AMLC’s new guidelines on transaction reporting, compliance submissions for covered entities
Under the Anti-Money Laundering Act (AMLA), those classified as covered persons are mandated to report to the Anti-Money Laundering Council (AMLC) all covered transactions and suspicious transactions within five working days from occurrence thereof, unless a different period not exceeding 15 working days is prescribed.
On Dec. 11, 2024, pursuant to its function to require covered or suspicious transactions reports from covered persons, the AMLC issued Regulatory Issuance No. 2, Series of 2024 or the Guidelines on Transaction Reporting and Compliance Submissions (GoTRACS).
Intended to provide covered persons under the AMLA with a set of guidelines to carry out their duties on transaction reporting, GoTRACS establishes standardized rules on submissions of electronic Covered Transaction Reports and Suspicious Transaction Reports.
COVERED TRANSACTION REPORTS
A covered transaction refers to: 1.) a transaction in cash or other equivalent monetary instrument exceeding P500,000; 2.) a transaction with or involving jewelry dealers, dealers in precious metals, and dealers in precious stones in cash or other equivalent monetary instrument exceeding P1 million; 3.) a cash transaction with or involving real estate developers or brokers exceeding P7.5 million or its equivalent in any other currency; and, 4.) a casino cash transaction exceeding P5 million or its equivalent in any other currency.
The covered persons shall ensure the completeness and accuracy of the Covered Transaction Report which shall be submitted in electronic form and filed through the AMLC’s File Transfer and Reporting Facility (FTRF) within five working days from the occurrence.
Covered persons, other than casinos and real estate brokers/developers, shall report to the AMLC all covered transactions regardless of the mode of transaction used in the settlement, including checks, fund transfers, and/or debiting or crediting of accounts, except those transactions that are deferred for reporting to the AMLC and covered under low-risk transactions. Casinos and real estate brokers/developers shall report covered cash transactions only.
SUSPICIOUS TRANSACTION REPORTS
Where a transaction is inconsistent in amount, origin, destination, or type with a customer’s known/legitimate business or activities, etc., the transaction should be considered unusual and the covered person should have internal controls in establishing whether this warrants the filing of a Suspicious Transaction Report.
Under GoTRACS, covered persons shall formulate a reporting chain under which a suspicious transaction or circumstance will be reviewed, processed, validated, and escalated.
The reporting chain shall refer to the procedures and processes to be undertaken by the covered person, beginning from the occurrence of the triggering event to the actual filing of the Suspicious Transaction Report or documentation of not filing one.
Covered persons shall establish a Money Laundering/Terrorism Financing Prevention Program which shall, among others: 1.) provide details of procedures and processes to be undertaken during the determination period, beginning from the determination of the triggering event to the actual filing of the Suspicious Transaction Report to the AMLC or documentation of not filing one; 2.) identify the responsible department/group/unit/personnel in performing specific procedures or processes in the reporting chain; 3.) clearly indicate the number of days or the period required to perform every procedure or process in the reporting chain to ensure the timely reporting of transactions; 4.) specify the controls and mechanisms to monitor the review, performance of due diligence, validation, and escalation procedures on suspicious transactions; and, 5.) formulate decision-making policy, including the designation of a Compliance Officer and/or review committee, who may also be authorized to decide with finality to file a Suspicious Transaction Report with the AMLC or otherwise to document the non-filing thereof. Covered persons should also ensure that proper controls are in place to guarantee confidentiality and that no “tipping-off” of customers will happen.
Covered persons shall ensure the completeness, accuracy, and timeliness of promptly filing Suspicious Transaction Reports, including attempts, in an electronic form through the AMLC’s FTRF within the next working day from occurrence. For purposes of the guidelines, “occurrence” refers to the establishment of suspicion or determination of the suspicious nature of the transaction.
Submissions beyond the prescribed periods provided in the GoTRACS shall be considered as non-compliant with submission requirements under the guidelines, in accordance with the standard set by the AMLA and may result in administrative sanctions.
The GoTRACS shall take effect immediately after publication while strict implementation for the different requirements and reports shall be implemented in phases as follows: 1.) May 1, 2025 — Chapter II, Part 1, Sections 1.18 and 1.19; 2.) One year from the effectivity date — Chapter 1 Provisions on: Low Risk Transactions, and Non-Working and Non-Reporting Days; and, 3.) Starting from one up to three years from the effectivity date: New Reporting Format and its Guidelines, and Uploading of KYC Documents and Beneficial Owner Excel Template for Suspicious Transaction Reports on Juridical Persons.
The issuance by AMLC of GoTRACS represents a significant step towards enhancing the integrity and efficiency of transaction reporting and compliance submissions. By establishing clear guidelines and standardized procedures, the AMLC aims to ensure that covered persons can effectively fulfill their reporting obligations, thereby strengthening the overall framework for combating money laundering and terrorism financing in the Philippines. The phased implementation of these guidelines will allow covered persons to adapt to the new requirements. This will ultimately contribute to a more robust and transparent financial system.
The views and opinions expressed in this article are those of the author. This article is for general informational and educational purposes only and not offered as and does not constitute legal advice or legal opinion.
Luke Morgan B. Codilla is an associate of the Angara Abello Concepcion Regala & Cruz Law Offices (ACCRALAW), Davao Branch.
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