds, to be existing. (jjjjj) “Suspicious Transaction Report” (STR) refers to a report on a suspicious transaction, as herein defined, filed by a covered person before the AMLC. (kkkkk) “Tactical Analysis” refers to the analysis of data directed towards the short-term development of investigative priorities and deployment of resources, which include the analysis of time, space, offender, victim, and modus operandi for individual high- profile crimes, repeat incidents, and crime patterns, with a specific focus on crime series. (lllll) “Targeted Financial Sanctions” (TFS) refer to both asset freezing and prohibition to prevent funds or other assets from being made available, directly or indirectly, for the benefit of any individual, natural or legal persons or entity designated pursuant to UNSC resolutions and its designation process.17 (mmmmm) “Terrorism Financing” (TF) refers to the crime defined under Sections 4 of the TFPSA. (nnnnn) “Terrorism Financing Prevention and Suppression Act” (TFPSA) refers to Republic Act No. 10168. 16 Amended, Section 2 of AMLC Regulatory Issuance A, B and C No. 1, Series of 2020, which took effect on 31 January 2020. Original provision reads as follows: “‘Suspicious Circumstance’ refers to …: (1) …; (2) …; (3) …; (4) …; (5) …; (6) …; or (7) ….” 17 New provision, Section 2 of AMLC Regulatory Issuance A, B and C No. 1, Series of 2021, which took effect on 31 January 2021. Page 21 of 106  (ooooo) “Transaction” refers to any act establishing any right or obligation, or giving rise to any contractual or legal relationship between the covered person and its customer. It also includes any movement of funds, by any means, in the ordinary course of business of a covered person. (ppppp) “Trustee” refers to a person in whom confidence is reposed as regards property for the benefit of another person called the trustor/grantor/settlor. (qqqqq) “Trustor/Grantor/Settlor” refers to a person who establishes a trust, or who transfers ownership of his assets to a trustee by means of a trust deed or similar arrangement. (rrrrr) “Unique Transaction Reference Number” refers to a combination of letters, numbers or symbols, determined by the payment service provider, in accordance with the protocols of the payment and settlement system or messaging system used for the wire transfer. (sssss) “United Nations Security Council” (UNSC) refers to the principal organ of the United Nations that has primary responsibility for the maintenance of international peace and security.18 (ttttt) “Virtual Asset” refers to a digital representation of value that can be digitally traded, or transferred, and can be used for payment or investment purposes. (uuuuu) “Virtual Asset Provider” refers to any person who, as a business, conducts one or more of the following activities or operations for or on behalf of another person: (a) Exchange between virtual assets and fiat currencies; (b) Exchange between one or more forms of virtual assets; (c) Transfer (the conduct of a transaction on behalf of another person that moves a virtual asset from one one virtual asset address or account to another) of virtual assets; (d) Safekeeping and/or administration of virtual assets or instruments enabling control over virtual assets; and (e) Participation in and provision of financial services related to an issuer’s offer and/or sale of a virtual asset. (vvvvv) “Weapons of Mass Destruction” (WMD) refers to chemical, biological, radiological, or nuclear weapons which are capable of high order of destruction or causing mass casualties. It excludes the means of transporting or propelling the weapon where such means is a separable and divisible part from the weapon.19 18 New provision, Section 2 of AMLC Regulatory Issuance A, B and C No. 1, Series of 2021, which took effect on 31 January 2021. 19 New provision, Section 2 of AMLC Regulatory Issuance A, B and C No. 1, Series of 2021, which took effect on 31 January 2021. Page 22 of 106  (wwwww) “Wire Transfer” refers to any transaction carried out on behalf of an originator, through an originating/ordering financial institution, by electronic means, with a view to making an amount of funds available to a beneficiary at a beneficiary financial institution, irrespective of whether the originator and the beneficiary are the same person. RULE 3 – UNLAWFUL ACTIVITIES Section 1. Unlawful Activities. Unlawful activities refer to any act or omission, or series or combination thereof, involving or having direct relation, to the following: (a) “Kidnapping for Ransom” under Article 267 