Lacson bill adds casinos, real estate brokers, art and vehicle dealers to Anti-Money Laundering Act coverage

To better equip Philippine authorities to fight money laundering, Sen. Panfilo M. Lacson has filed a bill expanding the coverage of the Anti-Money Laundering Act (AMLA) to include Designated Non-Financial Businesses and Professions (DNFBPs) such as casinos, real estate brokers, and dealers of art works and motor vehicles.

Lacson, in Senate Bill 45, said the Financial Action Task Force has noted how money launderers now use such businesses and professions to cover their illegal transactions, with the casino industry seemingly attractive for those undertaking money-laundering activities.

“While the contributions of the (casino) industry are acknowledged, it is also understood that casinos are equally exposed to the raging threats of money laundering,” Lacson said in explaining the inclusion of casinos in the AMLA’s scope. 

[Download: Senate Bill 45, (Amending the) Anti-Money Laundering Act of 2001]

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He added the Bank of Bangladesh cyber-heist in February 2016 exposed the AMLA’s vulnerabilities in curtailing money laundering schemes in the Philippines, as a sum of the laundered money was moved to the casino industry through junket operators.

Under Lacson’s bill, the AMLC will be strengthened with:

– inclusion of casinos, real estate brokers, art dealers, and motor vehicle dealers as covered persons

– changing the nomenclature for the covered person, “jewelry dealers” in precious metals and stones to “dealers” in precious metals and stones, and including “jewelry dealers” as a separate covered person;

– designating the Bangko Sentral ng Pilipinas as the supervising authority of foreign exchange dealers, money changers, remittance and money transfer businesses, for purposes of the AMLA

The bill also adds to the list of unlawful activities covered by AMLA, including:

– violations of firearms and ammunitions regulation act

– cybercrime

– violations of Strategic Trade Management Act regarding weapons of mass destruction

– tax evasion

The bill likewise authorizes the AMLC, instead of the Court of Appeals, to issue ex parte freeze order with respect to some unlawful activities. The AMLC can also check compliance with the AMLA by covered persons not under any supervising authority.

Also, the AMLC is authorized to issue subpoena and administer oath in aid of its investigation and compliance checking functions.

On the other hand, the bill updates the requirement on customer identification to include all aspects of customer due diligence.

It also authorizes covered persons to temporarily withhold transaction and/or withhold subsequent transactions for up to two banking days, to allow them to verify if a transaction is suspicious, and terminate if they find reasonable belief that there is possible violation of the AMLA.

Covered transactions

Covered transactions involve amounts in excess of P500,000 in one banking day. For casinos, it may include single or aggregate transactions exceeding P150,000 in one gaming day.

For dealers of precious metals and stones, the covered transactions include those exceeding P1 million. For real estate brokers, covered are single transactions exceeding P3 million.

But lawyers and accountants acting as independent legal professionals “are not required to report covered and suspicious transactions if the relevant information was obtained in circumstances where they are subject to professional secrecy or legal professional privilege,” the bill said.

If a transaction is determined to be both a covered and suspicious transaction, the covered institution shall be required to report the same as a suspicious transaction.

Penalties and sanctions

One who maliciously reports or files false information on a money laundering transaction faces a jail term of six months to four years, and a fine of P100,000 to P500,000.

The AMLC may impose sanctions such as monetary penalties, warning or reprimand, upon any covered entity, its directors, officers, employees or any other person for the violation of the AMLA. Penalties may be up to P1 million per violation, or 20 percent of the value of the monetary instrument or property laundered or sought to be laundered, whichever is higher.

Political and economic harassment

To prevent the AMLA from being used for political and economic harassment, Lacson’s bill specified that no case for money laundering may be filed against and no assets shall be frozen, attached or forfeited to the prejudice of a candidate during an election period.

Prohibited transactions for casinos

The bill prohibits casino operators from:

– receipt of cash for transmittal through wire or telegraphic transfer for or on behalf of a customer

– payments in cash of funds received through wire or telegraphic transfer

– cashing of checks or other negotiable instruments

– receiving money, the purpose of ownership of which cannot be ascertained within a period of seven days, unless the AMLC prescribes a different period, from the date of the receipt

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