AMLA

Question 1

What is the definition of money laundering?

Answer 1

A crime committed by any person knowing that any monetary instrument or property represents, involves or relates to, the proceeds of any unlawful activity.

Question 2

What actions constitute money laundering? List at least three.

Answer 2

• Transacts or attempts to transact said monetary instrument or property
• Converts, transfers, disposes of, moves, acquires, possesses or uses said monetary instrument or property
• Conceals or disguises the true nature, source, location, disposition, movement or ownership of or rights with respect to said monetary instrument or property

Question 3

True or False: A person can be charged with money laundering for failing to report a suspicious transaction.

Answer 3

True

Question 4

Fill in the blank: The first stage of money laundering is called _______.

Answer 4

[Placement]

Question 5

What is the second stage of money laundering?

Answer 5

[Layering]

Question 6

What occurs during the integration stage of money laundering?

Answer 6

The money re-enters mainstream economy in legitimate-looking form, appearing to have come from legitimate transactions.

Question 7

List the three stages of money laundering.

Answer 7

• Placement
• Layering
• Integration

Question 8

What does the Anti-Money Laundering Act (RA 9160) address?

Answer 8

It addresses the crime of money laundering and outlines the actions that constitute this crime.

Question 9

What legal professionals are not covered under the banking law when acting independently regarding client information?

Answer 9

Lawyers and certified public accountants

They are exempt when disclosure would compromise client confidences or the attorney-client/CPA-client relationship.

Question 10

Define a shell company.

Answer 10

An incorporated company that possesses no significant assets and does not perform any significant operations.

Question 11

How do shell companies facilitate money laundering?

Answer 11

They purport to perform services that require cash payments, increasing customer anonymity and decreasing traceability of dirty money.

Question 12

What is the process used by shell companies to launder money?

Answer 12

Launderers deposit money with the shell company, which then creates fake invoices and receipts, making the cash appear legitimate.

Question 13

What are the obligations of covered institutions regarding customer identification?

Answer 13

They shall establish and record the true identity of clients based on official documents.

Question 14

What types of accounts are prohibited for covered persons?

Answer 14

Anonymous accounts and accounts under fictitious names

Covered persons must maintain customers’ accounts only in the true and full name of the account owner or holder.

Question 15

What is the restriction regarding numbered accounts?

Answer 15

Numbered accounts, except non-checking numbered accounts, shall not be allowed

Covered and suspicious transaction reports involving non-checking numbered accounts must contain the true name of the account holder.

Question 16

How long must records of transactions be maintained by covered institutions?

Answer 16

5 years from the date of transactions

All records of all transactions must be safely stored.

Question 17

What is the Safe Harbor provision?

Answer 17

No administrative, criminal, or civil proceedings shall lie against any person for having made a transaction report in good faith

This applies regardless of whether it results in any criminal prosecution under Philippine laws.

Question 18

What are the reportorial requirements for covered transactions?

Answer 18

Covered institutions shall report to the AMLC all covered transactions within 5 working days

The AMLC may prescribe a longer period not exceeding 15 working days.

Question 19

What is defined as a covered transaction?

Answer 19

A transaction in cash or other equivalent monetary instrument involving a total amount in excess of P500,000 within one banking day

Conviction for unlawful activity is not necessary before a report is made.

Question 20

What is the cash transaction limit for casinos as per RA No. 10927?

Answer 20

A single casino cash transaction in excess of P5,000,000 or its equivalent in any other currency.

This law regulates large cash transactions in casinos to prevent money laundering.

Question 21

What is the cash transaction limit for real estate developers/brokers as per RA No. 11521?

Answer 21

A single cash transaction involving an amount in excess of P7,500,000 or its equivalent in any other currency.

This amendment took effect on January 31, 2021.

Question 22

What is the time frame for filing suspicious transaction reports?

Answer 22

Covered persons must file reports within the next working day from the occurrence of the transaction.

The term ‘occurrence’ refers to the date the suspicion is established.

Question 23

What does a suspicious transaction involve?

