Comprehensive AML Laws and Regulations: Philippines

The Philippines has established a comprehensive framework to combat money laundering (ML) and terrorist financing (TF), aligning with international standards. These regulations span various sectors, including banking, insurance, asset management, wealth management, payment processors, fintech, lending, and crypto, ensuring the integrity of the financial system and compliance with global AML/CFT standards.

Key Laws and Guidelines

• Anti-Money Laundering Act (AMLA) of 2001: The Anti-Money Laundering Act (AMLA) of 2001 serves as the cornerstone of the Philippines' efforts to prevent money laundering activities. The act mandates financial institutions, including banks, non-bank financial institutions, and insurance companies, to verify the identity of their clients, maintain accurate records, and report suspicious and large transactions exceeding PHP 500,000 within a single banking day. The AMLA established the Anti-Money Laundering Council (AMLC) as the primary government agency to implement the act, conduct investigations, and enforce regulations. Over time, amendments to AMLA have expanded the list of predicate offenses to include tax evasion, human trafficking, and environmental crimes, ensuring a robust legal framework to combat financial crimes.
• Terrorism Financing Prevention and Suppression Act of 2012:  Introduced to criminalize and prevent the financing of terrorism, the Terrorism Financing Prevention and Suppression Act of 2012 defines and criminalizes various acts related to the financing of terrorism. It mandates financial institutions to report transactions suspected to be related to terrorism financing to the AMLC, thereby strengthening the country's defenses against the financial underpinnings of terrorism
• Anti-Terrorism Act of 2020: The Anti-Terrorism Act of 2020 enhances measures against terrorism and its financing by broadening the definition of terrorist activities and related offenses. This act provides law enforcement agencies with additional powers to combat terrorism and its financing, reflecting the Philippines' commitment to addressing evolving security threats comprehensively.
• BSP Circulars and Guidelines: The Bangko Sentral ng Pilipinas (BSP) has issued several circulars to provide specific guidelines for various sectors. BSP Circular No. 944 outlines requirements for virtual asset service providers (VASPs), including registration, customer identification, and reporting of suspicious transactions. Similarly, BSP Circular No. 1022 provides guidelines for the real estate sector, requiring professionals to implement AML measures, conduct due diligence, and report suspicious transactions, thereby extending AML regulations to cover emerging financial technologies and traditional sectors alike.

Regulatory Bodies

• Anti-Money Laundering Council (AMLC): The AMLC is the primary enforcement body for AML/CFT laws in the Philippines. It formulates and implements AML policies, conducts investigations into suspicious transactions, and initiates prosecutions. The AMLC also coordinates with other Regulatory Bodies and law enforcement agencies to ensure a comprehensive approach to combating money laundering and terrorist financing.
• Bangko Sentral ng Pilipinas (BSP): BSP is the central bank responsible for the supervision of banks and financial institutions. BSP ensures that banks and financial institutions comply with AML/CFT regulations by issuing detailed guidelines and conducting regular compliance checks.

• Securities and Exchange Commission (SEC): The SEC regulates the securities market and non-bank financial institutions. It oversees compliance with AML regulations within the securities sector and issues guidelines to ensure that firms implement effective AML measures.
• Insurance Commission (IC): The IC supervises the insurance sector, ensuring that companies implement effective AML/CFT measures, including customer due diligence and transaction monitoring.
• Philippine Amusement and Gaming Corporation (PAGCOR): PAGCOR regulates the gaming and casino industry, ensuring that gaming establishments comply with AML/CFT laws.
• Cagayan Economic Zone Authority (CEZA): CEZA oversees offshore gaming and financial technology companies within the Cagayan Special Economic Zone, implementing AML/CFT measures in these sectors.
• Real Estate Service Board (RESB): The RESB regulates the real estate sector, ensuring professionals adhere to AML requirements.

History of Regulations

• 2001: Enactment of the Anti-Money Laundering Act (AMLA).
• 2003: First set of Implementing Rules and Regulations (IRR) for AMLA issued.
• 2012: Introduction of the Terrorism Financing Prevention and Suppression Act.
• 2017: Amendments to AMLA expanded the list of predicate offenses, including tax evasion and human trafficking.
• 2020: Passage of the Anti-Terrorism Act, enhancing measures against terrorism and its financing.
• 2021: BSP issued Circulars No. 944 and 1022, addressing AML/CFT requirements for virtual assets, real estate, and other sectors.

Sector-specific Regulations

• Banking and Financial Institutions: Regulated by the Bangko Sentral ng Pilipinas (BSP), the banking and financial institutions sector is required to implement robust AML/CFT programs, strict KYC protocols, and continuous monitoring of transactions to detect suspicious activities. Banks and financial institutions must also report suspicious transactions and maintain records for a minimum of five years.
• Insurance: The insurance sector, overseen by the Insurance Commission (IC), mandates companies to implement effective AML measures, including customer due diligence and transaction monitoring. Insurance companies must verify the identities of their clients and report suspicious activities to the AMLC.
• Asset Management and Wealth Management: Regulated by the Securities and Exchange Commission (SEC), asset management and wealth management firms must adhere to stringent AML regulations. These firms are required to implement robust AML programs, conduct thorough customer due diligence, and monitor transactions for suspicious activities. They must also report any suspicious transactions and maintain detailed records of all transactions and customer information.
• Payment Processors and Fintech: Payment processors and fintech companies are subject to BSP regulations, including BSP Circular No. 944 for virtual asset service providers (VASPs). These entities must implement comprehensive AML measures, including registration, customer verification, and real-time transaction monitoring. They are also required to report suspicious transactions to the AMLC.
• Lending: Lending institutions, both traditional and fintech-based, must adhere to AML regulations set by the BSP. These institutions are required to conduct customer due diligence, monitor transactions for suspicious activities, and report any suspicious transactions to the AMLC. They must also maintain records of all transactions and customer information.

Crypto: The crypto sector, regulated under BSP Circular No. 944, requires virtual asset service providers (VASPs) to register with the BSP, conduct customer due diligence, and monitor transactions for suspicious activities. VASPs must also report any suspicious transactions and maintain detailed records of all transactions.