SPECIAL LAWS FOR RFBT

Bouncing Checks Law (Batas Pambansa Blg. 22)

WHAT ARE THE ELEMENTS OF THE CRIME PUNISHED UNDER THE BOUNCING CHECKS LAW?

The issuance of a check for value;

The knowledge of the issuer that at the time of issue he does not have sufficient funds in or credit with the
drawee bank for the payment of the check in full upon its presentment; and
The subsequent dishonor of the check by the drawee bank due to insufficiency of funds

Penalty for violation:

Imprisonment of not less than 30 days but not more than 1 year, or;
By a fine of not less than double the amount of the check/s, but in n case to exceed P200,000, or
Both fine and imprisonment at the discretion of the court.

The same penalty shall be imposed upon any person who, having sufficient funds in or credit with the drawee
bank when he makes or draws and issues a check, shall fail to keep sufficient funds or to maintain a credit to
cover the full amount of the check if presented within a period of ninety (90) days from the date appearing
thereon, for which reason it is dishonored by the drawee bank.

Who are liable?

The drawer of the check

If the check is drawn by a corporation, company or entity, the person/s who actually signed the check in behalf of
the drawer-corporation
The accommodation party is liable even though the holder of the check knew him to be an accommodation part

Duty of the drawee-bank:

It shall be the duty of the drawee of any check, when refusing to pay the same to the holder thereof upon
presentment, to cause to be written, printed, or stamped in plain language thereon, or attached thereto, the reason
for drawee's dishonor or refusal to pay the same: Provided, That where there are no sufficient funds in or credit
with such drawee bank, such fact shall always be explicitly stated in the notice of dishonor or refusal

Not with standing receipt of an order to stop payment, the drawee shall state in the notice that there were no
sufficient funds in or credit with such bank for the payment in full of such check, if such be the fact.

Important notes:

In case the accused is acquitted and the reason for the acquittal is insufficiency of evidence,
the accused may still be held civilly liable and ordered to pay the value of the bounced check.
This is because the civil liability of the accused is not automatically extinguished upon
dismissal of the criminal case on ground of failure to establish guilt beyond reasonable doubt.

It must also be noted that a person liable for BP 22 may at the same time be liable for estafa
under Article 315 (2-d) of the Revised Penal Code. The essential elements of the latter are:
(a) a check is postdated or issued in payment of an obligation contracted at the time the
check is issued; (b) lack or insufficiency of funds to cover the check; and (c) damage to the
payee thereof. It is the deceit or fraud attendant to the issuance of the check which is
punished. Prima facie evidence of deceit exists by law upon proof that the drawer of the
 check failed to deposit the amount necessary to cover his check within three days from
receipt of the notice of dishonor. The key issue is whether the complainant would have
parted with his money, property or any other object of the transaction were it not for the
issuance of the check, which turns out to be unfunded.

Securities Regulations Code (Republic Act No. 8799

The Securities Regulation Code of the Philippines or Republic Act No. 8799 is a landmark legislation that aims
to regulate the issuance and trading of equity securities and debt securities in the Philippines.

Enacted on July 19, 2000 and amended in 2015, this code is focused on creating a fairer and self-regulating
free market. The Securities Regulation Code, which is currently divided into 78 sections and classified into 13 chapters,
also ensures the protection of investors and the Philippine securities market system.

What is a security?

Securities are shares or interests that raise more capital for profit-making businesses. These securities
typically come in the form of the following:
shares of stocks, bonds, debentures
investment contracts
options and warrants
certificates (assignment, participation, trust, etc.)
proprietary and non-proprietary membership certificates

There are several actors that engage in the issuance and trading of securities. For instance, issuers create the
securities. They are composed of corporations, domestic governments, foreign governments, and investment trusts.
Brokers are agents who buy and sell securities for others, while dealers buy and sell securities for themselves.

For securities to be legitimate, they must indicate that they are securities with a written or electronic
certificate or contract. Without proper registration, securities are not allowed to be sold or distributed in the
Philippines.

