The revision of the AMLA was just in time for the Plenary session of the international group Financial Action Task Force (FATF) on money laundering.
Because of this new law and other changes implemented by the country, the Philippines has avoided being blacklisted, which, according to The Philippine Star, “could have meant higher financial transaction costs and stringent cross-border measures for money transactions that could affect remittances.”
What is money laundering?
“minsan ko nang naranasan ang money laundering. naiwan ko ung pera ko sa bulsa ko, tapos nalabhan sa washing washing” – @superstarmarian
No, you are not guilty of money laundering when you forget to remove your money from your pockets before washing your clothes.
Money laundering is defined in the AMLA as follows:
“Money laundering is committed by any person who, knowing that any monetary instrument or property represents, involves, or relates to the proceeds of any unlawful activity:
(a) transacts said monetary instrument or property;
(b) converts, transfers, disposes of, moves, acquires, possesses or uses said monetary instrument or property;
(c) conceals or disguises the true nature, source, location, disposition, movement or ownership of or rights with respect to said monetary instrument or property;
(d) attempts or conspires to commit money laundering offenses referred to in paragraphs (a), (b) or (c);
(e) aids, abets, assists in or counsels the commission of the money laundering offenses referred to in paragraphs (a), (b) or (c) above; and
(f) performs or fails to perform any act as a result of which he facilitates the offense of money laundering referred to in paragraphs (a), (b) or (c) above.
Money laundering is also committed by any covered person who, knowing that a covered or suspicious transaction is required under this Act to be reported to the Anti-Money Laundering Council (AMLC), fails to do so.”
Basically, money laundering occurs when money that comes from illegal activities are “laundered” or “made clean” when they are converted or transferred to legal accounts and properties. Because of money laundering, criminals are able to enjoy the fruits of their illegal activities without exposing or jeopardizing their source.
If you want to know more about money laundering, you can find a good discussion here.
How does this law affect real estate?
In the past, the focus of the AMLA was bank accounts. Cash is really liquid and may really be moved around quickly and in many different accounts until it is difficult to trace the source. Many Filipinos were made aware of this possibility during the televised impeachment trial of former Chief Justice Renato Corona.
Now, there is a specific mention of property. Based on my understanding, before, the freezing of assets refers to accounts only. Well, this is understandable as it is really possible for real estate to be used as a vehicle for money laundering.
Furthermore, the Anti-Money Laundering Council (AMLC) now has an added function to require the “Land Registration Authority (LRA) and all its Registries of Deeds to submit to the AMLC, reports on all real estate transactions involving an amount in excess of Five hundred thousand pesos (P500,000.00) within fifteen (15) days from the date of registration of the transaction, in a form to be prescribed by the AMLC. The AMLC may also require the Land Registration Authority and all its Registries of Deeds to submit copies of relevant documents of all real estate transactions.”
Previously, there was a move for real estate brokers to be the ones to report the above transactions. This was not approved in the final version.
Another major issue with the law is that it does not include casino operations. Casinos and gaming are related to the real estate industry and are expected to give a major boost to the country’s tourism efforts. However, casinos are indeed avenues for money laundering so the FATF is justified in pushing for their inclusion in the next amendment of the AMLA.
What are the other salient features of the law?
Money that is laundered should have come from an “unlawful activity” (which some call “predicate crimes”). The definition of “unlawful activity” has been expanded to 34 from 14 previously. The definition of “covered persons” have been expanded as well.
With regard to the freezing of assets, Section 10 of the law has been amended – the freeze order should now be issued by the Court of Appeals instead of the AMLC.
The details of the law are very technical and may be interesting only to a few. Let me know your thoughts so we can discuss.
Cherry Vi M. Saldua-Castillo
Real Estate Broker, Lawyer, and CPA
PRC Real Estate Broker License No. 3187
PRC CPA License No. 0102054
Roll of Attorneys No. 55239
Text by Jay Castillo and Cherry Castillo. Copyright © 2008 – 2013 All rights reserved.
Full disclosure: Nothing to disclose.