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BANKING LAWS TSN

From the lectures of Father Agustin Nazareno,


SY 2016 - 2017

FEB 22, 2017 LILY PETALLO

HISTORY OF MONEY-LAUNDERING

Then our next exam is AMLA Anti-Money Laundering Act. Ill give you notes. I am sticking to official notes. So Im giving
you the historical account of AMLA by the BSP because the Chief AMLA Officer is no other than the BSP Governor. He is
also the head of the AMLC (Anti-Money Laundering Council). So, he has this historical account of AMLA.

And then Ill give you this manifesto, manifestation and exaltation by the Senate Committee Head on Money and Banking,
Senator Gordon, urging the Senate to pass the necessary amendments to the AMLA law. The deficiency of which allowed the
$100 million heist belonging to the Bangladesh Government. It happened _ because the casinos are not included in the
entities that are covered by the AMLA. And they are not included because of the entreaties made by the casino operators at
the time that the police established about 3 or 4 years ago; they are asking that they are not to be included so as not to
discourage business.

They were hoping to get a slice from the market from Macau. You know, used to be that Las Vegas was the biggest revenue
earner in gaming the euphemism for gambling is gaming. (Talks about Chinese gaming industries at Roxas Blvd.) And they
were hoping to get a slice of the market. The biggest gambling trade is supposed to be Las Vegas. But then they discovered
Macau and all the gaming magnets of Las Vegas have lived to Macau and theyre bidding this so-called huge resorts.

Now, so, about 4 years ago, the total revenues of Macau all of a sudden surpassed Las Vegas. So the highest earning center
for gambling became Macau. The following year, Chairman of the Peoples Communist Party of China, Xi Jinping, issued a
decree. What was his decree? It is simple. Since Macau is under the Peoples Republic of China, he just issued a directive,
all CCTV cameras in the resorts will be connected centrally to Beijing. Only CCTV cameras. With that order, the revenues of
Macau just plunged and its now less than half of its original record. So Las Vegas is back on the league. Las Vegas is the
biggest gambling.

What does that tell you? It tells you that gaming in Macau is supported by the New Peoples Republic of China. Its basically
corruption that supported Macau. And what does that tell you? Corruption is not the biggest problem, because even if with all
that massive corruption, China continues to improve. So we are tuning ourselves by saying corruption is what brings the
people of the Philippines in an economic disadvantage. Sure, it is a problem, but it is not the problem.

Indonesia is very much corrupt. Why is its GDP going faster than the Philippines? Malaysia, very corrupt! Can you imagine
the Prime Minister himself is indicted? In the US, he cannot travel to the US now. He will be arrested. Ang money laundering,
it found he has billion dollars in his personal account. It is supposed to be the money of the sovereigns investment company
in Malaysia MDP (Malaysian Development Bank). And he is not convicted. He is not investigated. Ingon siya, nasayop ko
ani, ako na ning iuli. How corrupt can they be?

What does that tell you? Corruption is a problem. But it is not the problem. What is the problem? Kanang mga taong gi-tuk-
ong sa yuta sa buntag na daplin sa dalan, way trabaho. Mao nay problema. Aksyon nag kalibang wa pa ganiy ikalibang. Mao
nay problema. If you cannot assume that posture, that means you are not part of the disadvantaged in the Philippines. (Fr.
Gus demonstrates his so-called most comfortable posture)

Corruption is a function of education and economic prosperity. The higher you are, economically, more educated, the lesser
there is corruption. For as long as there is ignorance. For as long as there is no know-how, no preoccupation, there will be
corruption. And then there will be no free actually free society. Simple.

Now, so thats what happened in this gaming industry. We had trouble passing AMLA. Can you imagine? We had trouble.
The first one that we passed was in 2001, 15 years ago or 16 years ago, became late. We were black-listed as a haven for
dirty money. Why? Because we had some law that set the jurisdiction amount for reporting and coverage of the oversight
agencies, such as BSP, was no more than $10,000. The jurisdictional amount were finally broken down to $10,000 or
P500,000. Any transaction now in a bank, in any financial institution or in more than 100 institutions now, covered by the
latest amendment of 2013, you will be reported. The BSP will have a record of your transaction, and if they saw one second
go to you and trace you. But it took us how many years, more than 10 years, to bring it down to $10,000 or the equivalent
P500,000. Why? Because our Congressmen and Senators bring more than that when they travel around. Thats the only
reason why the law was not passed. Thats why we were black-listed. What is the proof? When the high officials of PNP were
around, they were arrested, and sued in the court. Because they were bringing more than $10,000 in cash. Police nato
gidakop for violation of the AMLA Law of Russia.
BATACAN, CALLANTA, GINGCO, HERNANDEZ, LIM, MORTEJO, TITO, PETALLO
1
BANKING LAWS TSN
From the lectures of Father Agustin Nazareno,
SY 2016 - 2017

(Fr. Gus shares his experience when he tried carrying more than $10,000 in cash to Canada)

WHAT IS MONEY-LAUNDERING?

Dirty money, you make it go to the financial system, and it comes out clean money. Proceeds of a crime, you make it go to
the financial system, and it comes out legitimate money.

If you have trouble, picturing it, picture it this way. Chicago, lord of mafia, there are several drugs in the streets. And then your
collectors found and laid out the money that has been collected from drugs. Some of it are crisp, very few. Most of it are
sticky old money. Really dirty, symbolizing the activity from which it came. You pile it up. You arrange it. 100s. 50s. 20s.
Finally when you have as much as a trunk-load of a car, you buy a second-hand car. You put it on the trunk and you get free
bags. Do it. What are you going to do? You drive from Chicago all the way to Mexico. And along the way, in each town, they
stop by the post office. They buy money delivery checks. They exchange the money for a money order. Different sums.
1,000. 2,000. 500. Money order checks. And they send the money order check to a bank account in Mexico. So, in each
town, they stop. It will take them about 2 or 3 weeks. They do that to empty the trunk of the car with cash. They are armed.
Finally, when they reach Mexico, the trunk of the car is empty. They have exchanged everything to money order checks, and
they made it to Mexico, to that bank account there. So, when they go there, they report to their boss. Check your bank
account, and everything is there. Youll deduct the expenses of the money order, of the entire sums there, a couple of
millions. So what do they do with the money there? They send it to a legitimate bank account back to Chicago. So what is the
origin? Drug dealing, selling drugs in the streets. Its dirty money. Proceeds of a crime. They get it through the financial
system. And when it is integrated back in Chicago, it is already legitimate money. That is the graphic way of money
laundering.

Ang kwarta nga gikan sa hugaw nga kahimuan, imong giwas-wasan, imong gisabunan, imong gi-limpyuhan, unya gibalik
karon, humot na nga kwarta. Dili na kwarta nga gilukdo sa krimen. Kwarta na nga clean money. That is money laundering.
That is a problem everywhere.

JURISDICTIONAL AMOUNT

A. P500,000 or more

So, overall understanding in the world, jurisdictional amount, that should be $10,000. If you deposit money in a bank, and it is
at least $10,000, the bank has the obligation to report you to the BSP and the AMLC. But what is the sad part? Because it is
not low P500,000, everyday, there are so many of that reported to the BSP, but the BSP cannot examine anymore tungod sa
kadaghan. That is a problem. That is jurisdictional amount. All the covered agencies will be in violation of the law if they do
not report it.

Now, supposed to be, casinos are covered. Supposed to be. But at the time when Macau was down, everybody here thought
that we will build up our gaming business by getting the clientele from Macau, who are afraid to be seen by the CCTV, and
belong to the spies of Xi Jiping, the Communist Party Secretary-General. So they said, the Chinese whales will come here.
We call them whales if you pretend so much money to gamble. When do you know you are a whale? When you go to the
gambling casino and everything is free your board, your lodging, your entertainment, and other unmentionables. When all
that is free, then you are a whale.

