SBD & AMLA

Question 1

What is the SBD?

Answer 1

The secrecy of banking deposit act, is an act prohibiting the disclosure of or inquiry into, deposits with any banking institution and providing penalties therefore

Purpose of this law is to
1. Encourage the people to deposit money
2. To discourage people in private hoarding so the money actually circulates in the economy

Question 2

What are the exceptions to the provisions of SBC?

Answer 2

1. Written Consent
2. Impeachment
3. Upon order of competent court in cases of bribery or dereliction of duty of public officials.
4. In cases where the money deposited or invested is the subject matter of the litigation

Taxes
5. The commissioner of internal revenue can order to bypass this for bank deposits of a decedent for the purposes of determining his gross estate
6. Commissioner can also order to bypass, in respect of bank deposits of a taxpayer who has filed an application for compromise of his tax liability by reason of financial incapacity to pay it.
7. Commissioner can bypass it again, to look into deposits of a specific taxpayer upon request for tax information from a foreign tax authority pursuant to something the Philippines is a party of

Unclaimed balances act
8. In case of dormant accounts/deposits for at least 10 years under the UBA

Anti-Graft and Corrupt Practices Act
9. Court order in cases of unexplained wealth

Ombudsman act
10. Court order has the power to issue subpoena duces tecum
Subpoena is a writ ordering a person to attend in court
Subpoena duces tecum is a court summons ordering the recipient to appear before the court and produce documents or other tangible evidence

Anti Money Laundering act
11. Court order in any violation of the AMLA
12. Without court order if the AMLA determines that a particular deposit/investment with any banking institution is related to the following (HKMAD S/AT)

PDIC
14. PDIC/BSP may examine deposit accounts and all information related to them in case of a finding of unsafe or unsound banking practices

Question 2

What are the Deposits Covered in SBD? (As in covered by the no disclosure/examination/inquiry/looking into)

Answer 2

1. All deposits of whatever nature with banks/banking institutions
2. Investments in bonds issued by the PH government
3. Trust accounts are included in the scope (Covered by SBD but not PDIC

Question 3

What’s money laundering?

Answer 3

A crime
Whereby the proceeds of unlawful activity
are
Transacted making them appear to have come from a lawful transaction

Any transaction involving such criminal proceeds or attempt to transact the same during the placement, layering, or integration stage shall constitute the crime of money laundering

Question 3

What does Section 135 of the new central bank act repeal?

Answer 3

The previous ability of the Monetary Board authority to bypass SBD with suspicions of bank fraud or when independent auditors audit banks

Question 3

What’s HKMAD S/AT? (Refer to previous card)

Answer 3

Hijacking and other violation of RA No. 6235
Kidnapping for ransom
Murder
Arson
Drugs (Violation of dangerous drugs act)

Violation of the Human Security Act (Or act of terrorism)
Violation of Anti-Terrorism Act (Or act of terrorism)

Question 3

What is garnishment?

Answer 3

Considered as a Specie of Attachment for reaching credits belonging to the judgement debtor and owing to him from a stranger to the litigation

Basically Garnishment of bank deposits is a court-ordered process where the bank (as garnishee) is compelled to freeze and turn over a debtor’s deposit to satisfy a judgment debt. It treats the deposit as “security” for the creditor’s claim, subject to bank secrecy and legal exemptions.

Garnishment of bank deposits is a mode of execution where the court orders a bank (as garnishee) to set aside and deliver the deposits of a judgment debtor to satisfy a final judgment. While the Bank Secrecy Law protects deposit confidentiality, jurisprudence recognizes garnishment as a narrow exception because it is not an inquiry into deposits but an enforcement of a lawful judgment. Still, foreign currency deposits, trust funds, and other specially protected accounts remain exempt.

Question 3

What is a suspicious transaction?