Objectives of the Securities Regulation Code of the Philippines

The primary aims of the Securities Regulation Code, stated in Section 2, are as follows:

To establish a socially aware and self-regulating free market;

To encourage more participation in owning an enterprise;
To enhance the democratization of wealth;
To promote the capital market’s development;
To protect investors;
To ensure full and fair disclosure of securities and;
To minimize or eliminate fraudulent activities such as insider trading in the free market.

Requirements and procedures to register securities

To register a security or securities, it must first be filed and approved by the Securities and Exchange
Commission (SEC). A record will then be kept in the Register Securities. The documentary requirements for the
registration of securities are:

3 copies of SEC Form 12-1

 Duly signed and notarized statement of management responsibilities on the audited financial
statements
Consolidated/Audited/Interim Financial Statements (if applicable)
Additional components of the Audited Financial Statements
Material Contracts
Exhibits
Payment Assessment Form (PAF)

For foreign registrants, the registration statement must be signed by its resident agent in the Philippines,
along with your principal executive officer, principal operating officer, principal financial officer, controller, principal
accounting officer, and corporate secretary.

Exempted securities

The following securities are exempt from an SEC registration:

Securities issued by the Philippine government

Securities issued by the government of a country that has diplomatic relations with the Philippines
Certificates issued by a trustee in bankruptcy
Securities under the Office of the Insurance Commission, Housing and Land Rule Use Regulatory
Board, and the Bureau of Internal Revenue
Securities issued by a bank that are not its own shares of stock

Code of Corporate Governance

When did the Code took effect?

Pursuant to SEC Memorandum Circular 19, the code took effect on January 1, 2016. All publicly listed
companies are required to submit a new manual on corporate governance to the SEC on or before May 31, 2017.

What is the purpose of the Code?

The Code of Corporate Governance is intended to raise the corporate governance standards of Philippine
corporations to a level on a par with its regional and global counterparts. The latest G-20/Organisation for
Economic Co-operation and Development Principles of Corporate Governance and the Asean Corporate Governance
Scorecard were used as key reference materials in the drafting of the code.

What is corporate governance?

The code defines “corporate governance” as “the system of stewardship and control to guide organizations in
fulfilling their long-term economic, moral, legal and social obligations toward their stakeholders. It is a system of
direction, feedback and control using regulations, performance standards and ethical guidelines to hold the board
and senior management accountable for ensuring ethical behavior—reconciling long-term customer satisfaction
with shareholder value—to the benefit of all stakeholders and society. Its purpose is to maximize the organization’s
long-term success, creating sustainable value for its shareholders, stakeholders and the nation.”

What is the “Comply or Explain principle?”

The code adopts the “Comply or Explain” approach. This approach combines voluntary compliance with
mandatory disclosure. Companies do not have to comply with the code, but they must state in their annual
corporate governance reports whether they comply with the code provisions, identify any areas of noncompliance
and explain the reasons for noncompliance.

The code does not, in any way, prescribe a “one-size-fits-all” framework. It is designed to allow boards some
flexibility in establishing their corporate governance arrangements. Larger companies and financial institutions
would generally be expected to follow most of the provisions. Smaller companies may decide that the cost of some
of the provisions outweigh the benefits, or are less relevant in their case. Hence, the “Principle of Proportionality” is
considered in the application of its provisions.

What are the 16 Principles listed in the code?

The board’s governance responsibilities

Principle 1: The company should be headed by a competent, working board to foster the long-term success
of the corporation, and to sustain its competitiveness and profitability in a manner consistent with its
corporate objectives and the long-term best interest of its shareholders and other stakeholders.

Principle 2: The fiduciary roles, responsibilities and accountabilities of the Board as provided under the law,
the company’s articles and bylaws, and other legal pronouncements and guidelines should be clearly
made known to all directors, as well as to stockholders and other stakeholders.