of Act No. 3815, otherwise known as the Revised Penal Code, as amended; (b) Sections 4, 5, 6, 8, 9, 10, 11, 12,13, 14, 15 and 16 of Republic Act No. 9165, otherwise known as the “Comprehensive Dangerous Drugs Act of 2002”; (c) Section 3 paragraphs b, c, e, g, h and i of Republic Act No. 3019, as amended, otherwise known as the “Anti-Graft and Corrupt Practices Act”; (d) “Plunder” under Republic Act No. 7080, as amended; (e) “Robbery” and “Extortion” under Articles 294, 295, 296, 299, 300, 301 and 302 of the Revised Penal Code, as amended; (f) “Jueteng” and “Masiao” punished as illegal gambling under Presidential Decree No. 1602; (g) “Piracy on the High Seas” under the Revised Penal Code, as amended, and Presidential Decree No. 532: (h) “Qualified Theft” under Article 310 of the Revised Penal Code, as amended; (i) “Swindling” under Article 315 and “Other Forms of Swindling” under Article 316 of the Revised Penal Code, as amended: (j) “Smuggling” under Republic Act No. 455, and Republic Act No. 1937, as amended, otherwise known as the “Tariff and Customs Code of the Philippines”; (k) Violations under Republic Act No. 8792, otherwise known as the “Electronic Commerce Act of 2000”; (l) “Hijacking” and other violations under Republic Act No. 6235, otherwise known as the “Anti- Hijacking Law”; “Destructive Arson”; and “Murder”, as defined under the Revised Penal Code, as amended; (m) “Terrorism” and “Conspiracy to Commit Terrorism”, as defined and penalized under Sections 3 and 4 of Republic Act No. 9372; Page 23 of 106 (n) “Financing of Terrorism” under Section 4 and offenses punishable under Sections 5, 6, 7 and 8 of Republic Act No. 10168, otherwise known as the “Terrorism Financing Prevention and Suppression Act of 2012”; (o) “Bribery” under Articles 210, 211 and 211-A of the Revised Penal Code, as amended, and “Corruption of Public Officers” under Article 212 of the Revised Penal Code, as amended; (p) “Frauds and Illegal Exactions and Transactions” under Articles 213, 214, 215 and 216 of the Revised Penal Code, as amended; (q) “Malversation of Public Funds and Property” under Articles 217 and 222 of the Revised Penal Code, as amended; (r) “Forgeries” and “Counterfeiting” under Articles 163, 166, 167, 168, 169 and 176 of the Revised Penal Code, as amended; (s) Violations of Sections 4 to 6 of Republic Act No. 9208, otherwise known as the “Anti- Trafficking in Persons Act of 2003, as amended”; (t) Violations of Sections 78 to 79 of Chapter IV of Presidential Decree No. 705, otherwise known as the “Revised Forestry Code of the Philippines, as amended”; (u) Violations of Sections 86 to 106 of Chapter IV of Republic Act No. 8550, otherwise known as the “Philippine Fisheries Code of 1998”; (v) Violations of Sections 101 to 107, and 110 of Republic Act No. 7942, otherwise known as the “Philippine Mining Act of 1995”; (w) Violations of Section 27(c), (e), (f), (g) and (i) of Republic Act No. 9147, otherwise known as the “Wildlife Resources Conservation and Protection Act”; (x) Violations of Section 7(b) of Republic Act No. 9072, otherwise known as the “National Caves and Cave Resources Management Protection Act”; (y) Violation of Republic Act No. 6539, otherwise known as the “Anti-Carnapping Act of 2002, as amended”; (z) Violation 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”; (aa) Violation of Presidential Decree No. 1612, otherwise known as the “Anti-Fencing Law”; (bb) Violation of Section 6 of Republic Act No. 8042, otherwise known as the “Migrant Workers and Overseas Filipinos Act of 1995, as amended”; (cc) Violation of Republic Act No. 8293, otherwise known as the “Intellectual Property Code of the Philippines, as amended”; (dd) Violation of Section 4 of Republic Act No. 9995, otherwise known as the “Anti-Photo and Video Voyeurism Act of 2009”; Page 24 of 106  (ee) Violation of Section 4 of Republic Act No. 9775, otherwise known as the “Anti-Child Pornography Act of 2009”; (ff) Violations of Sections 5, 7, 8, 9, 10 (c), (d) and (e), 11, 12 and 14 of Republic Act No. 7610, otherwise known as the “Special Protection of Children Against Abuse, Exploitation and Discrimination”; (gg) Fraudulent practices and other violations under Republic Act No. 8799, otherwise known as the “Securities Regulation Code of 2000”; (hh) Violation of Section 19 (A)(3) of Republic Act No. 10697, otherwise known as “The Strategic Trade Management Act”, in relation to Proliferation of WMD and PF pursuant to UNSC Resolution Nos. 1718 of 2006 and 2231 of 2015;20 (ii) Violations of Section 254 of Chapter