AntiMoney Laundering Act of 2020 (RA 11521)

The AntiMoney Laundering Act of 2020, officially Republic Act No. 11521, is the Philippines most recent comprehensive legislation aimed at preventing the use of the financial system for illicit purposes. It updates the earlier AMLA of 2001 to align the country with the latest international standards set by the Financial Action Task Force (FATF) and to address emerging risks such as terrorist financing, cybercrimes, and the use of virtual assets.

Key Objectives

• Detect and deter money laundering, terrorist financing, and other predicate offenses.
• Strengthen compliance among covered persons and institutions.
• Enhance cooperation among lawenforcement agencies, the AntiMoney Laundering Council (AMLC), and the private sector.
• Facilitate asset recovery and the confiscation of proceeds from illicit activities.

Scope of Covered Persons

The Act expands the list of covered entities to include:

• Banking institutions, nonbank financial institutions, and insurers.
• Moneychange and remittance companies.
• Securities brokers, dealers, and exchanges.
• Realestate agents, dealers in precious metals and stones, and gaming operators.
• Auditors, accountants, lawyers, and other professionals providing services to highrisk clients.
• Virtual asset service providers (VASPs) a new category covering cryptocurrency exchanges, wallet providers, and similar platforms.

Core Compliance Requirements

Customer Due Diligence (CDD)

All covered persons must verify the identity of their customers, understand the nature of the business relationship, and monitor transactions for suspicious patterns. The AMLA defines three levels:

1. Standard CDD applicable to most customers.
2. Enhanced CDD (ECDD) required for politically exposed persons (PEPs), highrisk jurisdictions, or complex transactions.
3. Simplified CDD (SCDD) allowed for lowrisk customers where the risk of money laundering is negligible.

RecordKeeping

Records of client identification, transaction details, and internal reports must be retained for at least five years and be readily accessible for AMLC inspection.

Reporting Obligations

• Covered Transaction Report (CTR) for cash transactions of 500,000 or more in a single day.
• Suspicious Transaction Report (STR) for any transaction that appears suspicious, regardless of amount.
• Currency Transaction Report (CTR) for foreign currency exchanges exceeding the threshold.

Risk Assessment

Institutions must conduct a periodic risk assessment covering products, services, customers, and geographic locations. The results guide the allocation of resources and the intensity of monitoring activities.

Regulatory and Enforcement Bodies

The primary authority is the AntiMoney Laundering Council (AMLC), which is responsible for:

• Receiving and analyzing CTRs, STRs, and other reports.
• Conducting investigations and freezing assets.
• Issuing regulations, guidelines, and penalties.
• Coordinating with international bodies and other Philippine agencies such as the NBI, PNP, and Bureau of Internal Revenue.

Penalties

Violations can result in both criminal and administrative sanctions, including:

Recent Amendments and Highlights

• Inclusion of Virtual Assets VASPs are now subject to the same CDD and reporting obligations as traditional financial institutions.
• Beneficial Ownership Registry Companies must disclose ultimate owners to the SEC, facilitating transparency.
• CrossBorder Cooperation Strengthened mutual legal assistance with foreign AML/CTF authorities.
• Expanded AMLC Powers The Council can now impose interim asset freezes without a court order if there is a reasonable belief that assets are linked to illicit activity.

Impact on Businesses

Enterprises must adjust internal policies, invest in compliance technology, and train staff regularly. Failure to adapt can lead to costly fines, reputational damage, and even loss of operating licenses.

Getting Started

1. Conduct a gap analysis to identify where current practices fall short of AMLA 2020 requirements.
2. Develop or update a written AML program that includes CDD, monitoring, reporting, and risk assessment procedures.
3. Appoint a dedicated Compliance Officer and, where appropriate, an AML compliance team.
4. Implement transaction monitoring software capable of flagging suspicious patterns, especially for VASP activities.
5. Provide ongoing training for all relevant staff, emphasizing redflag indicators and reporting protocols.

Useful Resources

• AntiMoney Laundering Council (AMLC) Official Website
• Securities and Exchange Commission Beneficial Ownership Guidance
• Financial Action Task Force Recommendations
• Bangko Sentral ng Pilipinas AML Circulars

By complying with the AntiMoney Laundering Act of 2020, Philippine businesses not only avoid legal sanctions but also contribute to a more transparent and secure financial system, fostering trust among investors, partners, and the broader community.