CHAPTER THREE ANTI-MONEY LAUNDERING ACT

The Anti-Money Laundering Law (RA 9160, as amended by RA 9194) On 29 September 2001, Congress enacted Republic Act (R.A.) 9160, otherwise known as the Anti-Money Laundering Act of 2001. The law was amended with the enactment of R.A. 9194 R.A. 9160 criminalized money laundering in the Philippines and, at the same time, introduced civil forfeiture as an appropriate remedy for the seizure and forfeiture in favor of the State, without the necessity of conviction or prosecution in a criminal case, of monetary instrument, property or proceeds involved in or related to an unlawful activity or money laundering offense as defined in the law. The law created the the Anti-Money Laundering Council (AMLC), which is composed of: a. the Governor of the Bangko Sentral ng Pilipinas (BSP), as Chairman b. the Commissioner of the Insurance Commission (IC); and c. the Chairman of the Securities and Exchange Commission (SEC), as Members. The AMLC is assisted by a Secretariat which is headed by an Executive Director and consists of four (4) units: a. b. c. d. Compliance and Investigation Group; Legal and Evaluation Group; Information Management and Analysis Group; Administrative and Financial Services Division.

Under R.A. 9160, as amended, the AMLC has the following functions, all of which are relevant for the purposes of combating trafficking:

a. Require and receive covered or suspicious transaction reports from covered institutions; b. Issue orders addressed to the appropriate Supervising Authority or the covered institution to determine the true identity of the owner of any monetary instrument or property subject of a covered transaction or suspicious transaction report or request for assistance from a foreign State, or believed by the Council, on the basis of substantial evidence, to be, in whole or in part, wherever located, representing, involving, or related to, directly or indirectly, in any manner or by any means, the proceeds of an unlawful activity. c. Institute civil forfeiture proceedings and all other remedial proceedings through the Office of the Solicitor General. d. Cause the filing of complaints with the Department of Justice or the Office of the Ombudsman for the prosecution of money laundering offenses.

e. Investigate suspicious transactions and covered transactions deemed suspicious after an investigation, money laundering activities, and other violations of the Act. f. Apply before the Court of Appeals, ex parte, for the freezing of any monetary instrument or property alleged to be the proceeds of any unlawful activity as defined in Section 3(i) of R.A. 9160, as amended. g. Implement such measures as may be necessary and justified under the law to counteract money laundering. h. Receive and take action in respect of any request from foreign states or jurisdictions for assistance in their own anti- money laundering operations provided in the law. i. Develop educational programs on the pernicious effects of money laundering, the methods and techniques used in money laundering, the viable means of preventing money laundering and the effective ways of prosecuting and punishing offenders. j. Enlist the assistance of any branch, department, bureau, office, agency or instrumentality of the government, including government-owned-andcontrolled corporations, in undertaking any and all anti-money laundering operations, which may include the use of its personnel, facilities and resources for the more resolute prevention, detection and investigation of money laundering offenses and prosecution of offenders. k. Impose administrative sanctions for the violation of laws, rules, regulations and orders and resolutions issued pursuant thereto. l. Examine or inquire into bank deposits/investments upon order of any competent court in cases of violation of the AMLA, when it has been established that there is probable cause that the deposits/investments are related to an unlawful activity or money laundering offense. No court order, however, is necessary in cases involving kidnapping for ransom; narcotics offenses; and acts of terrorism.

How can the AMLA be used by victims of trafficking? For purposes of combating trafficking in persons, the AMLC may institute freeze order, asset preservation and civil forfeiture proceedings against traffickers and facilitators of trafficking in order to hit them where it hurts the most through their pockets. Freeze order, asset preservation and civil forfeiture of monetary instruments or property alleged to be proceeds of any unlawful activity under the AMLA present itself as a viable legal route for victims of trafficking, without need of undergoing litigious criminal proceedings prosecuting trafficking offenses and related offenses such as illegal recruitment, estafa, among others.

