AMLC Issued Rules and Regulations Implementing Section 9(d) of the Expanded ATIP of 2022

The Bangko Sentral ng Pilipinas (“BSP”) issued Circular Letter No. CL-2022-078 to disseminate the Anti-Money Laundering Council (“AMLC”) Regulatory Issuance No. 4, series of 2022 or the Rules and Regulations Implementing (“RRI”) Section 9(d) of Republic Act (“RA”) No. 9208, as amended by RA No. 11862 or the Expanded Anti-Trafficking in Persons Act of 2022 (“ATIP”).

The RRI focuses on two major items: (1) reporting of suspicious activities and transactions, and (2) bank inquiry and access to non-bank financial records. The reportorial requirements section covers (a) reporting of suspicious activities to law enforcement agencies, (b) reporting of suspicious transaction reports to the AMLC, and (c) suspicious circumstances and red flag indicators. On the other hand, the access to financial records covers bank inquiry and financial records not covered by the bank deposit secrecy laws.

1. Reporting of Suspicious Activities and Transactions
   
   Reporting to Law Enforcement Agencies (“LEA”)
   
   The following persons shall have the duty to report any suspected trafficking in persons (“TIP”)- related activity or transaction to the concerned LEAs: 
   
   
   1. Financial intermediary;
   2. Person working for a financial intermediary;
   3. Person related to a financial intermediary; or
   4. Person who has direct knowledge of any TIP-related financial activity or transaction conducted through a financial intermediary.

   To facilitate the reporting, the LEAs, through Inter-Agency Council Against Trafficking (“IACAT”), shall create a centralized reporting portal accessible to all concerned LEAs and financial intermediaries. It shall also have a mechanism to accept reports from any person working for, related to, or who has direct knowledge of any TIP-related financial activity or transaction conducted through a financial intermediary.  Pending the creation of the reporting portal, reports shall be filed manually or electronically to the LEA offices or e-mail addresses. 
   
   Reporting to the AMLC
   
   When reporting TIP-related Suspicious Transaction Report (“STR”) to the AMLC, covered persons shall follow the suspicious transaction reporting framework under the AMLA and the registration and reporting guidelines of the AMLC. STRs shall cover all transactions, whether completed or attempted. STRs shall be promptly filed within the next working day from occurrence thereof, which shall be the date of establishment of suspicion or determination of the suspicious nature of the transaction. Covered persons shall ensure the completeness, accuracy and timeliness of the STRs. STRs shall be filed in such form as may be prescribed by the AMLC and shall be submitted in a secured manner to the AMLC in electronic form. 
   
   The covered persons shall register with the AMLC’s electronic reporting system in accordance with the registration and reporting guidelines.
   
   All covered persons shall adopt a TIP monitoring system that is appropriate for their risk profile and business complexity. The system should be capable of generating timely, accurate and complete reports to lessen the likelihood of any reputational and compliance risks, and to regularly apprise the board of directors and senior management on compliance with the Expanded Act. Existing anti-money laundering/counter-terrorism financing monitoring system to monitor TIP-related risks and transactions, provided, that it is calibrated to specifically monitor TIP-related transactions and activities. 
   
   Complex covered persons shall adopt an electronic TIP system for monitoring risks as well as generating timely reports for the guidance and information of its board of directors and senior management. The system must have functionalities such as 1) STR monitoring; 2) watchlist monitoring; 3) investigation; 4) provides complete audit trail; 5) capable of aggregating activities of a customer with multiple accounts on a consolidated basis for monitoring and reporting purposes; and 5) capable of recording all suspicious transactions and support the investigation of alerts generated by the system and brough to the attention of senior management whether or not a report was filed with the AMLC. 
   
   Covered persons with an existing electronic system of flagging and monitoring transactions shall ensure that their existing system is updated. 
   