Answer 3

Transactions with covered persons REGARDLESS of the amount (Look at the circumstances not the value basically)
Circumstances could be any of the following:
1. 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 is structured IN ORDER TO AVOID being the subject of reporting requirements under the act.
5. Any circumstances 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 institution
6. The transactions is in a way related to an unlawful activity or offense under this act that is about to be, is being, or has been committed.
7. Any transaction similar or analogous to the foregoing

Question 3

Banking and other covered persons are REQUIRED to report to AMLC when?

Answer 3

1. Any single, series or combination of transactions involving a total amount in excess of PHP 500,000 or equivalent in foreign currency
2. Any suspicious transaction of any amount.

Question 3

What’s an unlawful activity?

Answer 3

Any act or omission (whether it be series or combination)
Involving or having direct relation to the following:
1. Kidnapping/Ransom
2. Drug Trafficking
3. Graft/Other Corrupt Practices
4. Plunder
5. Robbery/Extortion
6. Jueteng/Masiao (Number Gambling)
7. Piracy on the high seas
8. Qualified Theft
9. Swindling
10. Smuggling
11. Violation of E-Commerce Act
12. Hijacking/Arson/Murder
13. Terrorism
14. Forgery
15. ETC. (There’s so much lmao)

Do note that there can be separate convictions for Money Laundering Offences and the Unlawful Activity Constituting it
But Unlawful Activity>Money Laundering in precedence

Question 4

What are the key concepts of Covered Persons

Answer 4

Covered Persons are like:
Financial Institutions (BSP, IC, SEC)
Jewelry Dealers
Company Service Providers
Other Persons
Casinos
Real Estate Developer/Broker

Question 4

What is the money laundering cycle?

Answer 4

Collection of dirty money goes into
A. Placement
Where it integrates into the financial system into
B. Layering
Where it ping pongs around as loans, payment, transfers to various accounts into
C. Integration
Where you purchase luxury assets, investments, industries, etc.

Question 4

What are the 3 main key concepts of AMLA?

Answer 4

Covered Persons
Covered Transactions
Suspicious Transactions

Question 4

What’s the Safe Harbor Provision?

Answer 4

Basically if A covered person reports a covered/suspicious transaction to the AMLC and does not result in a criminal prosecution. They can’t be sued for it. (as long as it was in performance of his duties and in good faith)

In long terms
No administrative, criminal, civil proceedings shall lie against any person for having made a covered transaction report in the regular performance of his duties AND in good faith, whether or not such reporting results in any criminal prosecution under the ALMA or any other PH law

Exceptions
-If they communicate in any manner/by any means to any person that a CTR/STR was made or any information in relation thereto. (That’s confidential)
-Malicious/Bad Faith Reports

Penalties for Exceptions
-6 months - 4 years in prison
-not less than 100k and not more than 500k in fines
-offender not entitled to the benefits of the Probation law

Question 4

How is Money Laundering Commited?

Answer 4

Any person who knowing that monetary instrument or property represents, involves, or relates to the proceeds of any unlawful activity

eg:
1. Transacts said monetary instrument/property
2. Converts/Transfers/Disposes of/Moves/Acquires/Possesses/Uses said monetary instrument or property
3. Conceal/Disguise the true nature, source, location, disposition, movement or ownership of or rights with respect to said monetary instrument or property
4. Attempt or Conspire to commit money laundering offenses stated in 1-3
5. Aids, Abets, Assists in or councils the commission of the monetary laundering offences stated in 1-3
6. Performing/Failing to perform any act as a result of which he facilitates the offense of money laundering referred to in 1-3

Money laundering is also committed by any covered person who knowing that a covered transaction/suspicious transaction is required under this act to be reported to the AMLC, FAILS to do so

Question 4

When can the AMLA require the Land Registration Authority and its registry of deeds to submit reports?

Answer 4

General Rule they’re not covered persons. But they can be required to submit reports on

All real estate transactions involving an amount in excess of 500,000 within 15 days of the date of registration.

They may also require the LRA and its registry of deeds to submit copies of relevant documents of all real estate transactions.

Question 4

Who are excluded from covered persons?

