Anti-Money Laundering Manual

I. Title

This Manual shall be known as the PSMBAI Anti-Money Laundering Manual implementing RA No. 9160 (the Anti-Money laundering Act of 2001 (AMLA), as amended by RA No. 9194.

II. Purpose

The Manual is promulgated to prescribe the procedures and guidelines to PSMBAI officials and employees for the implementation of the AMLA, as amended by RA No. 9194.

III. References

  1. Money Laundering and the Anti-Money Laundering Act of 2001.

  2. RA No. 9160 (as amended by RA No. 9164) —Annex "A" hereto

  3. Revised IRR, RA No. 9160 as amended by m No. 9194, by the Congressional Oversight Committee — Annex "B" hereto

IV. Reference No. 3

With reference No. 3 above is excerpted and/or referred to in the Manual for emphasis, clarity, accuracy, and relevance to the implementation of AMLA, as amended by RA No. 9194 by Postal Services Mutual Benefit Association, inc. (PSMBAI) official and employees.

V. Money Laundering

It is means by which the proceeds of an illegal activity are transacted to make them appear as coming from the legitimate sources.

VI. How Money Laundering is Carried Out

According to the Anti-Money Laundering Council (AMLC), money laundering is carried out in three (3) stages, each stage aimed at disguising the illegal origin of the money.

Stage 1. "Placement. In this stage, the money launderer palaces the proceeds from the illegal activity into financial institutions, like banks, through deposits, money orders, wire transfer or other means. The money may be mixed with the legitimate deposits, or large amount are broken up into smaller sums which are either deposited in various bank accounts or used to buy monetary instruments. These are then collected and deposited to another location. "

Stage 2. "Layering. This stage involves further distancing the proceeds of criminal activity from their origin through complex and multiple financial transactions. This may be done through the purchase and sale of investment securities, the wiring of funds through a number of accounts worldwide, or the disguised transfer of payments for non-existent goods and services.

Stage 3. "Integration. In this stage, the money launderer reenters the funds to legitimate circulation by investing in, for example, real estate or other business ventures. The money by then would appear to be entirely clean, hence, money laundering is consummated."

VII. Why id Money Laundering a problem?

The AMLC says, "Money laundering allows criminals to preserve and enjoy the proceeds of their crimes, thus providing them with the incentives and the means to continue their illegal activities. At the same time, it provides them the opportunity to appear in public like legitimate entrepreneurs. Organized crime, through money laundering, is known to have the capacity to destabilize governments and undermine their financial systems. It is thus a threat to national security.

VIII. Declaration of State Policy

  1. Protect the integrity and confidentiality of bank accounts.

  2. Ensure that the Philippines shall not be used as money laundering site for the proceeds of any unlawful activity.

  3. The Philippines shall extend cooperation in transnational investigations and prosecution of persons involved in money laundering activities wherever committed.

IX. ​Definitions. (Refer to RULE 3 Definitions of IRR RA No. 9160 as amended by RA No. 91642 Annex "A" hereto)

  1. Covered Institution

  2. Covered Transaction

  3. Monetary Instrument

  4. Offender

  5. Person

  6. Proceeds

  7. Supervising Authority

  8. Transaction

  9. Unlawful Activity​​

(A)​ Kidnapping for ransom under Article 267 of RA No. 3815, otherwise known as Revised Penal Code, as amended.

(B) Section 4, 5, 6, 8, 9, 10, 12, 13, 14, 15 and 16 of RA 9165, Comprehensive Dangerous Act.

(C) Section 3 paragraph b, c, e, g, h and I of RA 3019, as amended

(D) Plunder under RA No. 7080, as amended

(E) Robbery and Extortion under Articles 294, 296, 299, 300, 301 and 302 of the Revised Penal Code, as amended.

(F) Jueteng and Masiao, punished as illegal gambling under PD No. 1602

(G) Piracy on the high seas under the Revised Penal Code, as amended and PD No. 532

(H) Qualified theft under Article 310 of the Revised Penal code, as amended.