So they were hoping that. Thats why the congressmen were persuaded not to include gambling casinos in the list of covered
institutions in this reports. Every other place, they are included. You go to Australia, US, Montecarlo, where there is gambling
also. But the Philippines, they did not include that.

Now, you have P500,000 jurisdictional amount.

B. Jurisdictional amount: Less than P500,000 under Suspicious Transactions

And yet there is another amount that you should know. What is that? If that amount is less than P500,000 or US$10,000, but
it is under suspicious circumstances, those are labeled as suspicious transactions.
BATACAN, CALLANTA, GINGCO, HERNANDEZ, LIM, MORTEJO, TITO, PETALLO
2
BANKING LAWS TSN
From the lectures of Father Agustin Nazareno,
SY 2016 - 2017

Give an example of a suspicious transaction. Kaning tao magsige lag taghoy2x ngadto sa bangko, kada-alas-12 sa udto.
Nagtsinelas lang. Basketball shorts. Who has no care at all in his life. But everytime he goes there, he deposits considerable
amounts to just one account. And when he deposits, they are moneys of different denominations, sometimes coins,
sometimes bills. But he does not miss lower than P10,000. And the bank people were asking what is the business of this guy.
It is a big mystery to them. They dont know what he is doing. What is his business? But everyday, without fail, he deposits
P10,000 more

What is that? That is called a suspicious transaction. And, by law, that must be reported to the BSP.

C. Jurisdictional amount: Less than P500,000 by Politically Exposed Persons

Or again you have this lady who comes. She does not come very often, when she comes, she always deposits money, a
considerable amount, but always below the jurisdictional amount of a few hundreds, not P500,000. Its always P450,000,
P460,000, just lower. But shes always dressed up, as if shes going to some big ball or party. Why? Because she is the wife
of the congressman. What is that? The name in the law for that person is politically exposed person.

Transactions of politically exposed persons must be reported, under the law. Dapat tanang transaksyon nila i-report jud.
Transaparency man kaha. What is the assumption? The assumption is what you spent is peoples money, because you are
in office. So therefore, it should be transparent. Data now can now be recorded. In fact, they say 90% of the data now was
created 2 years ago. Because there is so much data. And it is not possible to record all data. That is the deficiency of our
AMLA Law.

THREE STAGES OF MONEY-LAUNDERING

Id like to point out to you what are the 3 stages of money-laundering. This is not from the law, but from the International
Interpol Analysis.

(1) Placement

Placement involves the initial placement or the introduction of the illegal funds into the financial system. From that
picture I gave you, placement there is when you buy money order checks. Of course, they are already in the
financial system because they are working bills or coins. But in the process, when you buy the money order, you
inject it into the financial system.

(2) Layering

Layering involves a series of financial transactions during which the dirty money is passed through a series of
procedures. Putting layer upon layer of persons and financial activities into the laundering process. Money order, so
is the money is in the form of checks. But these checks are government postal money order. Then it is deposited in
an account. Now, from that account, it is telegraphically transferred to another account, but in Chicago, which is a
legitimate account. And from that account, it is again drawn out and transacted in a legitimate business. So, mao
nang mga stages. From trash to money order, unya kung i-trace nimo kinsa tong mga nimpalit ug money order.
Kadtong mga nipalit ato, naa toy mga fake ID, false address. Unya out of town, they are remitting to their
beneficiary. Understandable nganong nipalit sila ug money order. Then it goes to the bank checking account, Then,
it is withdrawn and remitted electronically to another country, from US, it goes to Mexico, then it goes back to US by
electronic transaction. It was called before a telegraphic transfer.

(3) Integration

The money is once again made available to the criminal, with the occupational and geographic origin obscured or
concealed. The laundered funds are now integrated back into the legitimate economy through the purchase of
properties, businesses, and other investments. Money Laundering.

HISTORICAL ACCOUNT OF AMLA


BATACAN, CALLANTA, GINGCO, HERNANDEZ, LIM, MORTEJO, TITO, PETALLO
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BANKING LAWS TSN
From the lectures of Father Agustin Nazareno,
SY 2016 - 2017

Now, what has the Philippine government gone to curb money laundering?

1. It has passed the first AMLA Law, RA 9160, year 2001, October 17.

2. And then there was an amendment. Its first amendment finally lowered the jurisdictional amount, but still not in line
with the international standard. This was RA 9194, 23 March 2003.

3. And then, the latest one was RA 10167, June 2012.

4. And now they are hoping in Gordon, who writes to Congress, begs his colleagues to pass a law, incorporating now
this different casinos. And Gordon has been asking Senate and the Congress, to do it before June 2017, because
we will be again disciplined by the International Banking. He is asking them, malooy intawon mo, we will blacklisted
again as a haven for launderers, center for money laundering.

5. The last amendment that was passed, 2013, is not including pawnshops, money changers. And this is the funny
part, they are including jewelers. They are highly skilled. Many of them are illiterate. They have learned to do their
craft while they were still small. And because they earn so much, they forego education. They are now included.
They must report transactions, whether it is jurisdictional amount P500,000 and above, or less than that if it was a
suspicious transaction. Do you think they will do that? Jewelers? Jewelry-makers, they are covered.

6. There is a big debate in Congress, whether notaries would be included. They could not come into conclusion, most
of them are lawyers. This is part of attorney-client privilege. In the Philippines, it is standard that you do not record
the actual purchase price of a notarized public document. You do not put down the real price. You put down the
price that will give you the lowest possible capital gains tax. And you make notaries part of the covered persons to
report AMLA transactions, they have not concluded. Now they are pushing Congress, lawyers notaries should be
included.

Cases on ex-parte power of AMLA:

Now, there are 3 cases.

1. The latest one is Binay law firm questioning the ex-parte power of the AMLA to investigate bank accounts.

2. Before that, 2012, there is this Eugenio case which also questions AMLA, where Eugenio was successful. It is also
questioning the freeze-order power of this law, the old law, which grants the AMLA the power to go to the court ex-
parte to obtain a freeze-order. The SC EN BANC called that unconstitutional. It is against the due process of law.
In this new law, again the entire Court says, it is not a violation of due process if the AMLA goes to the CA and
obtains an order to investigate, open up the accounts, based on probable cause, ex-parte, without giving the owner
of the banks a chance to be heard. Why is it that the SC said unconstitutional if you go ex-parte claim of freeze-
order? And he brought to Court to look at the bank accounts investigated ex-parte, in these two cases.

3. The earlier case is the Ligot case. General Ligot. He was the controller of the entire AFP. And his assets are listed
there in the case. His two children were studying abroad. His son was caught carrying more than $10,000 and they
could not explain it. And he said this is for the payment of my tuition. It is true. He explained the purpose. But the
origin, he could not explain. So the AMLA wanted to sequester, freeze. And they lost the case. What is the basic
reasoning there? The SC says, why did it take you 6 months to freeze it? Why are you just freezing it now? You
know about it in the past 6 months. That it means it is not really necessary to freeze the bank. What kind of
reasoning is that?! It makes you cry! Kung buang2x diay na nga naa prosecutor, wa mulihok kay tapulan na na.
Unya gipalabay nila ang 6 months. Di na maka-freeze kay nay tapulan nga prosecutor. Is the government bound by
the mistakes of the laziness of its officers? No, it is not. When it just comes to property. When it comes to a question
on liberty, then speedy trial.