II, Title X of the “National Internal Revenue Code of 1997”, as amended, where the deficiency basic tax due in the final assessment is in excess of Twenty-Five Million Pesos (P25,000,000.00) per taxable year, for each tax type covered and there has been a finding of probable cause by the competent authority: Provided, further, that there must be a finding of fraud, willful misrepresentation or malicious intent on the part of the taxpayer: Provided, finally, that in no case shall the AMLC institute forfeiture proceedings to recover monetary instruments, property or proceeds representing, involving, or relating to a tax crime, if the same has already been recovered or collected by the Bureau of Internal Revenue (BIR) in a separate proceeding;21 (jj) Felonies and offenses of a similar nature that are punishable under the penal laws of other countries.22 Section 2. Same Conduct Approach. In determining whether or not a felony or offense punishable under the penal laws of other countries is “of a similar nature” so as to constitute an unlawful activity under the AMLA, it is sufficient that both the Philippines and the other jurisdiction criminalize the conduct or activity underlying the offense, regardless of whether both countries place the offense within the same category, or denominate the offense under the same nomenclature. Section 3. Amendment and Repeal of Laws Prescribing the Details of the Unlawful Activities. 2.1. Any unlawful activity which law has been amended, by way of renaming, renumbering or rephrasing the relevant provisions thereof, shall continue to be an unlawful activity under the AMLA. Provided, that the material elements of the unlawful activity under the amendatory law remains the same with the amended law; or the unlawful activity, as defined under the amendatory law includes or is necessarily included in the unlawful activity under the amended law. 20 New provision, Section 3 of AMLC Regulatory Issuance A, B and C No. 1, Series of 2021, which took effect on 31 January 2021. 21 New provision, Section 3 of AMLC Regulatory Issuance A, B and C No. 1, Series of 2021, which took effect on 31 January 2021. 22 Amended, Section 3 of AMLC Regulatory Issuance A, B and C No. 1, Series of 2021, which took effect on 31 January 2021. Page 25 of 106 2.2. Any law repealing, superseding or replacing the law covering any unlawful activity defined herein, shall be construed as the continuation of the repealed, superseded or replaced law, which is the basis of the unlawful activity cited under the AMLA. Provided, that the new law provides the same elements as the unlawful activity under the repealed, superseded or replaced law. RULE 4 – COVERED PERSONS Section 1. Covered Persons. The following are the covered persons under the AMLA: (a) The following financial institutions: (1) Persons supervised and/or regulated by BSP, including their subsidiaries and affiliates, which are also covered persons, supervised and/or regulated by the BSP such as: (a) Banks; (b) Quasi-banks; (c) Trust entities (d) Pawnshops; (e) Non-stock savings and loan associations; (f) Other Non-bank financial institutions which under special laws are subject to BSP supervision and/or regulation; (g) Electronic money issuers; and (h) Foreign exchange dealers, money changers, and remittance and transfer companies. (2) Persons supervised or regulated by IC, such as: (a) Insurance companies; (b) Pre-need companies; (c) Insurance agents; (d) Insurance brokers; (e) Professional reinsurers; (f) Reinsurance brokers; (g) Holding companies; (h) Holding company systems; (i) Mutual benefit associations; and (j) All other persons and their subsidiaries and affiliates supervised or regulated by the IC. (3) Persons supervised or regulated by SEC, such as: (a) Securities dealers, brokers, salesmen, investment houses, and other similar persons managing securities or rendering services, such as investment agents, advisors, or consultants; (b) mutual funds or open-end investment companies, close-end investment companies or issuers, and other similar entities; and Page 26 of 106  (c) other entities, administering or otherwise dealing in commodities, or financial derivatives based thereon, valuable objects, cash substitutes, and other similar monetary instruments or properties, supervised or regulated by the SEC. (b) The following DNFBPs: (1) Jewelry dealers. (2) Dealers in precious metals, and dealers in precious stones. (3) Company service providers, which, as a business, provide any of the following services to third parties: (a) acting