(I)   Qualified theft under Article 310 of the Revised Penal code, as amended.

(J)  Smuggling under RA No. 455 and 1937

(K) Violations under RA No. 8792, Electronic Commerce Act of 2000

(L)  Hijacking and other violations under RA No. 6235

(M) Fraudulent practices and other violations under RA No. 8799, the Securities Regulation Code of 2000

(N) Felonies or offenses of a similar nature to the aforementioned unlawful activities that are punishable under the penal laws of other countries.

X.  Money Laundering Offense

Money Laundering Offense — Money laundering is a crime whereby the proceeds of an unlawful activity as herein defined are transacted, thereby making them appear to have originated from legitimate sources.

XI. How Money Laundering Offense is Committed

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

b. 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 referred to in paragraph (a) above.

c. Any person knowing that any monetary instrument or property is required under this Act to be disclosed and filed with the Anti-Money Laundering Council (AMLC), fails to do so.

XII. Prevention of Money Laundering: Customer Identification Requirements

  1. Rule 5.1. Jurisdiction of Money Laundering Cases

  2. Rule 5.2. Investigation of Money Laundering Cases

  3. Rule 5.3. Attempts of Transactions.

XIII. RULE 6. Prosecution of Money Laundering

  1. Rule 6.1. Prosecution of Money Laundering

  2. Rule 6.2 AMLC files Complaint to Dept of Justice or Ombudsman

  3. Rule 6.3. Filing with Regional Trial Court after findings of probable cause.

  4. Rule 6.4. Trial in accordance with Code of Criminal Procedure

  5. Rule 6.5. Established by direct or circumstantial evidence

  6. Rule 6.6. Proof beyond reasonable doubt

  7. Rule 6.7. Elements of the offense of money laundering are separate and distinct from the offense constituting the unlawful activity.

XIV. RULE 7. Creation of Anti-Money Laundering Council (AMLC)

  1. Rule 7.1.a Composition

  2. Rule 7.1.b Unanimous Decision

  3. Rule 7.2. Function of AMLC

  4. Rule 7.3. Meetings

XV. RULE 8. Creation of Secretariat

  1. Rule 8.1. The Executive Director

  2. Rule 8.2. Composition

  3. Rule 8.3. Detail and Secondment

  4. Rule 8.4. Confidentiality Provision

XVI. RULE 9. Prevention of Money Laundering; Customer Identification

Requirements and Record Keeping

  1. Rule 9.1. Customer Identification Requirements

​a. 9.1.a Customer Identification — Covered institution shall establish and record the true identify of its clients based on official documents. They shall maintain a system of verifying the true identify of their clients and, in case of corporate clients, require a system of verifying their legal existence and organizational structure, as well as the authority and identification of all persons purporting to act on their behalf. Covered institutions shall establish appropriate systems and methods based on internationally complaint standards and adequate internal controls for verifying and recording the ü-ue and full identify of their customers.

b. 9.1.b Trustee, Nominee and Agent Accounts. — When dealing with customers who are acting as trustee, nominees, agent or in any capacity of behalf of another, covered institutions shall verify and record true and full identify of the person (s) on whose behalf a transaction is being conducted. Covered institutions shall also establish and record the true and full identify of such trustees, nominees, agent and other persons and the nature of their capacity and duties. In case a covered institution has doubts as to whether such persons are being used as dummies in circumvention of existing laws, it shall immediately make the necessary inquiries to verify the status of the business relationship between the parties.

c. 9. l.c Minimum Information/Documents Required for Individual Customers. — Covered institutions shall require customers to produce original documents of identity issued by an official authority, bearing a photograph of the customer. Examples of such documents are identity cards and passports. The following minimum information/documents shall be obtained from individual customers:

  1. Name;

  2. Present address;

  3. Permanent address;

  4. Date and place of birth;

  5. Nationality;

  6. Nature of work and name of employer or nature of self employment/business

  7. Contact numbers;

  8. Tax identification number, Social Security System number or Government Service Insurance System number;

  9. Specimen Signature;

  10. Source of fund(s); and

  11. Names of beneficiaries in case of insurance contracts and whenever applicable.

d. 9. l.d. Minimum Information/Documents Required for Corporate and Juridical Entities. — Before establishing business relationships, covered institutions shall endeavor to ensure that the customer is a corporate or juridical entity which has not been or is not in the process of being, dissolved, wound up or voided , or that its business or operations has not been or is not in the process of being, closed, shut down, phased out, or terminated. Dealings with shell companies and corporations, being legal entities which have no business substance in their own right but through which financial transactions may be conducted, should be undertaken with extreme caution. The following minimum information/documents shall be obtained from customers that are corporate or juridical entities, including shell companies and corporations.

  1. Article of IncorporationfPartnership;

  2. By-Laws;

  3. Official address or principal business address;

  4. List of directors/partners;

  5. List of principal stockholders owning at least two percent (2%) of the capital stock

  6. Contact numbers;

  7. Beneficial owners, if any; and

  8. Verification of the authority and identification of the person purporting to act on behalf of the client.

e. Rule 9. I.e. Prohibition against Certain Accounts. Covered institution shall maintain accounts only in the true and full name of the account owner or holder. The provisions of existing laws to the contrary notwithstanding anonymous accounts, accounts under fictitious names, and all other similar accounts shall be absolutely prohibited.

f. Rule 9. l.e. Prohibition against Certain Accounts without Face to face Contract. — No new accounts shall be opened and created without face-to-face contact and full compliance with the requirements under Rule 9. I.e of these Rules.

g. Rule 9.1.g. Numbered Accounts. Peso and foreign currency non-checking numbered accounts shall be allowed: Provided, That the true identity of the customers of all peso and foreign currency non-checking numbered accounts are satisfactorily established based on official and other reliable documents and records, and that the information and documents required under the provisions of these Rules are obtained are recorded by the covered institution. No peso and foreign currency non-checking accounts shall be allowed without the establishment of such identity and in the manner herein provided. The BSP may conduct annual testing for the purpose of determining the existence and true identity of the owners of such accounts.

    2. ​Rule 9.2. Record Keeping Requirements.

a. Rule 9.2.a. Record Keeping: Kinds of Records and Period for Retention. — All records of all transactions of covered institutions shall be maintained and safely stored for five (5) years from the dates of transactions. Said records and files shall contain the full and true identity of the owners or holders of the accounts involved in the covered transactions and all other customer identification documents. Covered institutions shall undertake the necessary adequate security measures to ensure the confidentiality of such file. Covered institutions shall prepare and maintain documentation, in accordance with the aforementioned client identification requirements, on their customer accounts, relationships and transactions such that any account, relationship or transaction can be so reconstructed as to enable the AMLC, and/or the courts to establish an audit trails for money laundering.

b. Rule 9.2.b. Existing and New Accounts and New Transactions — As records of existing and new accounts and of new transactions shall be maintained and safely stored for five (5) years from October 17, 2001 or from the dates of the accounts or transactions, whichever is later.

c. Rule 9.2.c. Closed Accounts. With respect to closed accounts, the records on customer identification, account files and business correspondence shall be preserved and safely stored for at least five (5) years from the dates when they were closed.

d. Rule 9.2.d. Retention of Records in Case a Money Laundering Case has been Filed in Court. — If a money laundering case based on any record kept by the covered institution concerned has been filed in court, said file must be retained beyond the period stipulated in the three (3) immediately preceding sub-Rules, as the case may be, until it is of 18 confirmed that the case has been finally resolved or terminated by the court.

e. Rule 9.2.e. Form of Records. — Records shall be retained as originals in such forms as are admissible in court pursuant to existing laws and the applicable rules promulgated by the Supreme Court.

     3. Rule 9.3 Reporting of Covered Transactions

a.