Professional Documents
Culture Documents
Sec 3.
Whenever the Solicitor General shall
be informed of such unclaimed
balances, he shall commence an action
or actions in the name of the People of
the Republic of the Philippines in the
Court of First Instance of the province
or city where the bank, building and
loan association or trust corporation is
located.
Inclusion of parent
corporation
Even if a parent corporation,
partnership, association, entity or an
individual who owns or controls a
majority interest in such entities has
no liability to the bank, the Monetary
Board may prescribe the combination
of the liabilities of subsidiary
corporations or members of the
partnership, association, entity or such
individual under certain circumstances,
including but not limited to any of the
following situations:
Parent corporation, partnership, ANTI-MONEY LAUNDERING
association, entity or individual ACT
guarantees the repayment of the a) Salient features of AMLA
liabilities; o Criminalizes money laundering
Liabilities were incurred for the o Creates a Financial Intelligence
accommodation of the parent Unit (FIU)
corporation or another subsidiary o Imposes requirements on
or the partnership or association or customer identification, record-
entity or such individual; or keeping and reporting of
Subsidiaries through separate covered and suspicious
entities operate merely as transactions.
departments or divisions of a single o Relaxes strict bank deposit
entity. (Villanueva, 2009) secrecy laws
o Provides for freezing/ seizure/
Limits on loans and other forfeiture recovery of dirty
credit accommodations money/ property
(collaterals): o Provides for international
cooperation
Loans and other credit
accommodations against Real b) Declared policies
Estate shall not exceed 75% of the To protect and preserve the integrity
appraised value of the respective real and confidentiality of bank accounts
estate security, plus 60% of the and to ensure that the Philippines shall
appraised value of the insured not be used as a money laundering
improvements, and such loans may be site for the proceeds of any unlawful
made to the owner of the real estate or activity. Consistent with its foreign
to his assignees. Those against policy, the State shall extend
security of chattels and cooperation in transnational
intangible properties shall not investigations and prosecutions of
persons involved in money laundering b. Insurance companies, pre-need
activities wherever committed. companies and all other
persons supervised or regulated
c) Covered Transactions by the Insurance Commission;
Covered transaction (or threshold and
transaction) is a transaction in c. the following:
cash or other equivalent securities dealers, brokers,
monetary instrument involving a salesmen, investment houses
total amount in excess of five and other similar entities
managing securities or
hundred thousand pesos (P500,
rendering services as
000) within one banking/business investment agent, advisor, or
day. consultant,
Suspicious transactions are mutual funds, close-end
transactions with covered investment companies,
institutions, regardless of the common trust funds, pre-need
amount involved, where any of companies and other similar
the following circumstances exist: persons,
a. There is no underlying legal or other entities administering or
trade obligation, purpose or otherwise dealing in currency,
economic justification; commodities or financial
b. The client is not properly derivatives based thereon,
identified; valuable objects, cash
c. The amount involved is not substitutes and other similar
commensurate with the business monetary instruments or
or financial capacity of the client; property supervised or
d. Taking into account all known regulated by Securities and
circumstances, it may be Exchange Commission.
perceived that the clients d. Jewelry dealers in precious
transaction is structured in order metals, who trades in precious
to avoid being the subject of metals/stones, for transactions
reporting requirements under the in excess of P1,000,000
AMLA e. Company service providers
e. Any circumstance relating to the
which, as a business, provide
transaction which is observed to
deviate from the profile of the
any of the following services to
client and/or clients past third parties:
transactions with the covered Acting as a formation agent
institution; of juridical persons
f. The transaction is in any way Acting as a director or
related to an unlawful activity or corporate secretary of a
offense under AMLA, as company, a partner of a
amended, that is about to be, is partnership, or a similar
being or has been committed; or position in relation to other
g. Any transaction that is similar or juridical persons
analogous to any of the Providing a registered office,
foregoing. business address or
accommodation,
d) Covered institutions correspondence or
Covered persons, natural or juridical, administrative address for a
refer to: company, a partnership or
any other legal person or
a. Banks, quasi-banks, trust arrangement; and
entities, foreign exchange Acting as a nominee
dealers, pawnshops, money shareholder for another
changers, remittance and other person; and
similar entities and all other f. Persons who provide any of the
persons and their subsidiaries following services:
and affiliates supervised or Managing of client money,
regulated by the BSP; securities or other assets
Management of bank, Prohibition against Certain
savings or securities accounts Accounts: Covered institutions
shall maintain accounts only in
Organization of contributions the true and full name of the
for the creation, operation or
account owner or holder. The
management of companies
Creation, operation or provisions of existing laws to the
management of juridical contrary notwithstanding,
persons or arrangements, and anonymous accounts,
buying and selling business accounts under fictitious
entities. names, and all other similar
accounts shall be absolutely
Notwithstanding the foregoing, the prohibited. The BSP may
term covered persons shall conduct annual testing for the
exclude lawyers and accountants purpose of determining the
acting as independent legal existence and true identity of the
professionals in relation to owners of such accounts.