as a formation agent of juridical persons; (b) 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; (c) providing a registered office; business address or accommodation, correspondence or administrative address for a company, a partnership or any other juridical person or legal arrangement; and (d) acting as (or arranging for another person to act as) a nominee shareholder for another person. (4) Persons, including lawyers, accountants and other professionals, who provide any of the following services: (a) Managing of client money, securities or other assets; (b) Management of bank, savings, securities or other assets; (c) Organization of contributions for the creation, operation or management of companies; and (d) Creation, operation or management of juridical persons or arrangements, and buying and selling business entities. (5) Casinos, including internet-based casinos and ship-based casinos, with respect to their casino cash transactions related to their gaming operations. The “Casino Implementing Rules and Regulations of Republic Act No. 10927” shall govern the implementation of the AMLA with regard to casinos, unless, otherwise indicated therein by the AMLC and the AGAs. Page 27 of 106  (6) Real Estate Brokers and Developers.23 (7) Offshore Gaming Operators, as well as their service providers, supervised, accredited or regulated by the Philippine Amusement and Gaming Corporation (PAGCOR) or any AGA, as herein defined.24 Section 2. Primary Duties of Covered Persons. 2.1. Covered persons shall, comply with all the requirements under the AMLA and TFPSA, their respective IRR, and other AMLC issuances. They shall have the duty to cooperate with the AMLC in the, discharge of the latter’s mandate, and execution of its lawful orders and issuances, to protect their businesses or professions from being used in ML/TF activities. 2.2. The covered persons’ board of directors, partners or sole proprietors shall be ultimately responsible for the covered persons’ compliance with the AMLA and TFPSA, their respective IRR, and other AMLC issuances. Section 3. Market Entry. 3.1. Licensing or Registration with SAs. Covered persons shall secure a license or registration with the appropriate SAs, if any, or the appropriate government agency before they shall operate, as required by the laws covering their operations. 3.2. Registration with AMLC. All covered persons shall register with the AMLC. In line with this requirement, and consistent with their respective authorities, SAs, or other licensing or business registration authorities, shall prescribe registration with the AMLC as a requirement for continued licensing and/or operations of covered persons, and, when necessary, transacting with other covered persons. 3.3. Prohibition against Shell Banks. No shell bank shall be allowed to operate or be established in the Philippines. 3.4. Prevention of Criminals from Participating in the Affairs of Covered Persons. The AMLC and the SAs shall take the necessary legal or regulatory measures to prevent criminals or their associates from holding, or being the beneficial owner of, a significant or controlling interest, or holding a management function, in covered persons. 23 New provision, Section 4 of AMLC Regulatory Issuance A, B and C No. 1, Series of 2021, which took effect on 31 January 2021. 24 New provision, Section 4 of AMLC Regulatory Issuance A, B and C No. 1, Series of 2021, which took effect on 31 January 2021. Page 28 of 106  CHAPTER II SUPERVISION AND ENFORCEMENT RULE 5 – ANTI-MONEY LAUNDERING COUNCIL Section 1. The Government Instrumentality. 1.1. Implementing Agency. The AMLC is the independent government instrumentality mandated to implement the AMLA and TFPSA. 1.2. Operational Independence. The AMLC shall safeguard the integrity and independence of its operations, including its independent authority to do the following: (a) Carrying out its functions freely and without delay, including making decisions to analyze, request and/or share specific information without, interference by, or the need to seek permission of, other agency or office; (b) Making arrangements or engaging independently with SAs, LEAs and OGAs, or foreign jurisdictions on the exchange of information; (c) Determining the appropriate organizational structure and the functions of the different operating units of the agency to properly discharge its mandate; and (d) Obtaining and using the resources, consistent with existing laws and regulations, needed to carry out its functions, on an individual or routine basis, free from any undue political, government or industry influence or interference, which might compromise its operational independence. 