(Fr. Gus advice: Make love with AMLA. )

MARCH 1, 2017 JENNIFER LIM

FEATURES OF THE AMLA LAW (R.A. NO. 10365)


BATACAN, CALLANTA, GINGCO, HERNANDEZ, LIM, MORTEJO, TITO, PETALLO
4
BANKING LAWS TSN
From the lectures of Father Agustin Nazareno,
SY 2016 - 2017

SECTION 1. Section 3(a) of Republic Act No. 9160, as


amended, is hereby amended to read as follows:

(a) Covered persons, natural or juridical, refer to:

(1) banks, non-banks, quasi-banks, trust entities, foreign


exchange dealers, pawnshops, money changers, remittance
and transfer companies and other similar entities and all other
persons and their subsidiaries and affiliates supervised or
regulated by the Bangko Sentral ng Pilipinas (BSP);

(2) insurance companies, pre-need companies and all other


persons supervised or regulated by the Insurance Commission
(IC);

(3) (i) securities dealers, brokers, salesmen, investment houses


and other similar persons managing securities or rendering
services as investment agent, advisor, or consultant, (ii) mutual
funds, close-end investment companies, common trust funds,
and other similar persons, and (iii) other entities administering or
otherwise dealing in currency, commodities or financial
derivatives based thereon, valuable objects, cash substitutes
and other similar monetary instruments or property supervised
or regulated by the Securities and Exchange Commission
(SEC);

(4) jewelry dealers in precious metals, who, as a business,


trade in precious metals, for transactions in excess of One
million pesos (P1,000,000.00);

(5) jewelry dealers in precious stones, who, as a business,


trade in precious stones, for transactions in excess of One
million pesos (P1,000,000.00);

(6) company service providers which, as a business, provide


any of the following services to third parties: (i) acting as a
formation agent of juridical persons; (ii) 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; (iii) providing a registered
office, business address or accommodation, correspondence or
administrative address for a company, a partnership or any
other legal person or arrangement; and (iv) acting as (or
arranging for another person to act as) a nominee shareholder
for another person; and

(7) persons who provide any of the following services:

(i) managing of client money, securities or other assets;

BATACAN, CALLANTA, GINGCO, HERNANDEZ, LIM, MORTEJO, TITO, PETALLO


5
BANKING LAWS TSN
From the lectures of Father Agustin Nazareno,
SY 2016 - 2017

(ii) management of bank, savings or securities accounts;

(iii) organization of contributions for the creation, operation or


management of companies; and

(iv) creation, operation or management of juridical persons or


arrangements, and buying and selling business entities.

Notwithstanding the foregoing, the term covered persons shall


exclude lawyers and accountants acting as independent legal
professionals in relation to information concerning their clients
or where disclosure of information would compromise client
confidences or the attorney-client relationship: Provided, That
these lawyers and accountants are authorized to practice in the
Philippines and shall continue to be subject to the provisions of
their respective codes of conduct and/or professional
responsibility or any of its amendments.

Covered transactions are transactions in cash or other monetary instruments involving a total amount in excess of 500K in
one business deal. Even if it is less than 1000, if your total transaction in a day reaches 500K, it becomes a covered
transaction.

The covered institution, like the bank, must report it to determine the list of AMLA transactions.

There are additional institutions in the amended law of covered institutions. This suggestion of additional institutions was
brought about by the Bangladesh scam brought about by casinos and gaming institutions.

WHAT IS THE DETERMINANT?


It is the amount. 500K or more, which is the covered transaction.

WHAT ARE SUSPICIOUS TRANSACTIONS?


Regardless of the amount involved, means and circumstances existing, these circumstances are suspicious circumstances:
1. There is no underlying legal or trade obligation, purpose or economic justification.

Example: naka-shorts lang siya. Mag deposito adlaw2x ug balik-balik. Inig pangutan on unsang negosyo, dili katubag.

It is suspicious and has to be reported. Ngano daghan man ug kwarta, unsa may negosyo ani.

For the banks now, it has to be monitored when opening an account. The banks have verify what you business is. It must be
reported as it is may involve a invalid illegal activity.

2. The client is not identified.

Example: mag-open kag account and co-signatory lang man ka and hain man ang isa? Tua sa abroad. Primary signatory
siya ug ako ang secondary in the meantime na wala pa siya niuli.

Unsay may deperensya sa Bangko ining co-signatories? Both can withdraw and deposit. Ang points ana maadto sa primary,
dili sa secondary. Ang passbook sa primary muy mugunit ana. Inig wa man gyud Makita nang primary, ihatag sa secondary.
Dili pud muhatag ug information nang secondary tungkol anang primary. So you begin to suspicious because the client is not
properly identified. So the transaction has to be reported to the AMLC.

3. The amount involved does not commensurate to the capacity of the client.

BATACAN, CALLANTA, GINGCO, HERNANDEZ, LIM, MORTEJO, TITO, PETALLO


6
BANKING LAWS TSN
From the lectures of Father Agustin Nazareno,
SY 2016 - 2017

Example: the business of the client is that she has a market stall in the wet section of the market. Ang volume ni ya per week
kay makabaligya siya ug upat ka baboy. Unya mag deposito siya ug 100K, 200K kada adlaw.

Mao na ni ang gina ingon the amount involved does not commensurate or does not par with the financial capacity or
business of the client.

4. Taking to account all circumstances, it may be perceived that the clients account is structured in order to
avoid being the subject of reporting requirements under the AMLA Law.

Example: kanang klaro kayo na pag manipula sa account to defer the jurisdictional amount so as to avoid to suspicion.
Kanang mudiposito siya hapit na musara ang Bangko 450K.

Ugma pag mata, deposito na pud ug 300K. itunong ug pag abri sa Bangko 9am, mag sara 4pm. Sa ato pa, naa na sa iyaha
ang kwarta. Wala lang ni ya gi deposit okay maigo man siya sa jurisdictional amount of 500K. gibuak para dili mareport sa
AMLC. Lahi man nang ituyo ug ibuak to avoid certain supervision.

Note: It depends on the account when it involves 50K and below, any single or the following signatories cannot withdraw
amounts in excess of 50K. It must be two of the signatories.

Mag issue ug cheke 49K. unya after an hour naa na pud cheke 49K, iyaha gihapon na signature.The problem there is
internal, in the account. Not an AMLA problem. What AMLA covers is that covers the jurisdictional amounts.

5. Any circumstance relating to the transaction is observed to deviate the profile of the client and/or the
clients past transaction will be a covered institution.

Example: kada lunes mag deposito siya ug isa ka ballot nga coins, ug papel. Ang depositor is the Parish of St. Jude.
Collection sa misa kada Lunes without fail i-deposito. All of a sudden, one Sunday, wala may gideposito na sinsilyo. One
million ang gi deposito. Syaro sa misa ghapon gi collecta ang 1 million.

Diha na any circumstance which tends to deviate from the clients profile and past transactions. Gadeposito siya ug coins
and small bills, why all of a sudden nag change?

REPORTING

SEC. 7. Section 9(c), paragraphs 1 and 4 of the same Act are


hereby amended to read as follows:

SEC. 9. Prevention of Money Laundering; Customer


Identification Requirements and Record Keeping.

(a) x x x

(b) x x x

(c) Reporting of Covered and Suspicious Transactions.


Covered persons shall report to the AMLC all covered
transactions and suspicious transactions within five (5) working
days from occurrence thereof, unless the AMLC prescribes a
different period not exceeding fifteen (15) working days.

Lawyers and accountants acting as independent legal


professionals are not required to report covered and suspicious
transactions if the relevant information was obtained in
circumstances where they are subject to professional secrecy or
BATACAN, CALLANTA, GINGCO, HERNANDEZ, LIM, MORTEJO, TITO, PETALLO
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BANKING LAWS TSN
From the lectures of Father Agustin Nazareno,
SY 2016 - 2017

legal professional privilege.

x x x

x x x

When reporting covered or suspicious transactions to the


AMLC, covered persons and their officers and employees are
prohibited from communicating, directly or indirectly, in any
manner or by any means, to any person or entity, the media, the
fact that a covered or suspicious transaction has been reported
or is about to be reported, the contents of the report, or any
other information in relation thereto. Neither may such reporting
be published or aired in any manner or form by the mass
media, electronic mail, or other similar devices. In case of
violation thereof, the concerned officer and employee of the
covered person and media shall be held criminally liable.

