2022

Please review
BSP Circular 1022
and
MTPP Manual.
Learning Objectives
I. Introduction
II. Customer Due Diligence
• Customer Identification Process
• Customer Verification Process
• Beneficial Ownership Verification
• Client Risk Assessment
III. Ongoing Monitoring
IV. Regulatory Compliance
• Covered Transaction Reports
• Suspicious Transaction Reports
• Freeze Orders
• Asset Preservation Order
• AMLC Requests
• Record Keeping and Retention
• Training
V. Typologies, Red Flags and Case Studies
VI. Reference Materials
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Learning Objectives Summary
Ascertain the objectives and principal elements of a ‘Know
Your Customer’ policy
Manage the risk of customers by applying Customer Due
Diligence and Risk Assessment

Learn the red flags, and be able to detect and report

suspicious activities

Apply AML/CFT laws, regulations, policies and procedures

in day-to-day activities

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 Regulators Bank Committees
The Bangko Sentral ng Pilipinas (BSP) is the Tasked to assist the Board of Directors in
Board Level fulfilling its oversight responsibility over the
central bank of the Republic of the Philippines. The Anti-Money Laundering
BSP is the supervisor for banks and non-bank Bank’s AML Compliance Management to make
Committee (AMLACOM) sure that the Bank complies with the provisions
financial institutions (NBFIs.
of the AMLA, as amended, its RIRR and
BSP/AMLC regulations.

Anti-Money Laundering Council refers to the

financial intelligence unit of the Republic of the
Senior Mgt. Level Tasked to assist Senior Management in
Philippines which is the government agency tasked
Anti-Money Laundering reviewing and monitoring the Bank’s
to implement the AMLA.
Compliance Committee continuing compliance with the provisions of
(AMLCC) the AMLA, as amended, its RIRR and
BSP/AMLC regulations.

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 Board Level Committee Senior Management Level Committee
Anti-Money Laundering Committee Anti-Money Laundering Compliance Committee
(AMLACOM) (AMLCC)

President
Director Chair
Chairman

Head, F&C Sector

Head, AMLD- Vice Chair
MD
Secretary

Head, IAG Head, IAG-BAD II Head, AMLD

Resource Person Resource Person Secretary
Independent Independent
Chairman
Director Director
Member
Member Member
Head, CBG Head, CEG Head, CEG-BBO Head, BBS-MMR Head, CD Head, LSD
Member Member Member Member Member Member
 Board of Directors
Sets risk strategy & appetite
Approves AML Program and
oversees governance

Senior Management
Oversees implementation of
AML Program and fosters a
compliance culture
Ensures sufficient resources
including technology and
personnel
 ACRONYMS

AML ML CFT TF MSB

Anti-Money Laundering Money Laundering Counter Financing of Terrorist Financing Money Service Business
Terrorism

AMLC AMLA CDD EDD DNFBP

Anti-Money Laundering Anti-Money Laundering Customer Due Diligence Enhanced Due Diligence Designated Non-Financial
Council Act Businesses and Professions

BSP KYC CRA CIP BO

Banko Sentral ng Know Your Customer Customer Risk Customer Identification Beneficial Owner
Pilipinas Assessment Process

CIF STR CTR FO UBO

Customer Information Suspicious Transaction Covered Transaction Freeze Order Ultimate Beneficial
Form Report Report Owner

PAPO APO TFS PF MI

Provisional Asset Asset Preservation Targeted Financial Proliferation Financing Monetary Instrument
Preservation Order Order Sanctions
Money Laundering

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Money Laundering
Money Laundering is a crime whereby the proceeds of unlawful activity are
transacted, thereby making them appear to have originated from legitimate
sources.

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 Money Laundering
Who?
Any person, knowing that any Monetary Instrument (MI) or Property (P) represents, involves, or
relates to the proceeds of any unlawful activity.

How?
1. Transacts MI or Property.
2. Converts, transfers, disposes of, moves, acquires, possesses or uses MI or P.
3. Conceals or disguises the true nature, source, location, disposition, movement or
ownership or rights with respect to the MI/P.
4. Attempts or conspires to commit money laundering offense referred to in items 1, 2 or 3
above.
5. Aids, abets, assists in or counsels the commission of the money laundering offenses
referred to in items 1, 2 or 3 above.
6. Performs or fails to perform any act as a result of which he facilitates the offense of money
laundering referred to in items 1, 2 or 3 above.

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 Money Laundering
Who?

Covered Person

How?

Knowing that a covered or suspicious transaction is required to be

reported to the AMLC, fails to do so.