Principle 3: Board committees should be set up to the extent possible to support the effective performance of
the Board’s functions, particularly with respect to audit, risk management, related party transactions
and other key corporate governance concerns, such as nomination and remuneration. The composition,
functions and responsibilities of all committees established should be contained in a publicly available
Committee Charter.

Principle 4: To show full commitment to the company, the directors should devote the time and attention
necessary to properly and effectively perform their duties and responsibilities, including sufficient time
to be familiar with the corporation’s business.

Principle 5: The Board should endeavor to exercise objective and independent judgment on all corporate
affairs.
Principle 6: The best measure of the Board’s effectiveness is through an assessment process. The Board
should regularly carry out evaluations to appraise its performance as a body, and assess whether it
possesses the right mix of backgrounds and competencies.

Principle 7: Members of the Board are duty-bound to apply high ethical standards, taking into account the
interest of all stakeholders.

Disclosure and transparency

Principle 8: The company should establish corporate disclosure policies and procedures that are practical
and in accordance with best practices and regulatory expectations

Principle 9: The company should establish standards for the appropriate selection of an external auditor,
and exercise effective oversight of the same to strengthen the external auditor’s independent and
enhance audit quality.

Principle 10: The company should ensure that material and reportable nonfinancial and sustainability issues
are disclosed.

Principle 11: The company should maintain a comprehensive and cost-efficient communication channel for
disseminating relevant information. This channel is crucial for informed decision-making by investors,
stakeholders and other interested users.

Internal control system and risk-management framework

Principle 12: To ensure the integrity, transparency and proper governance in the conduct of its affairs, the
company should have a strong and effective internal control system and enterprise risk management
framework.

Cultivating a synergic relationship with shareholders

Principle 13: The company should treat all shareholders fairly and equitably, and also recognize, protect and
facilitate the exercise of their rights.

Duties to stakeholders

Principle 14: The rights of stakeholders established by law, by contractual relations and through voluntary
commitments must be respected. Where stakeholders’ rights and/or interests are at stake, stakeholders
should have the opportunity to obtain prompt effective redress for the violation of their rights.

Principle 15: A mechanism for employee participation should be developed to create a symbolic
environment, realize the company’s goals and participate in its corporate governance processes.

Principle 16: The company should be socially responsible in all its dealings with the communities where it
operates. It should ensure that its interactions serve its environment and stakeholders in a positive and
progressive manner that is fully supportive of its comprehensive and balanced development.

SEC Circulars and Ordinances on Filing, Fines and Penalties

MEMORANDUM CIRCULAR NO. 17, Series of 2002: SCHEDULE OF FEES, FINES AND PENALTIES
TO : All Government Securities Eligible Dealers (GSED)
SUBJECT : Schedule of Fees, Fines and Penalties
To ensure an orderly, efficient, transparent and fair government securities (gs) market, and pursuant to Rule 13.3.1 (c)
of the Amended Rules Governing Secondary Market Trade of Government Securities, the Securities and Exchange
Commission, hereby adopts the following schedule of fees, fines and penalties for Government Securities Eligible
Dealers (GSED):

1. Fees Date of Amount

filing
New Registration
Head Office P 50,000 + other fees
Branch Office 10,000 + other fees
Renewal November 2
Head Office P 20,000 + other fees
Branch Office 5,000 + other fees

2. Fines and Penalties

Basic Penalty for Violation
Violations First Offense Second Third Offense Penalty for every day during
Offense which the violation continues
a) Failure to indicate Value Received 1/5 of 1% of the 2/5 of 1% of 3/5 of 1% of P100.00
(VR) on the trade transaction aggregate price the aggregate the aggregate
or value of price or value price or value
securities of securities of securities
transacted but transacted but transacted but
not less than not less than not less than
P3,000.00 P5,000.00 P10.000.00
b) Cancellation of trade transaction P3,000.00 P5,000.00 P10,000.00 P100.00
due to double encoding of
transaction, i.e. sale, purchase,
earmarking.
c) Late and/or non-reporting of gs P3,000.00 P5,000.00 P10,000.00 P100.00
trades to clients.
d) Erroneous encoding of trade details P1,000.00 P2,000.00 P3,000.00 P100.00
i.e. value date, account no., dealer
code, ISIN, face value, tenor,
counterparty's name.
e) Other violations determined by the P1,000.00 P2,000.00 P3,000.00 P100.00
BTr
This memorandum circular shall take effect immediately.
November 29, 2002, Mandaluyong City, Philippines.