Predicate offenses under the AMLA Money laundering, as defined in the law, is a crime whereby the proceeds of an unlawful activity are transacted thereby making them appear to have originated from legitimate sources (Section 4, R.A. 9160, as amended).

For purposes of money laundering, the term unlawful activity refers to any act or omission or series or combination thereof involving or having direct relation to the following: a. Kidnapping for ransom b. Drug Trafficking and other violations of the Comprehensive Dangerous Drugs Act of 2002 c. Graft and Corruption under R.A. No. 3019, as amended d. Plunder (R.A. No. 7080 as amended) e. Robbery and extortion f. Jueteng and Masiao (Presidential Decree 1602) g. Piracy on the high seas (Revised Penal Code RPC & PD 532) h. Qualified Theft under Art. 310, RPC i. Swindling under Art. 315, RPC j. Smuggling under R.A. 455 & 1937 k. Violations of Electronic Commerce Act of 2000 l. Hijacking, destructive arson and murder, including those perpetrated by terrorists against non-combatant persons and similar targets m. Fraudulent practices and other violations under the Securities Regulation Code of 2000 (RA 8799) n. Felonies or offenses of a similar nature punishable under the penal laws of other countries. While human trafficking as a special crime has not yet been identified as a predicate offense in the conduct of money laundering, the conduct of trafficking often involves swindling and graft and corruption of public officers who facilitate the entry or exit of victims or falsify travel documents.

In the 2005 Batangas Regional Trial Court case of People vs. Lalli, the female victim was recruited, offered and promised for a fee decent employment in Malaysia. This prompter her to apply and pay P28,000 to the accused as placement fee for and in consideration of the promised employment. The promised employment did not materialize as she was subjected to work as a prostitute while fronting as a restaurant entertainer.1 The situation in the above case clearly shows swindling under Art. 315 of the RPC, as the offense had been committed by means of false pretenses executed prior to and simultaneously with the commission of the fraud by falsely pretending to possess power, influence, and qualifications to deploy the victim for gainful and decent employment abroad. As elements of swindling under Art. 315 of the RPC exist, the convicted traffickers monetary instruments and property alleged to be the proceeds of such swindling may now validly be the subject of a freeze order, asset preservation and civil forfeiture proceedings by the AMLC through the Office of the Solicitor General.

People of the Philippines vs. Hadja Jarma Lalli y Purih, Ronnie Aringoy y Masion, and Nestor Relampagos (RTC Case Nos. 21908 and 21930)
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On the other hand, the 2006 Bacolod RTC case of People vs. Reyes involved the illegal facilitation by public officers of the departure of trafficking victims from our ports. The victim was promised employment in Malaysia for a monthly salary of 20,000 pesos as a receptionist, only to find out that she was being sent to work in a sex saloon. Despite the absence of travel and work documents, immigration officers in Zamboanga City allowed her to depart the Philippines. Allowing the departure of the victim despite the absence of travel and work documents constitutes a violation by the concerned immigration officer of Sec. 3 (e) of RA 3019, or the Anti-Graft and Corrupt Practices Act, as he had given the trafficker through the victim an unwarranted benefit (i.e. allowing departure without travel and work documents) in the discharge of his official and administrative functions through evident bad faith.2 As such, the requirement for the existence of a predicate offense prior to the conduct of a freeze order, asset preservation and civil forfeiture proceedings shall have been met. Thus, the assets of the erring public officer who had facilitated trafficking in persons may be subjected to civil forfeiture proceedings.