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Unlawful activity
RA no. 10365 as Amended-36 Unlawful Activities under
AMLA
is the offense which
generates dirty money or
22. Violations of Philippine Mining Act
1. Kidnapping for ransom 23. Violations of Wildlife Resources Conservation and
Protection Act
property. It is commonly
2. Comprehensive Dangerous Drugs Act
3. Anti-Graft and Corrupt Practices Act 24. Violation of National Caves and Cave Resources
Management Protection Act
called the predicate
4. Plunder
25. Violation of Anti-Carnapping Act
5. Robbery and extortion
26. Violations of Codifying the Laws on Illegal
crime.
6. Jueteng and Masiao Unlawful Possession, Manufacture, Dealing In,
7. Piracy on the high seas Acquisition or Disposition of Firearms,
8. Qualified theft Ammunition or Explosives
9. Swindling 27. Violation of Anti-Fencing Law
10. Smuggling 28. Violation of Migrant Workers and Overseas
11. Violations of Electronic Commerce Act Filipinos Act
12. Hijacking and other violations (destructive arson 29. Violation of Intellectual Property Code of the
and murder) Philippines
13. Terrorism and conspiracy to commit terrorism 30. Violation of Anti-Photo and Video Voyeurism Act
14. Financing of terrorism 31. Violation of Anti-Child Pornography Act
15. Bribery and Corruption of Public Officers 32. Violations of Special Protection of Children
16. Frauds and illegal Exactions and Transactions Against Abuse, Exploitation and Discrimination
17. Malversation of Public Funds and Property 33. Fraudulent practices and other violations of
Securities Regulation Code
18. Forgeries and Counterfeiting 19. Violations of Anti-
34. Violation of “The Strategic Trade Management Act”,
Trafficking in Persons Act
in relation to Proliferation of WMD and PF
20. Violations of Revised Forestry Code of the 35. Tax Evasion
Philippines 36. Felonies and offenses of similar nature under the
21. Violations of Philippine Fisheries Code penal laws of other countries.

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Stages of Money Laundering

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 Stages of Money Laundering
Physical disposal of cash or other assets derived from criminal
1 Placement activity.
Introduction of the illegal proceeds into the financial system.
Separation of illicit proceeds from their source by layers of
2 Layering financial transactions intended to conceal the origin of the
proceeds.
Converting the proceeds of the crime into another form and
creating complex layers of financial transactions to disguise the
trail, source and ownership of funds.
Re-entry of laundered funds into the economy in what appears
3 Integration to be normal business or personal transactions.
Using the laundered proceeds in seemingly normal transactions
to create air of legitimacy.

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 Common Methods of Money Laundering

STRUCTURING
Illegal act of splitting cash deposits or withdrawals into smaller
amounts to stay under a currency reporting threshold.
Designing a transaction to evade triggering a reporting or
recordkeeping requirement.

SMURFING
Use of multiple individuals and/or multiple transactions for
making cash deposits, buying monetary instruments or bank
drafts in amounts under the reporting threshold.

The individuals hired to conduct the transactions are referred to

as smurfs.
Terrorist Financing

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Terrorist Financing
Terrorist Financing is committed by
any person who directly or indirectly,
willfully and without lawful excuse
carry out or facilitate the
commission of any terrorist act.
 Terrorist Financing
Who commits and How it is committed?

A person who, directly or indirectly, willfully and without lawful excuse

• possesses, provides, collects or uses property or funds
• makes available property, funds or financial service
• other related services, by any means, with the unlawful and willful intention
that they should be used or with the knowledge that they are to be used, in
full or in part:
(1) to carry out or facilitate the commission of any terrorist act
(2) by a terrorist organization, association or group; or
(3) by an individual terrorist.

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 Proliferation Financing
Who commits and How it is committed?

When a person:
1. Makes available an asset
2. Provides a financial service
3. Conducts a financial transaction

and the person knows that, or is reckless as to whether, the asset, financial service or financial
transaction is intended to, in whole or in part, facilitate proliferation of Weapons of Mass
Destruction in relation to UNSC Resolution Nos. 1718 of 2006 (DPRK – North Korea) and 2231 of
2015 (Iran).
 Differences and Similarities between
Money Laundering & Terrorist Financing
Money Laundering Terrorist Financing
Origin of funds Unlawful activities Unlawful activities and legitimate
sources
Use of funds To gain wealth and assets To execute terrorist activities
Objective To avoid detection To support terrorist activities
Motivation Profit-seeking Ideological
Intention To clean ill-gotten gains or dirty To intimidate a population or to
money so that they appear to be compel government or an
proceeds from legal activities international organization to do or
abstain from doing any specific act
through the threat of violence
 Money Laundering vs Terrorist Financing
COMPARISON MONEY LAUNDERING TERRORIST FINANCING
Methods • Placement The same as or similar to those methods used by
• Layering other criminals that launder funds.
• Integration
Life cycle Circular life cycle Linear life cycle

Funding
Funding
Placement
Placement Integration
Layering
Layering Integration

Terrorist Activity
Q&A