information concerning their clients or Prohibition against opening of
where disclosure of information would Accounts without Face-to- face
compromise client confidences or the Contact: No new accounts shall
attorney-client relationship. be opened and created without
face-to-face contact and full
e) Obligations of covered compliance with the
institutions requirements.
Prevention of Money Laundering: RECORD KEEPING: All records of all
CUSTOMER IDENTIFICATION: transactions of covered institutions
Covered institutions shall establish and shall be maintained and safely stored
record the true identity of its clients for (5) years from the date of
based on official documents. They shall transactions. Covered institutions shall
maintain a system of verifying the true prepare and maintain documentation,
identity of their clients and, in case of as to enable the AMLC, and/or the
corporate clients, require a system of courts to establish an audit trail for
verifying their legal existence and money laundering.
organizational structure, as well as the
authority and identification of all Existing and New Accounts - All
persons purporting to act on their records of existing and new
behalf. accounts and of new
Trustee, Nominee and Agent transactions shall be
Accounts: When dealing with maintained and safely stored
customers who are acting as for five (5) years from October
trustee, nominee, agent or in any 17,2001 or from the dates of
capacity for and on behalf of the accounts or transactions,
another, covered institutions shall whichever is later.
verify and record the true and full Closed Accounts - With respect
identity of the person(s) on whose to closed accounts, the records
behalf a transaction is being on customer identification,
conducted. In case a covered account files and business
institution has doubts as to correspondence shall be
whether such persons are being preserved and safely stored for
used as dummies in circumvention at least five (5) years from the
of existing laws, it shall dates when they were closed.
immediately make the necessary
inquiries to verify the status of the REPORTING OF COVERED AND
business relationship between the SUSPICIOUS TRANSACTIONS:
parties.
Covered institutions shall report to the appear to have originated from
AMLC all covered transactions within legitimate sources. It is committed by
(5) working days from occurrence the following:
thereof, unless the Supervising a. Any person knowing that any
Authority concerned prescribes a monetary instrument or property
longer period not exceeding (10) represents involves, or relates to
working days. the proceeds of any unlawful
Exemption from Bank Secrecy activity, transacts or attempts
Laws. - When reporting covered to transact said monetary
OR SUSPICIOUS transactions to instrument or property.
the AMLC, covered institutions b. Any person knowing that any
and their officers and monetary instrument or property
employees, shall not be involves the proceeds of any
deemed to have violated R.A. unlawful activity performs or fails
No. 1405, and other similar to perform any act as a result of
laws, but are prohibited from which he facilitates the offense
communicating, directly or of money laundering referred
indirectly, in any manner or to in paragraph (a) above.
by any means, to any c. Any person knowing that any
person, entity, the media, monetary instrument or property is
the fact that a covered or required under this Act to be
suspicious transaction disclosed and filed with the Anti-
report was made, the Money Laundering Council (AMLC),
contents thereof, or any other fails to do so.
information in relation thereto.
In case of violation thereof, the
concerned officer and employee g) Unlawful activities
of the covered institution, shall Kidnapping for ransom
be criminally liable. Drug Offenses
Confidentiality Provisions. - Graft and corrupt practices
When reporting covered Plunder
transactions or suspicious Robbery and extortion
transactions to the AMLC, Jueteng and masiao
covered institutions and their Piracy on the high seas
officers and employees, are Qualified theft
prohibited from communicating, Swindling
directly or indirectly the fact Smuggling
that a covered or suspicious Electronic consumer
transaction report was made. crimes
Neither may such reporting Terrorist acts: hijacking,
be published or aired in any destructive arson and
manner or form by the mass murder
media, electronic mail, or Securities fraud
other similar devices. In case Felonies and other similar
of violation thereof, the offenses punishable under
concerned officer, and penal laws of other
employee, of the covered countries
institution, or media shall be
held criminally liable. h) Jurisdiction
The regional trial courts shall have
f) Money laundering crime jurisdiction to try all cases on money
Money laundering is a crime whereby laundering. Those committed by public
the proceeds of an unlawful activity officers and private persons who are in
are transacted; thereby making them conspiracy with such public officers
shall be under the jurisdiction of the cause exists that any deposit or similar
Sandiganbayan. account is in any way related to an
unlawful activity, the AMLC may issue
i) Penalties and other a freeze order, which shall be effective
consequences immediately, on the account for a
Penalties for the Crime of Money period not exceeding 20 days.
