Banks told to immediately implement freeze orders

MANILA, Philippines — The Anti-Money Laundering Council (AMLC) has directed banks as well as other covered persons and entities to immediately implement freeze orders issued by the Court of Appeals (CA) as the Philippines steps up efforts to fight money laundering and financing of terrorism.

In an advisory, Mel Georgie Racela, executive director at the AMLC Secretariat, said that periods for filing of returns on freeze orders should be strictly observed.

“It has been observed that some covered persons submit returns on the implementation of freeze orders, concerning related accounts, only a few days before the expiration of the six-month freeze order issued by the Court of Appeals against the main accounts,” Racela said.

Aside from banks, covered persons or institutions are offshore banking units, quasi banks, trust entities, non-stock savings and loan associations, pawnshops, foreign exchange dealers, money changers, money remittance or transfer companies, electronic money issuers, jewelry dealers, securities dealers, brokers, investment houses, mutual fund companies, insurance companies and pre-need companies.

 He said several covered persons or institutions have started to implement the freeze orders a few days or weeks before the expiry of the period prescribed by the appellate court.

The AMLC official said the 20-day effectivity of the freeze orders should be reckoned from the time the accounts are actually frozen as indicated in the return and which must be submitted within 24 hours from the freezing of the related accounts.

Racela said the late implementation of freeze orders and filing of returns within the prescribed period may constitute a money laundering offense under Republic Act 9160 or the Anti-Money Laundering Act of 2001 (AMLA).

Violators, he said, face an imprisonment of four to seven years and a fine of not less than P1.5 million.

He said violators face stiffer punishment with reclusion temporal in its maximum period to reclusion perpetua and a fine of at least P500,000 to a maximum of P1 million if the subject accounts were frozen under RA 10168 or the Terrorism Financing Prevention and Suppression Act of 2012 or RA 11479 or the Anti-Terrorism Act of 2020.

Furthermore, the late implementation of freeze orders or submission of returns is considered as administrative offenses or violations under the AMLA and its implementing rules and regulations.

Non-compliance with the requirement to immediately freeze subject accounts upon receipt of the notice of the freeze order, provisional assets preservation order and asset preservation order is considered a grave violation which can result in a fine of P25,000 to P500,000 per violation.

On the other hand, less serious violations merit a fine of P5,000 to P100,000 per violation involving a non-compliance with a requirement to submit to the AMLC within 24 hours from the receipt of the freeze order a detailed written return on the subject accounts.

Likewise, a non-compliance with a requirement to submit a complete information on the detailed return on the freeze order is considered a light violation which merit a fine of P2,500 to P50,000 per violation.

AMLC chairman and Bangko Sentral ng Pilipinas Governor Benjamin Diokno is confident the Philippines would be removed from the gray list, or jurisdictions under increased Financial Action Task Force (FATF) monitoring for anti-money laundering, on or before January 2023.

The Philippines was placed anew on the gray list of the Paris-based FATF on June 25 after the country failed to address strategic deficiencies in its money laundering as well as terrorist and proliferation financing regimes.