Procedure in filing complaint with the AMLC What documents are required? The AMLC would firstly require trafficking victims to execute an affidavit detailing activities committed by traffickers which may constitute as predicate offenses under the AMLA, in order to trigger investigation proceedings. Other useful documents or pieces of evidence may include: a. b. c. d. e. f. Falsified passports Falsified documents Plane tickets E-mail exchanges CCTV screen grab of immigration officials facilitating exit Certification from the Register of Deeds or the Land Transportation Office on as to traffickers registered property g. Certificates of stock h. Overseas employment contracts i. POEA-issued licenses to operate of recruitment agencies Where is the AMLA located? The AMLC office is located at 5th Floor, EDPC Building, Bangko Sentral ng Pilipinas (BSP) Complex, Mabini corner Vito Cruz Street, Malate, Manila. They may be contacted through the following:
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Sec. 3(e), RA 3019

Telephone: +63-2-708-7701 local 3083, 3084 Fax: +63-2-708-79-09 E-mail: secretariat@amlc.gov.ph / amlc@bsp.gov.ph

Victims can avail of Mutual Legal Assistance Treaties (MLATs) Victims of trafficking, particularly those who remain in foreign states may also utilize MLAT existing between the Philippines and foreign states. The Philippines has MLATs with the following countries: a. b. c. d. e. f. g. h. China United Kingdom Australia United States Hong Kong Switzerland Republic of Korea Spain

For purposes of combating trafficking, the existing MLATs mandate the tracing, freezing and confiscation proceeds of crimes located in the Philippines but committed in a foreign state.

Victims may also avail of state policy in the AMLA to assist states in transnational prosecution of persons involved in money laundering activities Sec. 2 of RA 9160 states the clear policy of the state to assist foreign states in transnational prosecution of persons involved in money laundering, providing thus Consistent with its foreign policy, the State shall extend cooperation in transnational investigations and prosecutions of persons involved in money laundering activities whenever committed. Such state policy of cooperation and assistance is further detailed in Sec. 13 of RA 9160, stating thus Section 13. Mutual Assistance among States. (a) Request for Assistance from a Foreign State. Where a foreign State makes a request for assistance in the investigation or prosecution of a money laundering offense, the AMLC may execute the request or refuse to execute the same and inform the foreign State of any valid reason for not executing the request or for delaying the execution thereof. The principles of mutuality and reciprocity shall, for this purpose, be at all times recognized. (b) Power of the AMLC to Act on a Request for Assistance from a Foreign State. The AMLC may execute a request for assistance from a foreign State by: (1) tracking down, freezing, restraining

and seizing assets alleged to be proceeds of any unlawful activity under the procedures laid down in this Act; (2) giving information needed by the foreign State within the procedures laid down in this Act; and (3) applying for an order of forfeiture of any monetary instrument or property in the court: Provided, That the court shall not issue such an order unless the application is accompanied by an authenticated copy of the order of a court in the requesting State ordering the forfeiture of said monetary instrument or properly of a person who has been convicted of a money laundering offense in the requesting State, and a certification of an affidavit of a competent officer of the requesting State stating that the conviction and the order of forfeiture are final and then no further appeal lies in respect or either. The policy of assistance is only limited in the event that the action sought by the request contravenes any provision of the Constitution or the execution of a request is likely to prejudice the national interest of the Philippines unless there is a treaty between the Philippines and the requesting State relating to the provision of assistance in relation to money laundering offenses.3 This policy has been illustrated in the civil forfeiture case of Republic vs. Millenaar, which had arisen because of a mutual legal assistance request by the Kingdom of the Netherlands for the forfeiture of assets of convicted traffickers Janette and Johannes Millenaar. The Millenaar spouses had been sending Filipinos for a fee to work in the Netherlands, only to end up working at their massage parlor. The proceeds of such human trafficking and swindling operations had been regularly sent to the Philippines, which had resulted in the accumulation of bank deposits and the purchase of pieces of property, including a hotel, residential and agricultural lands. As such, the AMLC initiated civil forfeiture proceedings against the Milenaar property, in which it had been able to secure an ex parte provisional asset preservation order and an asset preservation order until the final disposition of the case. The basis for the freeze orders and the civil forfeiture proceedings is the mutual legal assistance request from the Netherlands in which the AMLC had sufficiently shown that the offense committed by the Milennars in the Netherlands was an offense of a similar nature that is punishable under the penal laws of the country (i.e. swindling).4 Because the spouses committed swindling in the course of conducting human trafficking, the AMLC had found clear basis for the asset preservation and civil forfeiture proceedings against Millenaar.