It has to be reported if the transaction is related to any unlawful activity. The offense on the act that is about to be or has been
committed.

Example: a barangay captain who would deposit large amounts, maybe salin sa vote buying or unsa ba. Any transaction
which is similar to the foregoing.

WHAT ARE THE REPORTING REQUIREMENTS?


Covered institutions shall report to the AMLC all covered transactions and suspicious transactions within 5 working days from
occurrence thereof unless the supervising authority or the BSP, dissents or prescribes longer period not exceeding 15
working days.

Should the transaction be proven to be covered transaction and suspicious transactions, it shall be reported as a suspicious
transaction.
For banks now, they have this automatic deposit. The moment it is exceeding 500K. immediately, the system of the bank
segregates as AMLA jurisdiction. It is immediately tallied for in the list.

Now, at the end of the day, the list will be checked. Kanang mga NCCC SM tangtangon na nila hantod sa ang mabilin na lang
kanang naa sa ilahang listahan na covered transaction. Then, one push of a button, it will automatically be with the BSP.

The secretariat, having its own program, will check the standing. That program will input certain additional information which
will report if ever there is a pyramiding skim or whatever.

Example: there is a list of suspicious transactions and the staff will check the list those clients who are based on the program.
They will report to the AMLA to look into the transactions. Because there are a lot of reports on pyramidal skimming and other
illegal transactions.

HOW IS THE REPORTING DONE?


The report of suspicious transactions shall be always in the same format which will be submitted in the same means.

Looking into it, you will see that those who are behind this are not familiar with the milieu of electronic transactions.

5days? Kadaghan na mahimo anang 5 days nga pwede na mabalhin nang kwarta. It should be reported within 1 hour and
thats it. This portion of the law should be amended.

BATACAN, CALLANTA, GINGCO, HERNANDEZ, LIM, MORTEJO, TITO, PETALLO


8
BANKING LAWS TSN
From the lectures of Father Agustin Nazareno,
SY 2016 - 2017

PENAL PROVISIONS

SEC. 10. Section 14 of the same Act, as amended, is hereby


further amended to read as follows:

SEC. 14. Penal Provisions. (a) Penalties for the Crime of


Money Laundering. The penalty of imprisonment ranging from
seven (7) to fourteen (14) years and a fine of not less than
Three million Philippine pesos (Php3,000,000.00) but not more
than twice the value of the monetary instrument or property
involved in the offense, shall be imposed upon a person
convicted under Section 4(a), (b), (c) and (d) of this Act.

The penalty of imprisonment from four (4) to seven (7) years


and a fine of not less than One million five hundred thousand
Philippine pesos (Php1,500,000.00) but not more than Three
million Philippine pesos (Php3,000,000.00), shall be imposed
upon a person convicted under Section 4(e) and (f) of this Act.

The penalty of imprisonment from six (6) months to four (4)


years or a fine of not less than One hundred thousand
Philippine pesos (Php100,000.00) but not more than Five
hundred thousand Philippine pesos (Php500,000.00), or both,
shall be imposed on a person convicted under the last
paragraph of Section 4 of this Act.

(b) x x x

(c) x x x

(d) x x x

(e) The penalty of imprisonment ranging from four (4) to seven


(7) years and a fine corresponding to not more than two
hundred percent (200%) of the value of the monetary instrument
or property laundered shall be imposed upon the covered
person, its directors, officers or pesonnel who knowingly
participated in the commission of the crime of money
laundering.

(f) Imposition of Administrative Sanctions. The imposition of the


administrative sanctions shall be without prejudice to the filing of
criminal charges against the persons responsible for the
violation.

After due notice and hearing, the AMLC shall, at its discretion,
impose sanctions, including monetary penalties, warning or
reprimand, upon any covered person, its directors, officers,
employees or any other person for the violation of this Act, its
implementing rules and regulations, or for failure or refusal to
comply with AMLC orders, resolutions and other issuances.
BATACAN, CALLANTA, GINGCO, HERNANDEZ, LIM, MORTEJO, TITO, PETALLO
9
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From the lectures of Father Agustin Nazareno,
SY 2016 - 2017

Such monetary penalties shall be in amounts as may be


determined by the AMLC to be appropriate, which shall not be
more than Five hundred thousand Philippine pesos
(P500,000.00) per violation.

The AMLC may promulgate rules on fines and penalties taking


into consideration the attendant circumstances, such as the
nature and gravity of the violation or irregularity.

(g) The provision of this law shall not be construed or


implemented in a manner that will discriminate against certain
customer types, such as politically-exposed persons, as well as
their relatives, or against a certain religion, race or ethnic origin,
or such other attributes or profiles when used as the only basis
to deny these persons access to the services provided by the
covered persons. Whenever a bank, or quasi-bank, financial
institution or whenever any person or entity commits said
discriminatory act, the person or persons responsible for such
violation shall be subject to sanctions as may be deemed
appropriate by their respective regulators.

There are also fines for service financial institutions. Dirty money is used to pay them so that the jeweler can come up with a
set of jewelries. You get that and sell it to the legitimate market. Dirty money then becomes good-earned money.

Misreporting covers only banks, financial service institutions, and lending, quasi-banks and money changers.

ARE THERE SECRECY LIMITATIONS/ CONFIDENTIALITY RESTRICTIONS IN THE REPORTING OF COVERED AND
SUSPICIOUS TRANSACTIONS?
When the forthwith covered transactions or suspicious transactions are with the AMLC, covered institutions are prohibited
directly or indirectly, to report to any person or entity, the media, the fact of any suspicious transactions.

Report has been made in confidence with the law and any information shall be in secrecy. Neither will it be published in any
other form such as electronic mails and other similar cases.

In case of violation thereof, the concerned officer and employee of the covered institution or media shall be held liable. You
do not publish it if it is reported.

So in the case of Trillanes, how many will be held responsible for violation the AMLA law?

There is a presumption for him na tinuod na kay gikan sa Bangko. Dili man siya abogado kay sundalo man siya. There
should be evidence to prove that this is the true account. That is the order of trial; the defendant will present his evidence.

OTHER OFFENSES PUNISHABLE UNDER THE AMLA AS AMENDED:


1. Failure to keep records
2. Malicious reporting
- committed when a person with malice or bad faith reports a completely false information regarding money
laundering transactions. Sa ato pa, dili ka liable for negligent reporting but for malicious reporting only.
-
WHAT IS THE CAUSE OF FALSE REPORTING?
Negligence on the part of the computer or the cashier. Is that malicious reporting? Malice inlvolves malfeasance. Wala gani
malice nasayop, misfeasance. What is held responsible is malicious or malfeasance in reporting.

BATACAN, CALLANTA, GINGCO, HERNANDEZ, LIM, MORTEJO, TITO, PETALLO


10
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From the lectures of Father Agustin Nazareno,
SY 2016 - 2017

WHAT ARE THE SANCTIONS FOR FAILURE TO REPORT SUSPICIOUS TRANSACTIONS AND NON-COMPLIANCE
WITH THE AMLA LAW?
The following penalties shall be imposed failure to comply with the AMLC.

1. Convicted for violations of AMLA - 6 months to 4 years imprisonment, and a fine of not less than 100K and
not more than 500K.
The offender is not entitled to remedies such are probation. As a rule, 6 months to 4 years penalty can apply for
probation, but in AMLA, it is expressedly said that probation does not apply.

2. Breach of confidentiality - 3 to 8 years imprisonment and fine not less than 500K- 1m.
You report this report based on information from a transaction that is covered or suspicious. You are breaching
confidentiality.