   Suspicious Circumstances 
   
   Any transaction, regardless of amount, where any of the following suspicious circumstances, is determined, based on suspicion or, if available, reasonable grounds, to be existing shall be reported to the AMLC:

   1. There is no underlying legal or trade obligation, purpose or economic justification;
   2. The client is not properly identified;
   3. The amount involved is not commensurate with the business or financial capacity of the client;
   4. Taking into account all known circumstances, it may be perceived that the client’s transaction is structured in order to avoid being the subject of reporting requirements under the AMLA;
   5. Any circumstances relating to the transaction which is observed to deviate from the profile of the client and/or the client’s past transactions with the covered person;
   6. The transaction is in any way related to ML/TF or TIP that is about to be committed, is being or has been committed; or
   7. Any transaction that is similar, analogous or identical to any of the foregoing, such as the relevant transactions in related and materially-linked accounts. 

   Red flag indicators
   
   Covered persons shall consider the red flag indicators in determining the existence of suspicious circumstances, which shall warrant the filing of the STRs before the AMLC. By using a combination of broad primary indicators, followed by specific secondary indicators, and combined with the institutional knowledge about AMLA regulations and issuances, covered persons shall identify reportable financial transactions and activities related to TIP and report it to AMLC. 
   
   The RRI provided several indicators such as Primary Financial Transaction Indicators (i.e., for possible victims of TIP and for probable perpetrators or offenders), Secondary Indicators, Other Transactional/Financial Red Flags and Other Customer Interaction/Behavioral Red Flags.

2. Bank Inquiry and Access to Other Financial Information
   
   Application for either the issuance of bank inquiry order, or an order allowing access to other financial information is initiated through a verified ex parte application filed before the competent Regional Trial Court (“RTC”). No prior criminal charge, pendency of a case, or conviction for any TIP-related offense is necessary for the issuance of bank inquiry order or order allowing access to other financial information. 
   
   A court order ex parte must be obtained before any LEA can inquire into the related accounts. The procedure for the ex parte application for issuance of bank inquiry order into the principal account shall be the same for that of the related accounts. 
   
   Any particular deposit or investment, including related accounts, with any banking institution or non-bank financial institution, may be inquired into or examined upon order of the competent RTC based on an ex parte application, when it has been established that there is reasonable ground to believe that the bank deposit or investment account, including related accounts involved, are related to TIP or other violations of the Expanded Act. 
   
   Similarly, financial intermediaries, internet payment system providers, and other financial facilitators may be required to provide financial documents and information not covered by bank deposit secrecy laws, upon order of the competent RTC, based on an ex parte application, when it has been established that there is reasonable ground to believe that the financial account, including related accounts involved, are related to TIP or other violations of the Expanded Act. 
   
   The Court of Appeals Rule of Procedure in Cases of Bank Inquiry into or Examination of Deposit or Investment Account Relating to an Unlawful Activity or Money Laundering Offense under RA No. 9160, as Amended (A.M. No. 21-03-05-CA) and other relevant provisions of the Rules of Court shall apply suppletorily to the proceedings for the ex parte issuance of bank inquiry order or order allowing access to financial information not covered by bank secrecy laws under the Expanded Act until the Supreme Court promulgates the specific rule that would apply thereto.
   
   Covered persons shall have the following duties in relation to bank inquiry orders:
   1. Immediately, upon receipt of the bank inquiry order, give the concerned LEA full access to all information, documents or objects pertaining to the deposit, investment, account and/or transaction.
   2. Submit to the concerned LEA within five (5) working days from receipt of the bank inquiry order the certified true copies of the documents pertaining to deposit, investment, account and/or transaction subject of the bank inquiry. Extension of the period for compliance may be allowed upon good causes, provided, that a request to concerned LEA is submitted before the expiration of the original five (5) working days. 
   3. Keep the confidentiality of the inquiry and ensure that the owner of any monetary instrument or property or other unauthorized personnel shall not be informed about the inquiry to prevent tipping-off.