How can victims benefit from the AMLA?

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Sec. 13 (d), RA 9160 Sec. 3(i)(14), RA 9160

While civil forfeiture proceedings are initiated by the AMLC in favor of the Republic, victims of human trafficking may intervene in such proceedings. The 1997 Rules of Civil Procedure are applicable in civil forfeiture proceedings. As such, trafficking victims may validly file a motion for intervention in the court hearing the forfeiture case, as they are clearly interested in the matter in litigation, which are the proceeds related to the conduct on an unlawful activity or predicate offense.5 The victims may intervene at any time before the rendition of judgment by the forfeiture court.6 In the event that the victims had failed to join the forfeiture case as intervenors, they may file a verified petition before the court which rendered the order of forfeiture for a declaration that the same legitimately belongs to them and for segregation or exclusion of the monetary instrument or property corresponding thereto.7 The verified petition shall be filed with the court which rendered the order of forfeiture within fifteen days from the date of finality of the order of forfeiture, in default of which the said order shall be executory and bar all other claims.8 An appeal to the Court of Appeals may be taken by filing within fifteen days from its receipt a notice of appeal with the court which rendered the judgment and serving a copy upon the adverse party.9

CHAPTER FOUR PROCEDURE IN FILING COMPLAINT IN THE AMLC Guidelines for filing Victims may file complaints directly to the AMLC by executing an affidavit detailing activities committed by traffickers which may constitute as predicate offenses under the AMLA, in order to trigger investigation proceedings. As stated in the previous section, other useful documents or pieces of evidence accompanying the affidavit may include: a. b. c. d. e. f. Falsified passports Falsified documents Plane tickets E-mail exchanges CCTV screen grab of immigration officials facilitating exit Certification from the Register of Deeds or the Land Transportation Office on as to traffickers registered property

Sec. 1, Rule 19, 1997 Rules of Civil Procedure Sec. 2, Rule 19, 1997 Rules of Civil Procedure 7 Sec. 35, Title VII, Rules of Procedure in Cases of Civil Forfeiture, A.M. No. 05-1104-SC 2005-11-15 8 supra 9 Sec. 34, Title VI, Rules of Procedure in Cases of Civil Forfeiture, A.M. No. 05-1104-SC 2005-11-15
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g. Certificates of stock h. Overseas employment contracts i. POEA-issued licenses to operate of recruitment agencies

Issuance of a freeze order in the Court of Appeals In the event that a clear basis exists for the issuance of a freeze order against monetary instruments, property or proceeds relating to or involving an unlawful activity as defined under Section 3(i) of RA 9160, the Republic of the Philippines, through the Anti-Money Laundering Council, represented by the Office of the Solicitor General, may file an ex parte verified petition with the Court of Appeals.10 All members of the Division of the Court to which the assigned justice belongs shall act on the petition within twenty-four hours after its filing.11 Upon the issuance of a freeze order, it shall be effective immediately for a period of twenty days. Within the twenty-day period, the court shall conduct a summary hearing, with notice to the parties, to determine whether or not to modify or lift the freeze order, or extend its effectivity as hereinafter provided.12 On motion of the petitioner filed before the expiration of twenty days from issuance of a freeze order, the court may for good cause extend its effectivity for a period not exceeding six months.13 Any party aggrieved by the decision or ruling of the court may appeal to the Supreme Court by petition for review on certiorari under Rule 45 of the Rules of Court. The appeal shall not stay the enforcement of the subject decision or final order unless the Supreme Court directs otherwise.14