3. Administrative offenses- fine from 100K to 500k for officers and employees of covered institutions who
violate the provisions of the AMLA.
Any person who violates the provisions of the AMLA as amended and its IRR as well as orders and resolutions
issued by the monetary board.

END

MARCH 8, 2017 RAY GINGCO

RA 1405 has been amended. Several laws the latest of which is the AMLA.

What is the purpose of the law?

To encourage people to deposit their money in banks and thereby discourage private hoarding so the banks may lend out the
money and assist in the economic development of the country. There can be an event where there is a highest note in
circulation because people do not use the banks. That is why they cancelled the big denomination notes so that people will
be forced to use the banks and issue checks and they will know how much you are earning. But now they are finding
resistance because we have gotten used to the system by breaching it or avoid being taxed or by just keeping your money
with you and not depositing it.

The whole idea of secrecy of bank deposits is to keep it with banks so that no one will know how much money you have
because banks are sworn to secrecy. If they break the secrecy, it is a criminal offense. It says to keep your money in bank.

So what are the 2 basic prohibited acts of 1405 as amended?

First, examining, inquiring or looking into all deposits of whatever nature in banks in the Phils. including investments in bonds
issued by the Government of the Philippines, its political subdivisions and its instrumentalities by any person, government
official, bureau or office.

This is also a reason why banks are prohibited from engaging temporary personnel those who have access to the records of
depositors. Records of deposits, no problem. Deposits can be summarized without depositors and they compute how much
tax to be paid and is deducted. The earnings of the deposits can be computed without depositors. So, you can hire
messengerial service of records of deposit. The problematic thing is the depositors which the law prohibits you from divulging

Second, disclose to any person other than those mentioned in Section two hereof any information concerning said deposits
by any official or employee of a banking institution.

That is the general rule but there are atleast 15/16 exceptions.

FIRST. Upon written permission of the depositor


How does this depositor give his permission? You make him sign a waiver of his rights under the secrecy of deposits
example is a DOSRI loan.

SECOND. In cases of impeachment

BATACAN, CALLANTA, GINGCO, HERNANDEZ, LIM, MORTEJO, TITO, PETALLO


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From the lectures of Father Agustin Nazareno,
SY 2016 - 2017

Case of Corona. What was the argument of Corona? He said the deposits are not mine, Im just a representative, a trustee of
this assets. Its in your name. You should put it down. Your obligation is to put down your SALN. That means you can include
that in your liability.

There was also a jurisprudential exception. Remember in the case where a victim of child abuse. He filed a case for the
forfeiture of the foreign currency deposits of the respondent. The bank refused and then the CA forced the bank to reveal and
the SC said that the whole purpose of the bank secrecy law is not to shield crime or to protect the guilty. He should be made
to answer of his acts and to make him pay for the damages caused by his acts.

(Words of wisdom about classless society)

What is the reason why Congress still does not want to lift the secrecy of bank deposits law?
If you examine the debates in Congress, the reason is kidnappings. If you are known to be a signatory of a very fat deposit,
the kidnappers wont have a homework to do. That is also why our corporate financial statements does not reveal the highest
salaries of the executives. It is always grouped. The rule in the Phil. Stock Exchange is listed corporation must reveal the
aggregate pay of the 5 top employees of the corporation.

THIRD. Upon order of a competent court in cases of bribery or dereliction of duty of public officials
That is the case of Gen. Garcia. Remember? Gen. Garcia is the comptroller of AFP yet he has a great wealth which was
found when his son went to state carrying more than the jurisdictional amount of AMLA. He later on pleaded to a lower
offense and it was upheld by the Sandiganbayan.

FOURTH. In cases where the money deposited or invested is the subject matter of the litigation

FIFTH. Upon the order of the court in cases of unexplained wealth under Sec. 8 of Anti-Graft and Corrupt Practices
Act

PNB vs. GANCAYCO 15 SCRA 91

It is the so-called lifestyle audit.

We are unsuccessful in criminally prosecuting unexplained wealth but only civilly.

In US, the cases of unexplained wealth filed are prosecuted under RICO Law. Racketeering, Influence, Conspiracy,
Organized Crime. The theory is, if you can assemble all these criminal acts, none of which are criminal standing alone but its
end is the commission of crime relating to unexplained wealth if it is aggregated, then you have RICO conviction. After
indictment, there is already a freeze order.

SIXTH. Upon order of the Commissioner of Internal Revenue with respect to bank deposits of decedent for the
purpose of determining the decedents gross estate. (NOT MENTIONED BY FATHER GOT THIS FROM PREVIOUS
TSN)
Namatay kaunya dako dako kag obituary dinha . Adto dayun ang BIR, bisita dayun, gihaya ka pa gani muduol dayun na sa
imong mga bulak. Suruyon ka sa BIR. Tan awa nang nganha sa Inquirer mga dagko kaayog obituary notice nangita na silag
labad sa ulo.

SEVENTH. Upon order of the Commissioner of Internal Revenue in respect to Bank deposits of a taxpayer who has
filed an application for a compromise of his tax liability under Sec. 204-a (2) of the NIRC by reason of financial
incapacity to pay his tax liability. 204-A NIRC

SEC. 204. Authority of the Commissioner to Compromise, Abate and Refund or Credit Taxes. -
The Commissioner may -
(A) Compromise the payment of any internal revenue tax, when:
(1) A reasonable doubt as to the validity of the claim against the taxpayer exists; or
(2) The financial position of the taxpayer demonstrates a clear inability to pay the assessed tax.

Ana siya di ko kabayad sa akong utang kay pobre ko. Then he is discovered to have a bank account. Kay sige man siya ug
adto aning bangkoha. So the CIR asks for an order to examine the bank account of this taxpayer claiming to be a pauper.
But he has a bank account.
BATACAN, CALLANTA, GINGCO, HERNANDEZ, LIM, MORTEJO, TITO, PETALLO
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From the lectures of Father Agustin Nazareno,
SY 2016 - 2017

Thats why the bank account needs to be examined. Pag-abri sa bank account kay wa naman diay zero balance naman diay.
The compromise will be granted. But if the CIR finds out that he has money what will happen to him? That would be perjury
because you applied for a compromise and your application is verified. Not only under oath but verified. Naa man didto that
the taxpayer understood blah blah blah.

Verified petition so there is intent to defraud there. Perjury ka. If upon order of the court have access to bank accounts and
records.

EIGHT. Upon order of the Court in cases filed by the Ombudsman upon the latters authority to examine and have
access to bank accounts and records in relation to Sec. 15 (a) RA 6770.
In relation to 6770 that is the Anti-graft?!?

NINTH. In the case of unclaimed balances (Sec. 2, Act No. 3936)


Every year the bank must submit a list to the BSP of the unclaimed deposits. Balances that have remained untouched in the
bank for ten (10) years. Meaning there is no deposit there is no withdrawal. If you have a deposit in the bank and it has not
been touched for five (5) years then it will segregated from the ordinary accounts. It becomes a dormant account. And it can
only be opened if there is clearance from the head office. (So pag 5 dormant account pa siya pag 10 kay unclaimed deposits
na siya)

If it still dormant up to ten years then it becomes unclaimed balance.

So what happens?
It now becomes listed. Then the BSP if it is worth its while it will send it to the SOLGEN office then the SOLGEN will file an
escheat proceedings. That is how the government will gain ownership. That is a mode of acquisition. If this is deposited in the
bank and the depositor is already unknown and several notices have been sent then there is now publication but there is still
no response then it becomes forfeited in favor of the Treasury of the Philippines.