1.3. Confidentiality and Security of Records and Premises. 1.3.1. The Council and the officers and staff of the AMLC shall securely protect information received or processed and shall not reveal, in any manner, any information known to them by reason of their office. This prohibition shall apply even after their separation from the AMLC.25 1.3.2. The AMLC shall formulate rules governing information exchange and dissemination, the security and confidentiality of such information, including procedures for handling, storage, 25 Amended, Section 5 of AMLC Regulatory Issuance A, B and C No. 1, Series of 2021, which took effect on 31 January 2021. Original provision reads as follows: “The AMLC shall, ensure the confidentiality of its records and the security of its systems, and limit access to its premises to authorized persons. Except the Commission on Audit, or by order of a competent court, no agency or office shall audit or examine the operations and premises of the AMLC, without the consent of the Council or its duly authorized representative. The AMLC shall establish an identification, monitoring and/or control system for non- AMLC personnel who will be allowed access to its premises.” Page 29 of 106  and protection of, as well as access to such information, office premises, records and information technology systems.26 1.4. Budget. The annual budget appropriated by Congress for the AMLC in the General Appropriations Act shall be used to defray capital outlays, as well as maintenance and operational expenses of the AMLC. Section 2. The Council. 2.1. Composition. The powers and functions of the AMLC shall be exercised by a Council composed of the following persons: (a) Chairperson - Governor of the BSP; (b) Member - Chairperson of the SEC; and (c) Member - Commissioner of the IC. 2.2. Acting Capacity. In case of absence, incapacity, resignation, expiration of term, retirement, or death of any member, the officer duly designated or authorized to discharge the functions of the Governor of the BSP, the Chairperson of the SEC, and the Commissioner of the IC, shall act in their stead in the Council. 2.3. Presiding Officer. The Chairperson shall serve as the presiding officer in all Council meetings and deliberations. In his absence, the officer duly designated or authorized to discharge the functions of the Governor of the BSP shall serve as the Acting Chairman of the Council. 2.4. Unity in All Actions. The Council shall act unanimously in the discharge of its functions. 2.5. Frequency and Mode of Meetings. The Council shall hold its meetings at such frequency and mode as it may deem appropriate. The date, time and venue of Council meetings shall be agreed in advance. 2.6. Documentation of Meetings. The AMLC shall maintain and preserve a complete record of the proceedings and deliberations of the Council, including the recordings and transcripts of the stenographic notes, either in their original, digital or electronic form. 26 New provision, Section 5 of AMLC Regulatory Issuance A, B and C No. 1, Series of 2021, which took effect on 31 January 2021. Page 30 of 106 Section 3. The Secretariat. 3.1. Establishment of the AMLC Secretariat. The Council shall establish and organize the AMLC Secretariat to assist in the discharge of its functions. The Council shall, in accordance with its authority, determine and provide for such operating units and other offices of the AMLC as may be necessary and appropriate for the proper and efficient conduct of the operations and the accomplishment of the objectives of the AMLC. The functions and duties of such operating units and other offices shall be determined by the Council. Provided, that the determination of the appropriate number and rank of its personnel shall be subject to the approval of the BSP’s Monetary Board. 3.2. Qualifications. In organizing the Secretariat, the Council shall appoint from those who have served, continuously or cumulatively, for, at least, five (5) years either in the BSP, the SEC or the IC. 3.3. Employment Status. All members of the Secretariat shall be considered full-time, permanent employees of the BSP. They shall be entitled to such benefits and subject to such rules and regulations as are applicable to BSP employees of similar rank. Provided, that to protect the independence of the AMLC and prevent the disruption of its operations, no member of the Secretariat shall be transferred, reassigned or otherwise removed from the AMLC without the prior approval of the Council. Section 4. The Executive Director. 