Laundering.
a. imprisonment from 7-14 years o Notice to the depositor that his
and a fine of not less than account has been frozen shall
P3,000,000 but not more than be issued simultaneously with
twice the value of the monetary the issuance of the freeze order.
instrument or property involved The depositor shall have (72)
in the offense, shall be imposed hours upon receipt of the notice
upon a person convicted under to explain why the freeze order
Section 4(a) of this Act. should be lifted.
b. imprisonment from 4-7 years o The AMLC has (72) hours to
and a fine of P1,500,000- dispose of the depositor's
P3,000,000, shall be imposed explanation. If it fails to act
upon a person convicted under within (72) hours from receipt
Section 4(b) of this Act. of the depositors explanation,
c. imprisonment from 6 months- 4 the freeze order shall
years or a fine of P100,000- automatically be dissolved.
P500,000, or both, shall be
imposed on a person convicted The 20 day freeze order of the AMLC
under Section 4(c) of this may be extended upon order of the
Act. court. No court shall issue a temporary
restraining order or writ of injunction
Others: against any freeze order issued by the
Penalties for Failure to Keep AMLC except the Court of Appeals or
Records. the Supreme Court.
The penalty of imprisonment from six
(6) months to one (1) year or a fine of k) Examination of accounts
not less than P100,000- P 500,000, or AMLC may inquire into or examine any
both, shall be imposed on a person particular deposit or investment with
convicted under Section 9(b). any banking institution or non- bank
financial institution upon order of any
Malicious Reporting. competent court in cases of violation
The penalty of imprisonment from six of this Act when it has been
(6) months to (4) year or a fine of not established that there is probable
less than P100,000- P 500,000, or cause that the deposits or investments
both,at the discretion of the court: involved are in any way
Provided, that the offender is not
entitled to the benefits of the Probation
Law.
Breach of Confidentiality.
The punishment of imprisonment
ranging from (3) to (8) years and a fine
of not less than P 500,000-P 1,000,000
shall be imposed on a person
convicted for a violation under Section
9 (c).
j) Freezing of accounts
Upon determination that probable
o enjoy FISCAL AND
ADMINISTRATIVE AUTONOMY,
while being govt owned
Role of BSP
Acts as banker of the
government
Representation with
international monetary fund
Representation with other
financial institutions
Fiscal operations: maintains
general cash account in which
liquid funds of the govt are
deposited.
Sec 25:
The Bangko Sentral shall have
NEW CENTRAL BANK ACT supervision over, and conduct periodic
(BSP) or special examinations of, banking
a) State declared policy institutions and quasi-banks, including
to maintain a central monetary their subsidiaries and affiliates
authority that shall: engaged in allied activities.
o function and operate as an in o Subsidiary- corporation of which more
INDEPENDENT AND than 50% of the voting stock is owned
by a bank or quasi-bank.
ACCOUNTABLE BODY in the o Affiliate- corporation of which the voting
discharge of its stock to the extent of 50% or less, is
responsibilities concerning owned by a bank or quasi-bank or
money, banking and credit; which is related to such institution or
through common stockholders.
and
The department heads and the examination responsibility or by the
examiners of the supervising Bangko Sentral in an appropriate legal
and/or examining departments are action it has initiated involving the
hereby authorized to administer deposit account.
oaths to any director, officer, or
employee of any institution under Sec 27:
their respective supervision or subject Prohibitions. - In addition, personnel of
to their examination and to compel the the Bangko Sentral are hereby
presentation of all books, documents, prohibited from:
papers or records necessary in their
judgment to ascertain facts relative to a. being an officer, director,
the true condition of any institution, lawyer or agent, employee,
subject to the provision of existing consultant or stockholder,
laws protecting the secrecy or directly or indirectly, of any
confidentiality of bank deposits as institution subject to
well as investments of private supervision or examination
persons, natural or juridical, in by the Bangko Sentral,
debt instruments issued by the except non-stock savings and
Government. loan associations and provident
funds organized exclusively for
Effect on DORSI: employees of the Bangko
Sec 26: Sentral, and except as
Any director, officer or stockholder otherwise provided in this Act;
who, together with his related interest,
contracts a loan or any form of b. directly or indirectly requesting
financial accommodation from: or receiving any gift, present or
his bank; or pecuniary or material benefit
for himself or another, from
from a bank
any institution subject to
which is a subsidiary of a
supervision or examination
bank holding company of by the Bangko Sentral;
which both his bank and the
lending bank are subsidiaries; c. revealing in any manner,
or except under orders of the
in which a controlling court, the Congress or any
proportion of the shares is government office or agency
owned by the same interest authorized by law, or under
that owns a controlling such conditions as may be
proportion of the shares of his prescribed by the Monetary
bank, in excess of five Board, information relating
percent (5%) of the capital to the condition or business
and surplus of the bank, or in of any institution.