Once the order is given then the bank will remit the amount to the Philippine Treasury. So that is the Unclaimed Balances
Act, ten (10) years na wala naglihok. No deposits no withdrawals. Pero ang bangko karon kay automatic man na. Naa man
silay deduction sa mga dormant accounts. There is a fee deducted I think mga fifty pesos a month. Sige lang ug deduct
deduct. Pagtan-aw nimo wa na. 50 na sad ang nahibilibn.

The SOLGEN will not file maski 1000 pesos pa na dili na siya mufile ug escheat proceeding. One hundred thousand pa
tingali mu-file ang SOLGEN. Huna-huna ra gud, kung ako ang SOLGEN paluparon ko nimo para sa 50 pesos. Mangita na
lang na sila ug staff sa SOLGEN na taga-Davao.

But the moment you appear and say na I am Juan de la Cruz the owner of the bank account. NO MORE! They cannot
proceed with the escheat proceeding. If they proceed what will happen? That is a naked violation of Article 3 section 1 of the
Constitution: No person shall be deprived of life, liberty or property without due process of law. Ako man ang tag-iya. What is
your mode of acquisition pagpangilog na imohang gibuhat. Ngano ang bangko dili man kaingon na akoa na. For the same
reason that all of the confiscated monies of the Jews during the World War 2, the bank where the money is kept cannot
appropriate it for itself. (Story about golden tooth. Dili na kausap ug bulalo!!! Nothing false in this world will do man any good!
With the exception of false teeth!)

UNCLAIMED BALANCES ACT


PRESIDENTIAL DECREE No. 679 April 2, 1975
AMENDING ACT NUMBERED THIRTY NINE HUNDRED AND THIRTY SIX, AN ACT REQUIRING BANKS, TRUST
CORPORATIONS, AND BUILDING AND LOAN ASSOCIATIONS, TO TRANSFER UNCLAIMED BALANCES HELD BY
THEM TO THE TREASURER OF THE PHILIPPINES AND FOR OTHER PURPOSES.
WHEREAS, Act No. 3936 requires the publication of a sworn statement of unclaimed balances in banks
once a week of three consecutive weeks in at least two newspapers of general circulation in the locality where the
banks are situated, if there be any, and if there is none, in the City of Manila, one in English and one in Spanish, the
cost of which shall be paid by the Bureau of Treasury, which shall be reimbursed out of the escheated funds;
WHEREAS, the law also provides for the publication of summons and a notice upon the commencement of
the prescribed judicial proceedings for the escheat of unclaimed balances;

BATACAN, CALLANTA, GINGCO, HERNANDEZ, LIM, MORTEJO, TITO, PETALLO


13
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From the lectures of Father Agustin Nazareno,
SY 2016 - 2017

WHEREAS, past experience has shown that the cost of publication required by law, the increase of which
has been substantial the past few years, is more than the aggregate amount of the unclaimed balances to be
escheated, the average amount of which is small;
WHEREAS, there is a felt need to simplify the procedure for the escheat of unclaimed balances for the
purpose of reducing the expenses therefor;
NOW, THEREFORE, I, FERDINAND E. MARCOS, President of the Philippines, by virtue of the powers in me
vested by the Constitution, do hereby decree and order:

Section 1. Sections 1, 2, 3, 4, and 5 of Act No. 3936 are hereby amended to read as follows:

"Sec. 1. "Unclaimed balances", within the meaning of this Act, shall include credits or deposits of money,
bullion, security or other evidence of indebtedness of any kind, and interest thereon with banks, buildings and loan
associations, and trust corporations, as hereinafter defined, in favor of any person known to be dead or who has
not made further deposits or withdrawals during the preceding ten years or more. Such unclaimed balances,
together with the increase and proceeds thereof, shall be deposited with the Treasurer of the Philippines to the
credit of the Government of the Republic of the Philippines to be used as the National Assembly may direct.

"Banks", "building and loan associations" and "trust corporations", within the meaning of this Act, shall
refer to institutions defined under Section two, thirty-nine and fifty-six, respectively, of Republic Act Numbered
Three Hundred Thirty Seven, otherwise known as the General Banking Act, as amended, whether organized under
special charters or not.

"Sec. 2. Immediately after the taking effect of this Act and within the month of January of every odd year, all
banks, building and loan associations, and trust corporations shall forward to the Treasurer of the Philippines a
statement, under oath, of their respective managing officers, of all credits and deposits held by them in favor of
persons known to be dead, or who have not made further deposits or withdrawals during the preceding ten years or
more, arranged in alphabetical order according to the names of creditors and depositors, and showing:

"(a) The names and last known place of residence or post office addresses of the persons in whose favor
such unclaimed balances stand;
"(b) The amount and the date of the outstanding unclaimed balance and whether the same is in money or in
security, and if the latter, the nature of the same;
"(c) The date when the person in whose favor the unclaimed balance stands died, if known, or the date
when he made his last deposit or withdrawal; and
"(d) The interest due on such unclaimed balance, if any, and the amount thereof.

"A copy of the above sworn statement shall be posted in a conspicuous place in the premises of the bank,
building and loan association, or trust corporation concerned for at least sixty days from the date of filing thereof:
Provided, That immediately before filing the above sworn statement, the bank, building and loan association, and
trust corporation shall communicate with the person in whose favor the unclaimed balance stands at his last known
place of residence or post office address.

"It shall be the duty of the Treasurer of the Philippines to inform the Solicitor General from time to time the
existence of unclaimed balances held by banks, building and loan associations, and trust corporations.

"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, in which shall be
joined as parties the bank, building and loan association or trust corporation and all such creditors or depositors.
All or any of such creditors or depositors or banks, building and loan association or trust corporations may be
included in one action. Service of process in such action or actions shall be made by delivery of a copy of the
complaint and summons to the president, cashier, or managing officer of each defendant bank, building and loan
association or trust corporation and by publication of a copy of such summons in a newspaper of general
circulation, either in English, in Filipino, or in a local dialect, published in the locality where the bank, building and
loan association or trust corporation is situated, if there be any, and in case there is none, in the City of Manila, at
such time as the court may order. Upon the trial, the court must hear all parties who have appeared therein, and if it
be determined that such unclaimed balances in any defendant bank, building and loan association or trust
corporation are unclaimed as hereinbefore stated, then the court shall render judgment in favor of the Government
BATACAN, CALLANTA, GINGCO, HERNANDEZ, LIM, MORTEJO, TITO, PETALLO
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From the lectures of Father Agustin Nazareno,
SY 2016 - 2017

of the Republic of the Philippines, declaring that said unclaimed balances have escheated to the Government of the
Republic of the Philippines and commanding said bank, building and loan association or trust corporation to
forthwith deposit the same with the Treasurer of the Philippines to credit of the Government of the Republic of the
Philippines to be used as the National Assembly may direct.

"At the time of issuing summons in the action above provided for, the clerk of court shall also issue a
notice signed by him, giving the title and number of said action, and referring to the complaint therein, and directed
to all persons, other than those named as defendants therein, claiming any interest in any unclaimed balance
mentioned in said complaint, and requiring them to appear within sixty days after the publication or first
publication, if there are several, of such summons, and show cause, if they have any, why the unclaimed balances
involved in said action should not be deposited with the Treasurer of the Philippines as in this Act provided and
notifying them that if they do not appear and show cause, the Government of the Republic of the Philippines will
apply to the court for the relief demanded in the complaint. A copy of said notice shall be attached to, and published
with the copy of, said summons required to be published as above, and at the end of the copy of such notice so
published, there shall be a statement of the date of publication, or first publication, if there are several, of said
summons and notice. Any person interested may appear in said action and become a party thereto. Upon the
publication or the completion of the publication, if there are several, of the summons and notice, and the service of
the summons on the defendant banks, building and loan associations or trust corporations, the court shall have full
and complete jurisdiction in the Republic of the Philippines over the said unclaimed balances and over the persons
having or claiming any interest in the said unclaimed balances, or any of them, and shall have full and complete
jurisdiction to hear and determine the issues herein, and render the appropriate judgment thereon.