4.1. Term of Office. The AMLC Secretariat shall be headed by an Executive Director who shall be appointed by the Council for a term of five (5) years. 4.2. Qualifications. The Executive Director shall, at the time of appointment, have the following qualifications: (a) Member in good standing of the Philippine Bar; (b) At least, thirty-five (35) years of age; (c) Have served, continuously or cumulatively, for, at least, five (5) years either at the BSP, the SEC or the IC; and (d) Of good moral character, unquestionable integrity, and known probity. 3.3. Employment Status. The Executive Director shall be considered a full-time, permanent employee of the BSP. He shall be entitled to such benefits and subject to such rules and regulations, as well as prohibitions, as are applicable to officers of similar rank in the BSP. Page 31 of 106 3.4. Officer-in-Charge. In case of absence, or temporary incapacity or disability of the Executive Director, any next-in-rank lawyer of the AMLC that is duly designated in accordance with existing administrative procedure, shall act in his stead as Officer-in-Charge. RULE 6 POWERS AND FUNCTIONS OF THE AMLC Section 1. Powers and Functions. A. Central AML/CTF Authority. 1.1. AML/CTF Supervisor and Enforcer. 1.1.1. The AMLC shall formulate and implement such measures as may be necessary and justified under the AMLA and TFPSA to counteract ML/TF, including, but not limited to, the following: (a) Spearheading the conduct of national risk assessment and evaluation of existing legal and operational frameworks, and formulation of national strategies to counteract ML/TF; (b) Formulation of policy directions for the AML/CTF regime of the Philippines; (c) Promulgation of implementing rules and regulations of the AMLA and TFPSA, and circulars, orders, guidelines, and other AML/CTF issuances; (d) Issuance of legal opinions and interpretations of the AMLA and TFPSA, and their respective IRR; (e) Conduct of onsite and offsite examination or other forms of compliance checking mechanism on covered persons to determine their level and quality of compliance with, the AMLA and TFPSA, their respective IRR, and other AMLC issuances; and (f) Analysis and use of intelligence information to detect, prevent and counteract ML/TF and associated unlawful activities. 1.1.2. The Council shall ensure that the provisions of the AMLA and TFPSA, their respective IRR, and other AMLC issuances are faithfully executed, and complied with by all public and private stakeholders. 1.2. Lead Agency on AML/CTF Matters. 1.2.1. The AMLC shall enlist the assistance of any branch, department, bureau, office, agency or instrumentality of the government, including government-owned and controlled corporations, in undertaking any and all AML/CTF operations, such as: (a) formulation of national strategies for a concerted and holistic government effort to combat ML/TF; Page 32 of 106  (b) conduct of parallel financial investigation and prosecution as part of domestic cooperation and coordination; (c) execution of requests for mutual legal assistance and other forms of international cooperation; (d) conduct of national risk assessment and mutual evaluation; and (e) conduct of capacity-building programs and information campaign. 1.2.2. Enlistment of assistance may include the use of personnel, facilities and resources of the enlisted party for the more resolute prevention, detection and investigation of ML/TF offenses and prosecution of offenders. 1.2.3. The AMLC may enlist the SAs to assist in checking compliance of covered persons under their respective jurisdictions on the requirements of the AMLA and TFPSA, their respective IRR, and other AMLC issuances, through monitoring, examination, inspection, audit, investigation, or such other fact-finding mechanism. Subject to the parameters set by the Council, the findings of the SAs shall be submitted to the AMLC for evaluation for possible sanctions against the covered persons, and their responsible directors, officers and employees, as may be warranted under the circumstances. 1.2.4. The AMLC may enlist the relevant SAs, LEAs and OGAs to assist the AMLC in investigation and other domestic coordination and cooperation efforts to counteract ML/TF. 1.3. Authority to Resolve Administrative Cases. 1.3.1. The AMLC shall, after due notice and hearing, impose administrative sanctions for the violation of the AMLA and TFPSA, their respective IRR, other AMLC issuances. 