Answer 23

A transaction with covered institutions where any of the following circumstances exist:
* No underlying legal or trade obligation
* Client not properly identified
* Amount not commensurate with the client’s business or financial capacity
* Transaction structured to avoid reporting requirements
* Deviates from the client’s profile or past transactions
* Related to unlawful activity or offense
* Similar to any of the foregoing circumstances.

These criteria help identify potential money laundering activities.

Question 24

True or False: A suspicious transaction must always involve a large amount of money.

Answer 24

False

A suspicious transaction can occur regardless of the amount involved.

Question 25

What should be done if a transaction is suspected to deviate from the client's profile?

Answer 25

It should be reported as a suspicious transaction. ## Footnote This helps institutions monitor unusual activities that may indicate money laundering.

Question 26

What is the maximum number of days a covered entity has to determine if a transaction is suspicious?

Answer 26

10 days from the date of the transaction. ## Footnote This ensures timely reporting and compliance with regulations.

Question 27

What action must be taken if a transaction is related to unlawful activity?

Answer 27

It must be reported as a suspicious transaction. ## Footnote This is crucial for law enforcement and anti-money laundering efforts.

Question 28

What should be reported if a transaction is both covered and suspicious?

Answer 28

It shall be reported as a suspicious transaction ## Footnote This highlights the priority of reporting suspicious transactions over covered ones.

Question 29

Is reporting a suspicious transaction considered a violation of bank secrecy laws?

Answer 29

No, it shall not be considered a violation ## Footnote This indicates an exception in the context of reporting suspicious activities.

Question 30

What is prohibited regarding the communication of covered or suspicious transaction reports?

Answer 30

It shall be prohibited to communicate the fact or content of the report to any person ## Footnote This emphasizes the confidentiality surrounding such reports.

Question 31

Fill in the blank: If a transaction is both a covered and a suspicious transaction, it must be reported as a _______.

Answer 31

suspicious transaction

Question 32

Who is the Chairman of the Anti-Money Laundering Council (AMLC)?

Answer 32

BSP Governor

Question 33

Name one member of the Anti-Money Laundering Council (AMLC).

Answer 33

Commissioner of Insurance Commission

Question 34

Which position is held by the Chairman of the SEC in the context of the AMLC?

Answer 34

Member

Question 35

What does the Court of Appeals issue upon application ex parte by AMIC?

Answer 35

A freeze order ## Footnote The freeze order is effective immediately for a period of 20 days unless extended by the court.

Question 36

Under what condition can the Court of Appeals issue a freeze order?

Answer 36

Upon determination that probable cause exists that any monetary instrument or property is related to unlawful activity ## Footnote This determination is crucial for the issuance of the freeze order.

Question 37

How long is the initial freeze order effective?

Answer 37

20 days ## Footnote The period can be extended by the court upon application by the AMLC.

Question 38

What type of accounts can the AMLC apply to freeze?

Answer 38

Monetary instruments or properties in the names of reported owners/holders ## Footnote This includes all related web of accounts pertaining to the monetary instruments or properties.

Question 39

True or False: The freeze order can only be issued for a single account.

Answer 39

False ## Footnote The order can apply to a web of interlocking accounts related to the monetary instruments or properties.

Question 40

What type of application must be made for the Court of Appeals to issue a freeze order?

Answer 40

Application ex parte by AMIC

Question 41

What is the time frame within which the Court of Appeals must conduct a summary hearing regarding a freeze order?

Answer 41

Twenty (20) days ## Footnote This hearing determines whether to modify, lift, or extend the freeze order.

Question 42

What is the maximum duration of a freeze order issued by the Court of Appeals?

Answer 42

Six (6) months ## Footnote This duration is the total period for which the freeze order can be effective.

Question 43

What type of order may the Regional Trial Court issue regarding asset preservation?

Answer 43

Asset preservation order ## Footnote This order can be issued depending on the circumstances of the case.

Question 44

What happens if no case is filed against a person whose account has been frozen within the specified period?

Answer 44

The freeze order shall be deemed ipso facto lifted ## Footnote This must occur within six (6) months as determined by the Court of Appeals.

Question 45

Does the new rule under RA No. 11521 apply to pending cases in the courts?