"Sec. 4. If the president, cashier or managing officer of the bank, building and loan association, or trust
corporation neglects or refuses to make and file the sworn statement required by this action, such bank, building
and loan association, or trust corporation shall pay to the Government the sum of five hundred pesos a month for
each month or fraction thereof during which such default shall continue.

"Sec. 5. Any bank, building and loan association or trust corporation which shall make any deposit with the
Treasurer of the Philippines in conformity with the provisions of this Act shall not thereafter be liable to any person
for the same and any action which may be brought by any person against in any bank, building and loan
association, or trust corporation for unclaimed balances so deposited with the Treasurer of the Philippines shall be
defended by the Solicitor General without cost to such bank, building and loan association or trust corporation."

Section 2. This Decree shall take effect immediately.

DONE in the City of Manila, this 2nd day of April, in the year of Our Lord, nineteen hundred and seventy-five.

BULK SALES LAW


ACT NO. 3952
AN ACT TO REGULATE THE SALE, TRANSFER, MORTGAGE OR ASSIGNMENT OF GOODS, WARES,
MERCHANDISE, PROVISIONS OR MATERIALS, IN BULK, AND PRESCRIBING PENALTIES FOR THE VIOLATION OF
THE PROVISIONS THEREOF

Section 1. This Act shall be known as "The Bulk Sales Law."

Sec. 2. Sale and transfer in bulk. Any sale, transfer, mortgage or assignment of a stock of goods, wares,
merchandise, provisions, or materials otherwise than in the ordinary course of trade and the regular prosecution of
the business of the vendor, mortgagor, transferor, or assignor, or sale, transfer, mortgage or assignment of all, or
substantially all, of the business or trade theretofore conducted by the vendor, mortgagor, transferor, or assignor, or
of all, or substantially all, of the fixtures and equipment used in and about the business of the vendor, mortgagor,
transferor, or assignor, shall be deemed to be a sale and transfer in bulk, in contemplation of this Act: Provided,
however, That if such vendor, mortgagor, transferor or assignor, produces and delivers a written waiver of the
provisions of this Act from his creditors as shown by verified statements, then, and in that case, the provisions of
this section shall not apply.

Sec. 3. Statement of creditors. It shall be the duty of every person who shall sell, mortgage, transfer, or
assign any stock of goods, wares, merchandise, provisions or materials in bulk, for cash or on credit, before
receiving from the vendee, mortgagee, or his, or its agent or representative any part of the purchase price thereof,
BATACAN, CALLANTA, GINGCO, HERNANDEZ, LIM, MORTEJO, TITO, PETALLO
15
BANKING LAWS TSN
From the lectures of Father Agustin Nazareno,
SY 2016 - 2017

or any promissory note, memorandum, or other evidence therefor, to deliver to such vendee, mortgagee, or agent,
or if the vendee, mortgagee, or agent be a corporation, then to the president, vice-president, treasurer, secretary or
manager of said corporation, or, if such vendee or mortgagee be a partnership firm, then to a member thereof, a
written statement, sworn to substantially as hereinafter provided, of the names and addresses of all creditors to
whom said vendor or mortgagor may be indebted, together with the amount of indebtedness due or owing, or to
become due or owing by said vendor or mortgagor to each of said creditors, which statement shall be verified by an
oath to the following effect:
PHILIPPINE ISLANDS
PROVINCE OR CITY OF _________________}
Before me, the undersigned authority, personally appeared __________________ (vendor, mortgagor, agent
or representative, as the case may be), bearing cedula No. ____________ issued at ___________ on the day of
_____________ who, by me being first duly sworn, upon his oath, deposes and states that the foregoing statement
contains the names of all of the creditors of ________________ (vendor, or mortgagor) together with their
addresses, and that the amount set opposite each of said respective names, is the amount now due and owing, and
which shall become due and owing by _____________ (vendor or mortgagor) to such creditors, and that there are
no creditors holding claims due or which shall become due, for or on account of goods, wares, merchandise,
provisions or materials purchased upon credit or on account of money borrowed, to carry on the business of which
said goods, wares, merchandise, provisions or materials are a part, other than as set forth in said statement.
______________________
Subscribed and sworn to before me this _______ day of ______, 19___, at ________

Sec. 4. Fraudulent and void sale, transfer or mortgage. Whenever any person shall sell, mortgage,
transfer, or assign any stock of goods, wares, merchandise, provisions or materials, in bulk, for cash or on credit,
and shall receive any part of the purchase price, or any promissory note, or other evidence of indebtedness for said
purchase price or advance upon mortgage, without having first delivered to the vendee ormortgagee or to his or its
agent or representative, the sworn statement provided for in section three hereof, and without applying the
purchase or mortgage money of the said property to the pro rata payment of the bona fide claim or claims of the
creditors of the vendor or mortgagor, as shown upon such sworn statement, he shall be deemed to have violated
this Act, and any such sale, transfer or mortgage shall be fraudulent and void.

Sec. 5. Inventory. It shall be the duty of every vendor, transferor, mortgagor, or assignor, at least ten days
before the sale, transfer or execution of a mortgage upon any stock of goods, wares, merchandise, provisions or
materials, in bulk, to make a full detailed inventory thereof and to preserve the same showing the quantity and, so
far as is possible with the exercise of reasonable diligence, the cost price to the vendor, transferor, mortgagor or
assignor of each article to be included in the sale, transfer or mortgage, and notify every creditor whose name and
address is set forth in the verified statement of the vendor, transferor, mortgagor, or assignor, at least ten days
before transferring possession thereof, personally or by registered mail, of the price, terms conditions of the sale,
transfer, mortgage, or assignment.

Sec. 6. Any vendor, transferor, mortgagor or assignor of any stock of goods, wares, merchandise,
provisions or materials, in bulk, or any person acting for, or on behalf of any such vendor, transferor, mortgagor, or
assignor, who shall knowingly or willfully make, or deliver or cause to be made or delivered, a statement, as
provided for in section three hereof, which shall not include the names of all such creditors, with the correct amount
due and to become due to each of them, or shall contain any false or untrue statement, shall be deemed to have
violated the provisions of this Act.

Sec. 7. It shall be unlawful for any person, firm or corporation, as owner of any stock of goods, wares,
merchandise, provisions or materials, in bulk, to transfer title to the same without consideration or for a nominal
consideration only.

Sec. 8. Nothing in this Act contained shall apply to executors, administrators, receivers, assignees in
insolvency, or public officers, acting under judicial process.

Sec. 9. The sworn statement containing the names and addresses of all creditors of the vendor or
mortgagor provided for in section three of this Act, shall be registered in the Bureau of Commerce. For the
registration of each such sworn statement a fee of five pesos shall be charged to the vendor or mortgagor of the
stock of goods, wares, merchandise, provisions or materials, in bulk.

BATACAN, CALLANTA, GINGCO, HERNANDEZ, LIM, MORTEJO, TITO, PETALLO


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From the lectures of Father Agustin Nazareno,
SY 2016 - 2017

Sec. 10. The provisions of this Act shall be administered by the Director of the Bureau of Commerce and
Industry, who is hereby empowered, with the approval of the Department Head, to prescribe and adopt from time to
time such rules and regulations as may be deemed necessary for the proper and efficient enforcement of the
provisions of this Act.

Sec. 11. Any person violating any provision of this Act shall, upon conviction thereof, be punished by
imprisonment not less than six months, nor more than five years, or fined in sum not exceeding five thousand
pesos, or both such imprisonment and fine, in the discretion of the court.

Sec. 12. This Act shall take effect on its approval.