Philippine Deposit Insurance Corporation (PDIC)

What is the Philippine Deposit Insurance Corporation (PDIC)?

PDIC is a government instrumentality created in 1963 by virtue of Republic Act 3591 to insure the deposits of all banks
which are entitled to the benefits of insurance. The latest amendments to RA 3591 are contained in RA 10846 signed into
law on May 23, 2016. RA 10846 empowered PDIC with stronger authorities to protect the depositing public and promote
financial stability. The new law also includes important provisions to ensure that the PDIC remains financially and
institutionally strong to fulfill its mandate under its Charter.
 What is the Philippine Deposit Insurance Corporation (PDIC)?
The PDIC now has the authority to help depositors have quicker access to their insured deposits should their bank close;
resolve problem banks while still open; hasten the liquidation process for closed banks; and mete out stiffer sanctions and
penalties against those who engage in unsafe and unsound banking practices.

The PDIC is an attached agency of the Department of Finance.

What is PDIC’s overall mandate?

PDIC exists to provide deposit insurance coverage for the depositing public to help promote public confidence and
stability in the economy. It ensures prompt payment of insured deposits, exercises complementary supervision of
banks, adopts responsive resolution methods, and applies efficient management of receivership and liquidation
functions.

What are the functions of PDIC?

Deposit Insurer
Co-regulator of Banks
Receiver and Liquidator of Closed Banks

What is PDIC’s maximum deposit insurance coverage?

Effective June 1, 2009, the maximum deposit insurance coverage is P500,000 per depositor. All deposit accounts by a
depositor in a closed bank maintained in the same right and capacity shall be added together. Under R.A. No. 9576, the
PDIC may propose to adjust the MDIC, subject to the approval of the President of the Philippines, in case of a condition
that threatens the monetary and financial stability of the banking system that may have systemic consequences.

What is an insured deposit?

The term ‘insured deposit’ means the amount due to any bona fide depositor for legitimate deposits in an insured bank
net of any obligation of the depositor to the insured bank as of date of closure, but not to exceed P500,000.00. A joint
account shall be insured separately from any individually-owned deposit account.

R.A. No. 9576 stipulates that PDIC will not pay deposit insurance for the following accounts or transactions:

Investment products such as bonds, securities and trust accounts;

Deposit accounts which are unfunded, fictitious or fraudulent;

Deposit products constituting or emanating from unsafe and unsound banking practices;

Deposits that are determined to be proceeds of an unlawful activity as defined under the Anti-Money
Laundering Law.

Are all banks members of PDIC?

Membership of banks to PDIC is mandatory; hence, all operating banks are members of PDIC.

Are deposits maintained in branches and subsidiaries of foreign banks operating in the Philippines insured by the
PDIC?

Yes, the PDIC Charter provides that the deposits in branches and subsidiaries of foreign banks licensed by the Bangko
Sentral ng Pilipinas (BSP) to perform banking functions in the Philippines are insured by the PDIC.
Are deposits maintained in Philippine banks with branches outside the Philippines insured by the PDIC?

The PDIC Charter provides that a Philippine bank may elect to insure with the PDIC its deposits in branches outside the
Philippines. As of 31 December 2012, no Philippine bank has elected to insure deposits in their foreign branches with
PDIC.

What specific risks to a bank does PDIC cover?

PDIC covers only the risk of a bank closure ordered by the Monetary Board. Thus, bank losses due to theft, fire, closure
by reason of strike or existence of public disorder, revolution or civil war, are not covered by PDIC.