the maximum amount
permitted by law, whichever d. borrowing from any
is lower, *20% institution subject to
supervision or examination
Shall be required by the lending by the Bangko Sentral shall
bank to waive the secrecy of his be prohibited unless said
deposits of whatever nature in all borrowings are adequately
banks in the Philippines. Any secured, fully disclosed to the
information obtained from an Monetary Board, provided, that
examination of his deposits shall be personnel of the supervising
held strictly confidential and may be and examining departments are
used by the examiners only in prohibited from borrowing from
connection with their supervisory and
a bank under their supervision
or examination Whenever, upon report of the head of
the supervising or examining
d) Conservator, receiverhship and department, the Monetary Board finds
liquidation that a bank or quasi-bank:
is unable to pay its liabilities as
they become due in the ordinary
Sec 29: course of business: Provided, That
Appointment of conservator this shall not include inability to
Whenever the Monetary Board finds pay caused by extraordinary
that a bank or a quasi-bank is in a demands induced by financial
state of continuing inability or panic in the banking community;
unwillingness to maintain a condition has insufficient realizable assets, as
of liquidity adequate to protect the determined by the Bangko Sentral,
interest of depositors and creditors, to meet its liabilities; or
the Monetary Board may appoint a cannot continue in business
without involving probable losses
conservator (who shall be competent
to its depositors or creditors; or
and knowledgeable in bank operations has willfully violated a cease and
and management) for a period not desist order under Section 37 that
exceeding 1 year has become final, involving
o take charge of the assets, transactions which amount to fraud
liabilities and management of or a dissipation of the assets of the
the bank or quasi-bank in institution; in which cases, the
question Monetary Board may without need
o reorganize the management for prior hearing forbid the
institution from doing business in
thereof
the Philippines and designate the
o collect all monies and debts due Philippine Deposit Insurance
and Corporation as receiver of the
o exercise all powers necessary banking institution.
to restore its viability, including Functions of Receiver
the power to overrule or revoke Immediately gather and take
the actions of the previous charge of all the assets and
management and board of liabilities of the institution,
directors administer the same for the
benefit of its creditors e.g.
When conservatorship terminated Collect pre-existing
(a)When MB is satisfied that the debts
institution can continue to operate on Foreclose mortgages
its own and the conservatorship is no security
longer necessary; or Exercise the general powers of a
(b)When MB determines that the receiver
continuance in business of the Determine as soon as possible,
institution would involve probable loss but not late than 90 days from
to its depositors or creditors, in which takeover, whether the institution
case proceedings for receivership and can be rehabilitated or otherwise
liquidation shall be pursued. placed in such a condition so
that it may be permitted to
Sec 30: resume business with safety to
Proceedings in Receivership and its depositors and creditors, and
Liquidation the general public.
Who are Receivers?
o For Banks PDIC BUT: any determination for resumption
o For Quasi-Banks Any person of of business shall be subject to the prior
recognized competence in approval of the Monetary Board
banking or finance
If the receiver determines that the
institution cannot be The designation of a conservator under
rehabilitated, the Monetary Board Section 29 of this Act or the
shall notify in writing the board of appointment of a receiver under this
directors of its findings and direct the section shall be vested exclusively
receiver to proceed with the liquidation with the Monetary Board.
of the institution. Furthermore, the designation of a
Duties of the Receiver/Liquidator : conservator is not a precondition to the
1) File ex parted with the RTC a designation of a receiver.
petition for assistance in the
liquidation of the institution e) Peso, Currency, legal tender
pursuant to a liquidation plan and deposit accounts
adopted by the PDIC for banks, and The Peso. - The unit of monetary value
by MB for quasi-banks in the Philippines is the "peso," which
2) Upon motion by receiver, upon is represented by the sign "P."