Answer 4

It excludes lawyers and accountants ACTING as independent legal professionals in relation to information concerning their clients or where disclosure of information would compromise client confidence or the confidential relationship

(Provided they are authorized to practice in the PH, and shall continue to do so subject to the provisions of their respective codes of conduct and professional responsibility or any amendments)

Question 5

What is a covered transaction?

Answer 5

The general threshold is:
(Ie if they pass this you have to report it to AMLA)
A transaction in cash or other equivalent monetary instrument
Involving a total amount in excess of 500k php
WITHIN 1 BANKING DAY

For Casino covered transactions its
A single casino transaction involving an amount in excess of 5 million pesos or its equivalent in any other currency

For Jewelry (either precious stones or metals) its 1 million

For Real Estate Developer/Broker - Single cash transaction involving in excess of 7.5 million php

LRA (Not a covered person, but transaction is)
-ALL real estate transaction involving an excess of 500k php (Only required to submit a report if requested since they’re not a covered person)

CTR (Covered Transaction Reports)= Threshold-based reporting (automatic if amount exceeds).

STR (Suspicious Transaction Reports) = Suspicion-based reporting (mandatory regardless of amount).

Covered Person Files Covered Transactions if needed,
AND
If you’re a covered person → you must always file STRs when warranted, even below CTR thresholds.

Question 5

What are monetary instruments?

Answer 5

1. Coins/Currency of legal tender of PH/Other country
2. Drafts/Checks/Notes
3. Securities and That whole bunch of stuff

Question 6

What’s the Customer Identification Obligation?

Answer 6

For covered persons they
Must establish and record and maintain a system of verifying the true identities of the client including legal existence
General Rule: No Anonymous/Fictitious/similar accounts, that’s prohibited
Exceptions: non checking numbered accounts (Provided the client was already identified in an official or other identifying documents)

Question 6

What are the Key Obligations of a Covered person to prevent money laundering?

Answer 6

1. Customer Identification
2. Record Keeping
3. Reporting

Question 7

What’s the Record Keeping Obligation?

Answer 7

For covered persons:
All records of all transactions of covered institutions shall be maintained and safely stored for 5 years from the date of transaction
For closed accounts, it must be preserved and safely stored for at least 5 years from the date when they were closed

Question 7

What’s the Reporting Obligation?

Answer 7

Should the transaction be determined to be both a covered and suspicious transaction, the same shall be reported as a suspicious transaction
General Rule: Reporting of covered person shall be done within 5 working days from occurrence thereof
Exceptions: STR’s shall be filed within the period prescribed under the registration and reporting guidelines of the AMLC, unless the AMLC prescribes a different period not exceeding 15 working days

Question 8

Who has jurisdiction on money laundering?

Answer 8

All cases of money laundering shall be within jurisdiction of
1. Regional Trial Court (Generally)
2. Sandiganbayan (Those committed by public officers and conspiring private persons)

OSG has no involvement at the trial level, only on appeal before the court of appeals and supreme court

Policy Against Political Harassment’
-No money laundering cases can be filed, nor can there be a freeze of account against any candidate for public office DURING AN ELECTION CAMPAIGN

Question 9

Who can freeze accounts?

Answer 9

Only be issued by the court of appeals (They should act on petition to freeze within 24 hours from filing) -Upon Ex Parte Application of AMLC AND -After determination that probable cause exists that any monetary instrument or property is in any way related to an unlawful activity Freezing of account shall be effective IMMEDIATELY for a period not exceeding 20 days Within those 20 days a summary hearing shall be conducted to determine whether or not 1. To modify the freeze order 2. To lift the freeze 3. To lengthen the freeze Total period of the freeze order issued by the court shall not exceed 6 months Sidenote: If there's no case against a person whose account has been frozen within the period determined by the court of appeals, the order is deemed "ipso facto" lifted Person whose account has been frozen may file a motion to lift freeze order (The court must resolve before the expiration of the freeze order) No court shall issue a TRO or writ of injunction against any freeze order EXCEPT the Supreme Court Sidenote any proceeds of the case goes back to the government because of course lol