Shall the depositor pay any insurance premium to PDIC?

No. Insurance premium is paid by the banks, not by the depositors. The bank is assessed 1/5 of 1% per annum of the
assessment base of the bank.

Can PDIC insurance coverage be increased by having several accounts in the same name in an insured bank?

No. Deposit insurance coverage is not determined on a per-account basis. The type of account (whether checking,
savings, time or other form of deposit) has no bearing on the amount of insurance coverage.

If I have deposits in several different insured banks, will my deposits be added together for insurance purposes?

No. Deposits in different banking institutions are insured separately. However, if a bank has one or more branches, the
main office and all branch offices are considered as one bank. Thus, if you have deposits at the main office and at one or
more branch offices of the same bank, the deposits are added together when determining deposit insurance coverage,
the total of which shall not exceed P500,000.

Is there a need for a depositor to file his claim for insured deposit with PDIC?

Yes. Depositors will be advised through the national and/or local media and posters at the premises of the closed
insured bank and other public places within the locality on the schedule of distribution of claim forms by PDIC,
receiving of claim forms by PDIC, and the prescriptive date of filing claims by the depositors

When should the depositor of a closed insured bank file his claim with PDIC?

The depositor of the closed insured bank has 24 months from date of bank takeover to file his deposit insurance claim.

What happens when the depositor of a closed bank fails to file his claim within the 24-month period?
All rights of the depositor with respect to the insured deposit shall no longer be honored. But he may still make a claim
against the assets of the closed bank

How long does it take PDIC to settle a claim for insured deposit?

PDIC aims to pay valid claims as soon as possible. Prior to payout, claims are examined thoroughly. This is to protect the
Deposit Insurance Fund (DIF) which is the source of insurance payments. Sometimes, depositors mistakenly assume
that the payouts are sourced from their deposits. This is not the case. The payouts are from PDIC’s own funds.

The claim for insured deposit should be settled within six (6) months from the date of filing provided all requirements
are met but the claim must be filed within twenty-four (24) months after bank takeover. The six-month period shall not
apply if the documents of the claimant are incomplete or if the validity of the claim requires the resolution of issues of
facts and law by another office, body or agency, independently or in coordination with PDIC
What processes are involved before PDIC starts servicing claims?

Deposit records are subjected to an examination prior to the start of servicing/settlement of claims. Claims are
evaluated and processed according to PDIC's standard procedures

How long does the pre-settlement examination take?

The length of time needed for the pre-settlement examination of deposit liabilities of a closed insured bank largely
depends on the completeness and accuracy of records turned over by the Bank to PDIC and the number of deposit
accounts to be examined

If the deposit account in a closed bank is more than P500,000.00, what happens to the excess of the maximum
amount of insured deposit?

The claim for the uninsured portion of the deposit is a claim against the assets of the closed bank. The claim may be
filed with the Liquidator of the closed bank within sixty (60) days from publication of notice of closure. However,
payment of said claim will depend on the bank’s available assets and approval of the Liquidation Court. The schedule of
payment beyond the P500,000.00 maximum insurance shall be based on priorities set by law

Secrecy of Bank Deposits and Unclaimed Balances Law

Q. What is the law on Secrecy of Bank Deposits?

According to Republic Act (RA) No. 1405 Section 2, “All deposits of whatever nature with banks or banking
institutions in the Philippines including investments in bonds issued by the Government of the Philippines, its political
subdivisions and its instrumentalities, are hereby considered as of an absolutely confidential nature and may not be
examined, inquired or looked into by any person, government official, bureau or office.”
Under the Foreign Currency Deposit Act of the Philippines, or FCDA, also known as Republic Act No. 6426, foreign
currency accounts may not be disclosed, except upon a written permission of the depositor.

Q. When did the law take effect?

Republic Act (RA) 1405 or the Bank Secrecy Law was passed in September 9, 1955 to encourage people to
deposit their money in banking institutions and to discourage private hoarding so that banks can give out in loans to
assist in the economic development of the country

The Foreign Currency Deposit Act (RA 6426) took effect upon its approval on April 14,1972.