1.3.2. The “Rules on the Imposition of Administrative Sanctions under Republic Act No. 9160, as Amended” shall govern the administrative proceedings before the AMLC. 1.4. International Cooperation Advocate. 1.4.1. The AMLC shall receive and take action in respect of any request from foreign States for assistance in their own AML/CTF operations as provided in the AMLA. 1.4.2. The AMLC shall formulate clear and efficient processes for the timely prioritization and execution of requests for mutual legal assistance and international cooperation concerning ML/TF and the associated unlawful activities. 1.4.3. The AMLC shall ensure that its responsible unit for mutual legal assistance is provided with adequate financial, human and technical resources. The AMLC shall have in place processes to ensure that the staff in the said unit maintain high professional standards, including standards concerning confidentiality, and should be of high integrity and appropriately skilled. Page 33 of 106 1.5. AML/CTF Educator. 1.5.1. The AMLC shall develop educational programs, carry out capacity-building activities or offer training opportunities, and conduct awareness campaign on the pernicious effects, the methods and techniques used, and the viable means of preventing ML/TF and associated unlawful activities, and the effective ways of investigating, prosecuting and punishing offenders. 1.5.1. The AMLC shall develop an AML/CTF training system for public and private stakeholders, especially for the financial intelligence, investigation and legal personnel, on the fundamentals of ML/TF, the AMLA and TFPSA, and all requisite knowledge, skills, and abilities to be able to discharge their functions effectively. 1.5.2. The AMLC shall develop a mechanism for accreditation of subject matter experts to assist in the continuing training program of covered persons, and their responsible directors, officers and employees. B. Financial Intelligence Unit. 1.6. National Center for Receipt and Analysis of CTRs and STRs. 1.6.1. The AMLC shall require, receive and analyze CTRs and STRs from covered persons, in accordance with Rule 22 (Transaction Reporting) hereof.27 1.6.2. The AMLC shall formulate guidelines and develop protocols necessary to require covered persons to submit relevant information, consistent with existing laws, as part of CTRs and STRs. 1.6.3. The AMLC shall, as may be allowed by law, access all relevant financial, administrative and law enforcement information for a holistic financial intelligence analysis of CTRs and STRs. 1.6.4. The AMLC shall conduct tactical analysis, which uses available and obtainable information to identify specific targets, to follow the trail of particular activities or transactions, and to determine the relationship between monetary instruments and properties, and ML/TF and associated unlawful activities. 1.6.5. The AMLC shall conduct strategic analysis, which uses available and obtainable information, including data that may be provided by SAs, LEAs and OGAs, to identify ML/TF-related trends and patterns. 1.6.6. The AMLC shall develop a mechanism to use CTRs and STRs to identify, in a timely manner, whether natural or juridical person, or legal arrangement hold or control accounts, and to identify assets, without prior notification to the owner or holder. 1.6.7. The AMLC shall disseminate, spontaneously and upon request, information and the results of its analysis to LEAs, OGAs, foreign jurisdictions, covered persons, and relevant private entities; and shall use dedicated, secure and protected channels for 27 As amended by Section 6 of AMLC Regulatory Issuance A, B and C No. 1, Series of 2021, which took effect on 31 January 2021.Original provision reads as follows: “The AMLC shall require and receive CTRs and STRs from covered persons, in accordance with Rule 22 hereof.” Page 34 of 106  dissemination. The AMLC shall establish or adopt mechanisms for, and/or formulate guidelines on, exchange and dissemination of information.28 1.6.8. The AMLC shall protect the confidentiality of CTRs and STRs by: (a) having policies and procedures in place governing the security and confidentiality of information, including procedures for handling, storage, dissemination, and protection of, and access to, information; (b) ensuring that AMLC personnel have the necessary security clearance levels and understanding of their responsibilities in handling and disseminating sensitive and confidential information; and (c) ensuring that there is limited access to its facilities and information, including