Approved: 01 December 1972

Now there may be an examination of secrecy of bank deposit without need of a court order. And this are in three cases:
Rule 11.2. of the IRR of RA 9194.
Authority to Inquire into Bank Deposits WITHOUT COURT ORDER. - The AMLC MAY INQUIRE INTO OR EXAMINE
DEPOSIT AND INVESTMENTS WITH ANY BANKING INSTITUTION OR NON-BANK FINANCIAL INSTITUTION AND
THEIR SUBSIDIARIES AND AFFILIATES WITHOUT A COURT ORDER WHERE ANY OF THE FOLLOWING UNLAWFUL
ACTIVITIES ARE INVOLVED:
(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. 12, 13, 14, 15 AND 16 of Republic Act No. 9165, otherwise known as the
COMPREHENSIVE Dangerous Drugs Act of 2002;
(c) Hijacking and other violations under Republic Act No. 6235; destructive arson and murder, as defined under the
Revised Penal Code, as amended, including those perpetrated by terrorists against noncombatant persons and
similar targets.

So terrorist money can be the subject of sequestration without need of court order. Kidnapping, drugs proceeds from
importation or manufacturing. You can after it without court order. Money that is used for the creation of bombs. If they are
deposited in the bank accounts of known terrorist then they may be examined without need of any court order.

ELEVENTH. Upon order of the Court, if the AMLC determines that a deposit or investment with any banking
institution is related to any unlawful activities under Sec. 3, other Money Laundering Offenses.
Other crimes except those mentioned above:
(l) "Unlawful activity" refers to any act or omission or series or combination thereof involving or having relation to
the following:
(1) Kidnapping for ransom under Article 267 of Act No. 3815, otherwise known as the Revised Penal Code, as
amended;
(2) Sections 3, 4, 5, 7, 8 and 9 of Article Two of Republic Act No. 6425, as amended, otherwise known as the
Dangerous Drugs Act of 1972;
(3) 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;
(4) Plunder under Republic Act No. 7080, as amended;
(5) Robbery and extortion under Articles 294, 295, 296, 299, 300, 301 and 302 of the Revised Penal Code, as
amended;
(6) Jueteng and Masiao punished as illegal gambling under Presidential Decree No. 1602;
(7) Piracy on the high seas under the Revised Penal Code, as amended and Presidential Decree No. 532;
(8) Qualified theft under, Article 310 of the Revised Penal Code, as amended;
(9) Swindling under Article 315 of the Revised Penal Code, as amended;
(10) Smuggling under Republic Act Nos. 455 and 1937;
(11) Violations under Republic Act No. 8792, otherwise known as the Electronic Commerce Act of 2000;
(12) Hijacking and other violations under Republic Act No. 6235; destructive arson and murder, as defined under the
Revised Penal Code, as amended, including those perpetrated by terrorists against non-combatant persons and
similar targets;
(13) Fraudulent practices and other violations under Republic Act No. 8799, otherwise known as the Securities
Regulation Code of 2000;
(14) Felonies or offenses of a similar nature that are punishable under the penal laws of other countries.

BATACAN, CALLANTA, GINGCO, HERNANDEZ, LIM, MORTEJO, TITO, PETALLO


17
BANKING LAWS TSN
From the lectures of Father Agustin Nazareno,
SY 2016 - 2017

TWELFTH. Inquiry into or examination of any deposit when the examination is made by the Bangko Sentral to
ensure compliance with the Anti-Money Laundering Law.

Those are the instances where the secerecy of bank deposits may set aside.

Now why is garnishing non-violative of the secrecy of bank deposits law?


Now, for example you are suing your employer and then someone advised you to garnish the employers bank account.
Garnishment is not a violation because you do not reveal you only attach what is there. You just freeze it there to answer for
the judgment of the tribunal. Once the decision comes out then you execute it. You do not really inquire how much is the
balance.

All right that is it, SECRECY OF BANK DEPOSITS and UNCLAIMED BALANCES.

Last is the Truth in lending Act. The truth? What is the troth?!?
What is the actual effective interest rate? What is the amount which is the basis of the interest. What are the charges aside
from the application, credit investigation fee that I must pay to the bank. So these three already satisfy the truth in lending
act. The purpose of which is to protect the consumers. So that we may be given the true costs of the credit that we are
availing. So what are the responsibilities:

(From the OLD TSN) Obligation of furnishing to each person to whom credit is extended prior to the consummation of the
transaction a clear statement in writing usually called a disclosure statement setting forth to the extent possible the following:
(SEVEN items that must be declared):
1. The cash or delivered price Ug dili nimo utangon pila man na, kining ref na imo paliton pila man ni? Kining
TV, pila man ni? 12in, 19in, 32in? Kanang naay curve? [bisaya anecdote about yuta na rolling na himo dos ka
ektarya nalang]
2. The amounts, if any, to be credited as DP or trade in value. Naa kay trade-in kay ilisdan nimo, that is equivalent
to a DP. Or naa kay DP. 0 kay no down payment man.
3. The difference between amounts in a cash or delivered price less the amounts that are considered down
payment or trade in value.
4. Charges individually itemizedwhich are paid or to be paid by virtue of the transaction but which are not
incident. What is an example of this? Palit kag motor, installment. Rehistro sa motor. That is not in connection
with the extension of credit. Naa silay item dira, credit investigation fee. Kana! That is in connection with the
extension of credit. Unsa man ning credit investigation fee? Diba gina-investigate ka man: aha ka gatrabaho,
pila imo sweldo, etc. Whether you are credit-worthy. This is in connection with the extension of credit. Kanang
bayran nimo insurance sa motor? Lain man na, that is not connected. Those are non-credit charges.
5. The amount to be financedIt could include the non-credit charges. It could include the cash price of the
item/service you are acquiring.
6. The finance charge expressed in terms of pesos and centavos. That is the interest that you pay. It is expressed
in pesos and centavos. The law requires two expressions of the financed charge. Pesothe percentage
.bears to the total amount to expressed as a simple annual rate. So the interest rate must be annualized.
violation sa TLA nang may 3% unless they put up monthly. Because what is required is that the percentage
expression of the finance charge must

Section 1 of R.A. No. 3765 provides that prior to the consummation of a loan transaction, the bank, as creditor, is
obliged to furnish a client with a clear statement, in writing, setting forth, to the extent applicable and in accordance
with the rules and regulations prescribed by the Monetary Board of the Central Bank of the Philippines, the
following information:
(1) the cash price or delivered price of the property or service to be acquired;
(2) the amounts, if any, to be credited as down payment and/or trade-in;
(3) the difference between the amounts set forth under clauses (1) and (2);
(4) the charges, individually itemized, which are paid or to be paid by such person in connection with the
transaction but which are not incident to the extension of credit;
(5) the total amount to be financed;
(6) the finance charges expressed in terms of pesos and centavos; and
(7) the percentage that the finance charge bears to the total amount to be financed expressed as a simple annual
rate on the outstanding unpaid balance of the obligation.

What are finance charges?


BATACAN, CALLANTA, GINGCO, HERNANDEZ, LIM, MORTEJO, TITO, PETALLO
18
BANKING LAWS TSN
From the lectures of Father Agustin Nazareno,
SY 2016 - 2017

Amounts to be paid incident to the payment of credit (interest, discounts, collection fees, credit investigation, attorneys fees.)
Pabayron ka notaryo.

What are the non-finance charges? (Insurance premiums, registration fees of cars/motors)
Palit gani kag motor in installment TLA na. Palit gani ka ug subdivision lot walat balay lay TLA na. Naa man nay interest then
TLA na. Pero mupalait gani kag jewelry na lay-away dili na siya lending. That is a security.

END OF FINAL EXAM COVERAGE

God bless!

All the days ordained for me were written in your book before one of them came to be.
Psalm 139:16

BATACAN, CALLANTA, GINGCO, HERNANDEZ, LIM, MORTEJO, TITO, PETALLO


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