North Point

On Aug. 20, the Anti-Money Laundering Council (AMLC), through its secretariat, published its Rules of Procedure in Administrative Cases under R.A. 9160 or the Anti-Money Laundering Act (AMLA) of 2001. These rules seek to protect and preserve the integrity and confidentiality of bank accounts and to ensure that our country shall not be used as a haven for money laundering, financing of terroristic activities and other crimes.

Meant to make administrative investigations quick and efficient, the proceedings are summary, without need of utilizing the very technical rules of evidence that are characteristic of trials before our regular courts. No motions or requests for clarifications, dismissal, quashal or other temporary orders are to be entertained.

Sanctions are defined as actions taken by the AMLC that shall include both penalty and non-penalty measures such as assessment or monetary sanctions, reprimand or formal censure, warning that puts a respondent on guard against the consequence of impending or future violations and restoration which refers to the restitution of the value of a monetary instrument or property that was released in violation of a freeze order, provisional asset or asset preservation order. Interestingly, one is considered to have committed a violation of the AMLA or any of its regulations on a “per order,” “per account,” “per transaction,” “per customer,” or “per examination or daily basis.” One violation is one count.

In determining what particular sanctions are to be imposed, “attendant circumstances” such as asset size or financial capability of the respondents to comply with the AMLA, and the gravity of the violation are taken into account. On the other hand, respondent’s history of non-compliance, concealment of violation, material misrepresentation, are considered aggravating circumstances. However, one’s liability can be lessened if there is voluntary disclosure, or when corrective measures have been taken to correct any findings by the AMLC’s compliance group or if the respondent’s AML rating is 3 or 4.

But the ordinary Filipino would probably query why there is a need for these new processes to take place, specifically in relation to a crime that appears to have such a tremendous effect on Third World or developing countries such as ours?

It is crime where income of criminals is disguised as coming from legitimate sources or earned via legal means. It happens when the proceeds of a crime are channeled into the financial or banking system and are reduced to seemingly valid monetary documents or financial instruments and are utilized in the ordinary course of business. These monetary transactions that appear to be regular are actually funded by the money of individuals involved in illegal drugs, robbery, kidnapping, illegal gambling and even terrorism.

Money laundering is a criminal offense because it allows criminals to enrich themselves by using the financial system to “cleanse” the proceeds of their illegal activities. Banks are deceived because of the heaps of legal transactions that these money gets mixed with. At the end of the day, no one would know the difference because professional money launderers openly assist other fellow launderers and their deep connections with syndicates have been formidable and challenging to break down.

When dirty money enters the economy, it destroys the financial institutions, the professionalism and competence of its staff, and erodes its reputation and integrity. When trust is lost, the populace would hesitate to participate in boosting the economy. Executive time and resources are wasted on legal cases, regulatory and legislative investigations, and staging stakeholder management campaigns.

Money laundering promotes the proliferation of graft, crime, moral and overall societal decay. It weakens social and political institutions when communities embrace the culture of avarice and greed brought about by the infiltration of criminal funds into their everyday lives. Net result is political and economic instability. The sad fact is that money launderers favor small and underdeveloped countries, piping their resources into legitimate industries, while bleeding the people dry, in the long run.

It is for this reason that the AMLC should be empowered to pin down individuals and entities who engage in this loathsome crime. More forensic, intelligence, technical and legal support should be provided to it in order to capably determine, trace, confiscate and seize these illegal proceeds of criminals and syndicates.

Money crimes and all their by-products and derivatives should not be allowed to wipe out the economic gains that our country has achieved so far.


Ariel F. Nepomuceno is a management consultant on strategy and investment.