Rules of Civil Forfeiture and Asset Preservation in the Regional Trial Court The Republic, through the AMLC, represented by the Office of the Solicitor General, may institute actions for civil forfeiture and all other remedial proceedings in favor of the State of any monetary instrument, property, or proceeds representing, involving, or relating to an unlawful activity or a money laundering offense.15 Sec. 44, Title VIII, Rules of Procedure in Cases of Civil Forfeiture, A.M. No. 0511-04-SC 2005-11-15 11 Sec. 51, Title VIII, Rules of Procedure in Cases of Civil Forfeiture, A.M. No. 0511-04-SC 2005-11-15 12 Sec. 53(a), Title VIII, Rules of Procedure in Cases of Civil Forfeiture, A.M. No. 05-11-04-SC 2005-11-15 13 Sec. 53(b), Title VIII, Rules of Procedure in Cases of Civil Forfeiture, A.M. No. 05-11-04-SC 2005-11-15 14 Sec. 57, Title VIII, Rules of Procedure in Cases of Civil Forfeiture, A.M. No. 0511-04-SC 2005-11-15 15 Sec. 2, Title II, Rules of Procedure in Cases of Civil Forfeiture, A.M. No. 05-1104-SC 2005-11-15
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The civil forfeiture petition shall be filed in any regional trial court of the judicial region where the monetary instrument, property, or proceeds representing, involving, or relating to an unlawful activity or to a money laundering offense are located.16 However, where all or any portion of the monetary instrument, property, or proceeds is located outside the Philippines, the petition may be filed in the regiona1 trial court in Manila or of the judicial region where any portion of the monetary instrument, property, or proceeds is located, at the option of the petitioner.17 The civil forfeiture proceeding in the RTC has an asset preservation mechanism similar to the freeze order in the CA. Where the executive judge of the regional trial court or, in his absence, the viceexecutive judge or, in their absence, any judge of the regional trial court available in the same station, has determined that probable cause exists on the basis of allegations of a verified petition sufficient in form and substance, with a prayer for the issuance of an asset preservation order, that the monetary instrument, property, or proceeds subject of the petition are in any way related to an unlawful activity as defined in Section 3(i) of Republic Act No. 9160, the court may issue ex parte a provisional asset preservation order effective immediately forbidding any transaction, withdrawal, deposit, transfer, removal, conversion, concealment or other disposition of the subject monetary instrument, property, or proceeds.18 The above provisional asset preservation order (PAPO) shall be effective for a period of twenty days from the respective dates of service to respondent or any person acting in his behalf, and upon each covered institution or government agency.19 The court shall then schedule a hearing at a date and time within the twenty-day period at which the respondent may for good cause show why the provisional asset preservation order should be lifted. The court shall determine within the same period whether the provisional asset preservation order should be modified or lifted or an asset preservation order (APO) should issue and act accordingly.20 The APO is enforceable anywhere in the Philippines21 Within twenty-four hours from receipt of an asset preservation order, the sheriff who served the order and the covered institution or government agency shall submit by personal delivery to the RTC which issued the order a detailed written return specifying all the relevant information which shall include the following:

Sec. 3, Title II, Rules of Procedure in Cases of Civil Forfeiture, A.M. No. 05-1104-SC 2005-11-15 17 Supra 18 Sec. 11, Title III, Rules of Procedure in Cases of Civil Forfeiture, A.M. No. 05-1104-SC 2005-11-15 19 Supra 20 Sec. 12, Title III, Rules of Procedure in Cases of Civil Forfeiture, A.M. No. 05-1104-SC 2005-11-15 21 Sec. 14, Title III, Rules of Procedure in Cases of Civil Forfeiture, A.M. No. 05-1104-SC 2005-11-15
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(a) For covered institutions: The account numbers for financial accounts or description of the monetary instrument, property, or proceeds involved; (b) For covered government agencies: 1. Certificates of title numbers of registered real property and the volumes and pages of the registration books of the Register of Deeds where the same are registered; 2. Registration in the Primary Entry Book and corresponding Registration Book in the Register of Deeds for unregistered real property; 3. Registration with the Register of Deeds of the enabling or master deed for a condominium project, declaration of restrictions relating to such condominium project, certificate of title conveying a condominium and notice of assessment upon any condominium; 4. Tax declarations for improvements built on land owned by a different party, together with the annotation of the contract of lease on the title of the owner of the land as registered in the Register of Deeds; 5. Certificates of registration for motor vehicles and heavy equipment indicating the engine numbers, chassis numbers and plate numbers; 6. Certificates of numbers for seacraft; 7. Registration certificates for aircraft; or 8. Commercial invoices or notarial identification for personal property capable of manual delivery; whichever are applicable; (c) The names of the account holders, personal property owners or possessors, or real property owners or occupants; (d) The peso value of the monetary instrument, property, or proceeds as of the time the assets were ordered seized and preserved; (e) All relevant information as to the nature of the monetary instrument, property, or proceeds; and (f) The date and time when the asset preservation order was served.22 What are the assets subject of an asset preservation order (APO)? The following are subject to an APO23 (a) Monetary instrument. The term monetary instrument includes: Sec. 16, Title III, Rules of Procedure in Cases of Civil Forfeiture, A.M. No. 05-1104-SC 2005-11-15 23 Sec. 16, Title IV, Rules of Procedure in Cases of Civil Forfeiture, A.M. No. 05-1104-SC 2005-11-15
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1. 2.

3. 4. 5.

6.

7. 8.

Coins or currency of legal tender of the Philippines or of any other country; Credit instruments, including bank deposits, financial interest, royalties, commissions and other intangible personal property; Drafts, checks and notes; Stocks or shares, or an interest therein, of any corporation or company; An interest in any corporation, partnership, joint venture or any other similar association or organization for profit or otherwise; 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; Contracts or policies of insurance, life or non-life, and contracts of suretyship; and Other similar instruments where title thereto passes to another by assignment, endorsement or delivery;

(b) Property. The term property refers to: 1. Personal property, including proceeds derived therefrom, traceable to any unlawful activity as defined in Section 3(i) of Republic Act No. 9160, as amended by Republic Act No. 9194, includes but is not limited to: (i) Cash; (ii) Jewelry, precious metals, and other similar items; (iii) Works of art such as paintings, sculptures, antiques, treasures and other similar precious objects; (iv) Perishable goods; and (v)Vehicles, vessels or aircraft, or any other similar conveyance. 2. Personal property, used as instrumentalities in the commission of any unlawful activity defined in Section 3(i) of Republic Act No. 9160, as amended by Republic Act No. 9194, such as: (i) Computers, servers and other electronic information and communication systems; and (ii) 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 of the province in the name of the party against whom the asset preservation order is issued, or not appearing at all upon such records, or belonging to the party against whom

the asset preservation order is issued and held by any other person, or standing on the records of the registry of deeds in the name of any other person, which are: (i) derived from, or traceable to, any unlawful activity defined in Section 3(i) of Republic Act No. 9160, as amended by Republic Act No. 9194; or (ii) used as an instrumentality in the commission of any unlawful activity as defined in Section 3(i) of Republic Act No. 9160, as amended by Republic Act No. 9194. (c) Proceeds. - The term proceeds refers to an amount derived or realized from an unlawful activity, which includes, but is not limited to: 4. All material results, profits, effects and any amount realized from any unlawful activity; 5. All monetary, financial or economic means, devices, documents, papers or things used in or having any relation to any unlawful activity; and 6. All moneys, expenditures, payments, disbursements, costs, outlays, charges, accounts, refunds and other similar items for the financing, operations and maintenance of any unlawful activity. Appeal to the Court of Appeals An aggrieved party may appeal the judgment to the Court of Appeals by filing within fifteen days from its receipt a notice of appeal with the court which rendered the judgment and serving a copy upon the adverse party.24

Sec. 34, Title VI, Rules of Procedure in Cases of Civil Forfeiture, A.M. No. 05-1104-SC 2005-11-15
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