RTCs acquisition of jurisdiction,
RTC shall assist enforcement of the
individual liabilities of the Definition of Currency. - The word
stockholders, directors, and officers "currency" is hereby defined, as
and decide on other issues as may meaning all Philippine notes and coins
be material to the liquidation plan issued or circulating in accordance
adopted with the provisions of this Act.
3) Receiver shall convert the assets to
money and proceeds shall be Exclusive Issue Power. - The Bangko
applied in paying the debts of the Sentral shall have the sole power and
institution in accordance with rules authority to issue currency, within the
on concurrence and preference of territory of the Philippines. No other
credit person or entity, public or private, may
4) Receiver shall institute such actions put into circulation notes, coins or any
as may be necessary other object or document which, in the
opinion of the Monetary Board, might
The assets under receivership or circulate as currency, nor reproduce or
liquidation deemed in custodia legis, in imitate the facsimiles of Bangko
the hands of the receiver and shall be Sentral notes without prior authority
exempt from any order of garnishment, from the Bangko Sentral.
levy, attachment or execution
This is done in order to prevent the
The actions of the Monetary Board circulation of foreign currency or of
taken under this section or under currency substitutes as well as to
Section 29 of this Act shall be final and prevent the reproduction of facsimiles
executory, and may not be restrained of Bangko Sentral notes.
or set aside by the court except on
petition for certiorari on the ground Liability for Notes and Coins. - Notes
that the action taken was in excess of and coins issued by the Bangko Sentral
jurisdiction or with such grave abuse of shall be liabilities of the Bangko Sentral
discretion as to amount to lack or and may be issued only against, and in
excess of jurisdiction. amounts not exceeding, the assets of
the Bangko Sentral.
The petition for certiorari may only be
filed by the stockholders of record The Bangko Sentral's holdings of its
representing the majority of the capital own notes and coins shall not be
stock within 10 days from receipt by considered as part of its currency issue
the board of directors of the institution and, accordingly, shall not form part of
of the order directing receivership, the assets or liabilities of the Bangko
liquidation or conservatorship. Sentral.
Legal Tender Power. - All notes and Retirement of Old Notes and Coins. -
coins issued by the Bangko Sentral The Bangko Sentral may call in for
shall be fully guaranteed by the replacement notes of any series or
Government of the Republic of the denominations which are more than
Philippines and shall be legal tender in five (5) years old and coins which are
the Philippines for all debts, both more than (10) years old.
public and private: Provided, however,
That, unless otherwise fixed by the Notes and coins called in for
Monetary Board, coins shall be legal replacement in accordance with this
tender in amounts not exceeding Fifty provision shall remain legal tender for
pesos (P50.00) for denominations of a period of one (1) year from the date
Twenty-five centavos and above, and of call. After the expiration of this
in amounts not exceeding Twenty latter period, the notes and coins,
pesos (P20.00) for denominations of which have not been exchanged, shall
Ten centavos or less. cease to be a liability of the Bangko
Sentral and shall be demonetized.
Amended: Philippine currency notes
have no limit to their legal tender Demand Deposits- the term "demand
power. However, in the case of coins in deposits" means all those liabilities of
denomination of 1-, 5- and 10-piso the Bangko Sentral and of other banks
they shall be legal tender in amounts which are denominated in Philippine
not exceeding P1,000 while coins in currency and are subject to payment in
denomination of 1-, 5- and 10- and 25- legal tender upon demand by the
sentimo shall be legal tender in presentation of checks.
amounts not exceeding P100, pursuant
to BSP Circular No. 537, Series of 2006. Issue of Demand Deposits. - Only
banks duly authorized to do so may
Replacement of Currency Unfit for accept funds or create liabilities
Circulation. - The Bangko Sentral shall payable in pesos upon demand by the
withdraw from circulation and shall presentation of checks, and such
demonetize all notes and coins which operations shall be subject to the
for any reason whatsoever are unfit for control of the Monetary Board in
circulation and shall replace them by accordance with the powers granted it
adequate notes and coins: with respect thereto under this Act.
Provided, however, That the
Bangko Sentral shall not replace Legal Character. - Checks representing
notes and coins the demand deposits do not have legal
identification of which is tender power and their acceptance in
impossible, coins which show the payment of debts, both public and
signs of filing, clipping or private, is at the option of the creditor:
perforation, and notes which Provided, however, That a
have lost more than 2/5 of their check which has been cleared
surface or all of the signatures and credited to the account of
inscribed thereon. Notes and the creditor shall be equivalent
coins in such mutilated to a delivery to the creditor of
conditions shall be withdrawn cash in an amount equal to the
from circulation and amount credited to his account.
demonetized without
compensation to the bearer.