R.A.

9160
Anti-Money Laundering Act of 2001 As Amended by R.A 9194

Money Laundering

- is a crime whereby the proceeds of an unlawful activity as defined in the AMLA are transacted or attempted to be transacted to make them appear to have originated from legitimate sources.

Unlawful Activities

Stages of Money Laundering

1. Placement involves initial placement or introduction of the illegal funds into the financial system. Banks and other financial institutions are usually used at this point.

Examples: 1. Deposit of cash in Bank 2. Convert cash into Financial Instruments such as money orders or checks 3. Purchase of an Insurance Policy or Shares of Stock

2. 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.

Examples 1. Transfer the Funds electronically to other accounts in various jurisdictions 2. Disguise the transfer as payment for goods or services or loans 3. Transfer the funds to shell corporations

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

Who Commits the Offense?

1. Money Launderer

- Any person knowing that any monetary instrument or property represents, involves or relates to the proceeds of an unlawful activity, transacts or attempts to transact said instrument or property.

2. Facilitator
- Any person knowing that any monetary instrument or property involves the proceeds of any unlawful activity, performs or fails to perform any act as a result of which he facilitates the offense of money laundering.

3. Person who fails to report a covered transaction to the AMLC Any person knowing that any monetary instrument or property is required to be disclosed and filed with the Anti-Money Laundering Council, fails to do so.

Offenses punishable under RA9160 are the following: 1.) The crime of money laundering itself 2.) Failure to keep records 3.) Failure to report covered transactions 4.) Malicious reporting 5.) Breach of confidentiality

Creation of AMLC
SEC Chairman (Member)

BSP Governor (Chairman)

Insurance Commission Commissioner (Member)

Jurisdiction
1. The Regional Trial Court (RTC) 2. Sandiganbayan - for public officials and private persons who are in conspiracy with such public officials JURISDICTION

Freezing of Monetary Instrument or Property

The Court of Appeals, upon application ex parte by the AMLC, shall issue a freeze order, which shall be effective immediately. The freeze order shall be for a period of twenty (20) days unless extended by the Court. (NOTE: Freeze Orders (FOs) issued by the AMLC
shall be valid indefinitely until a specific order from the Court of Appeals and/or the Supreme Court is issued therefor. Branches should coordinate with Compliance Unit and Law Division before releasing the deposits.)

Different Forms of Money Laundering (addl info)

1. Structuring: Often known as "smurfing," it is a method of placement by which cash is broken into smaller deposits of money, and, then used to purchase bearer instruments such as money orders and then deposits this again in smaller amounts.

2. Bulk cash smuggling: Physically smuggling cash to another jurisdiction with greater bank secrecy or less rigorous money laundering enforcement.

3. Cash-intensive business: A business involved in receiving cash will use its accounts to deposit both legitimate and criminally derived cash while claiming all of it as legitimate earnings even if the business has no legitimate activity.

4. Trade-based laundering. Underor over-valuing invoices in order to disguise the movement of illegally obtained money.

5. Shell companies and trusts: Trusts and corporate vehicles, unless required by law, do not need to disclose their true and beneficial owner.

6. Casinos: An individual can walk into a casino with cash and buy chips, play for a while and then cash his chips for which he will be issued a check. The money launderer can deposit the check and claim it as gambling winnings.

7. Real estate: Real estate may be purchased with illegal proceeds and then sold. The proceeds from the sale then appears to be legitimate. However, the price of the property is manipulated. The seller will agree to a contract that under-represents the value of the property and will receive the criminal proceeds to make up the difference.

Q. Define Money Laundering. What are the three (3) stages in money laundering? (3%) (2010 Bar Exam Question)
A. Money Laundering is a crime whereby the proceeds of an unlawful activity as defined in the AMLA are transacted or attempted to be transacted to make them appear to have originated from legitimate sources. The 3 stages are: placement, moving the funds from direct association with the crime; layering, disguising the trail to foil pursuit; and, integration, making the money available to the criminal, once again, with its occupational and geographic origins hidden from view.

Question. - Don Gabito, a philanthropist, offered to fund several projects of the Mayor. He opened an account in the Mayors name and regularly deposited various amounts ranging from P500,000.00 to P1 Million. From this account, the Mayor withdrew and used the money for constructing feeder roads, barangay clinics, repairing schools and for all other municipal projects. It was subsequently discovered that Don Gabito was actually a jueteng operator and the amounts he deposited were proceeds from his jueteng operations. What crime/s were committed? Who are criminally liable? Explain. (6%) (2005 Bar Exam)

Answer.- Don Gabito violated the Anti-Money Laundering Act (Sec. 4, R.A. No. 9160) for knowingly transacting money as property which involves or relates to the proceeds of an unlawful activity such as jueteng. In addition, he may be prosecuted for liability as a jueteng operator. (R.A. No. 9287) The mayor who allowed the opening of an account in his name is likewise guilty for violation of the AMLA. He, knowing that the money instrument or property involves the proceeds of an unlawful activity, performs or fails to perform any act which results in the facilitation of money laundering.