Answer 45

No ## Footnote The court should act on the petition to freeze within twenty-four (24) hours from filing.

Question 46

What is the time frame for the court to act on a freeze petition?

Answer 46

Twenty-four (24) hours ## Footnote Excludes nonworking days if the application is filed before a non-working day.

Question 47

To what extent shall the freeze order or asset preservation order be limited?

Answer 47

To the amount of cash or property that the court finds has probable cause as proceeds of a predicate offense ## Footnote It shall not apply to amounts in excess of the identified proceeds.

Question 48

What can a person whose account has been frozen do?

Answer 48

File a motion to lift the freeze order ## Footnote The court must resolve this motion before the expiration of the freeze order.

Question 49

Who is allowed to issue a temporary restraining order against a freeze order?

Answer 49

Only the Supreme Court ## Footnote No other court shall issue such an order.

Question 50

What power does the AMLC have regarding targeted financial sanctions?

Answer 50

To issue, ex parte, an order to freeze without delay ## Footnote This relates to proliferation of weapons of mass destruction and its financing.

Question 51

What is the duration of effectiveness for a freeze order?

Answer 51

Until the basis for its issuance has been lifted.

Question 52

What can the aggrieved party do within twenty (20) days from the issuance of a freeze order?

Answer 52

File a petition with the Court of Appeals to determine the basis of the freeze order.

Question 53

What may the person whose property or funds have been frozen withdraw?

Answer 53

Sums reasonably needed for monthly family needs and sustenance.

Question 54

What services can be covered by the withdrawn sums from a freeze order?

Answer 54

* Services of counsel * Family medical needs

Question 55

What may the AMLC initiate to preserve assets during a freeze order?

Answer 55

Civil forfeiture proceedings.

Question 56

Which courts can issue a temporary restraining order or a writ of injunction against a freeze order?

Answer 56

Only the Court of Appeals or the Supreme Court.

Question 57

Under what condition can the AMLC inquire into bank deposits?

Answer 57

Upon order of the court when there is probable cause related to crime or unlawful activities.

Question 58

Is a court order necessary for certain offenses when inquiring into bank deposits?

Answer 58

No, it is not necessary for specific offenses.

Question 59

List three specific offenses that do not require a court order for bank deposit inquiries.

Answer 59

* Kidnapping for ransom * Violations under the Comprehensive Dangerous Drugs Act * Terrorism and conspiracy to commit terrorism

Question 60

Fill in the blank: The AMLC may initiate ________ proceedings to protect frozen assets.

Answer 60

civil forfeiture

Question 61

True or False: A freeze order can be contested in any court.

Answer 61

False

Question 62

What does the freeze order protect against?

Answer 62

Dissipation of assets.

Question 63

Can inquiry into deposits be availed of without a pre-existing criminal case?

Answer 63

Yes, inquiry into deposits may be availed of even in the absence of a pre-existing criminal case. ## Footnote This is specific to banking laws and regulations.

Question 64

Is an order authorizing bank inquiry issued ex parte?

Answer 64

No, the order authorizing bank inquiry cannot be issued ex parte. ## Footnote Ex parte refers to a legal proceeding brought by one party without notice to or challenge by the other party.

Question 65

What is civil forfeiture in the context of asset forfeiture?

Answer 65

Civil forfeiture allows the AMLC to file a verified petition for civil forfeiture if probable cause exists that monetary instruments or property are related to unlawful activity or money laundering. ## Footnote AMLC stands for Anti-Money Laundering Council.

Question 66

Is a prior criminal charge necessary for civil forfeiture?

Answer 66

No prior criminal charge, pendency of, or conviction for an unlawful activity or money laundering offense is necessary for the commencement or resolution of a petition for civil forfeiture. ## Footnote This highlights the civil nature of the forfeiture process.

Question 67

What happens in cases of conviction for money laundering regarding asset forfeiture?

Answer 67

The court shall issue a judgment of forfeiture in favor of the Government of the Philippines for the monetary instrument or property found to be proceeds of an unlawful activity. ## Footnote This emphasizes the government's right to seize proceeds from illegal activities.