Q. What are the exceptions to the bank secrecy law?

Written permission or consent in writing by the depositor;

In cases of impeachment;
Upon order of the court in cases of bribery or dereliction of duty of public officials;
Upon order of the court in cases where the money deposited or invested is the subject matter of the litigation;
Upon a subpoena issued by the Ombudsman concerning an investigation it is conducting, provided that there must
already be a case pending in court, the account be clearly identified, the inspection be limited to the subject
matter of the pending case; and the bank personnel and the depositor must be notified to be present during the
inspection;
The BIR can inquire into bank deposits in an application for compromise of tax liability or determination of a
decedent’s gross estate:
The Anti-Money Laundering Council (“AMLC”) can examine bank accounts pursuant to a court order, where there is
probable cause that the deposits are related to an unlawful activity or money laundering offense;
 The AMLC can examine bank accounts, WITHOUT a court order, where there is probable cause that the deposits are
related to certain crimes such as kidnapping for ransom, violation of the Dangerous Drugs Act, hijacking,
destructive arson, murder and violations of RA 6235 (acts inimical to civil aviation)
The Bangko Sentral can examine bank accounts in the course of its periodic or special examination regarding
compliance with Anti-Money Laundering Law.

Q. What will happen to any violation of the Law on Secrecy of Bank Deposits?

Section 5 of the RA states that violators will be subject to “conviction, to an imprisonment of not more than
five years or a fine of not more than P20,000, or both, in the discretion of the court.”

Anti-Money Laundering Act (AMLA)

What is money laundering?

Money laundering is an act or series or combination of acts whereby proceeds of an unlawful activity, whether in cash,
property or other assets, are converted, concealed or disguised to make them appear to have originated from legitimate
sources. One way of laundering money is through the financial system.

Republic Act No. 9160, otherwise known as the Anti-Money Laundering Act of 2001 (AMLA), as amended, defined
money laundering as a scheme whereby proceeds of an unlawful activity are transacted or attempted to be transacted,
thereby making them appear to have originated from legitimate sources.

What has the Philippine government done to curb money laundering?

The government enacted Republic Act (R.A.) No. 9160 (The Anti-Money Laundering Act of 2001), which took effect on
17 October 2001. Certain provisions of AMLA were amended by R.A. No. 9194 (An Act Amending R.A. 9160) effective 23
March 2003. It has also issued the Revised Implementing Rules and Regulations (RIRR) implementing R.A. No. 9160, as
amended.

What are considered unlawful activities under the AMLA, as amended?

There are 14 unlawful activities or predicate crimes covered by the AMLA. These are, in the order enumerated in the
law:

• Kidnapping for ransom • Drug offenses

• Graft and corrupt practices • Plunder
• Robbery and extortion • Jueteng and masiao
• Piracy on the high seas • Qualified theft
• Swindling • Smuggling
• Electronic Commerce crimes • Securities fraud
• Hijacking, destructive arson and murder, including those perpetrated against noncombatant persons
(terrorist acts)
• Felonies or offenses of a similar nature punishable under penal laws of other countries

How is money laundered through the financial system?

Placement – involves initial placement or introduction of the illegal funds into the financial system. Financial
institutions are usually used at this point.
Layering – involves a series of financial transactions during which the dirty money is passed through a series
of procedures, putting layer upon layer of persons and financial activities into the laundering process. Ex.
wire transfers, use of shell corporations, etc.
 Integration – the money is once again made available to the criminal with the occupational and geographic
origin obscured or concealed. The laundered funds are now integrated back into the legitimate economy
through the purchase of properties, businesses and other investments.

Why is Money Laundering a problem?

Money laundering allows criminals to preserve and enjoy the proceeds of their crimes, thus providing them with the
incentives and the means to continue their illegal activities. At the same time, it provides them the opportunity to
appear in public like legitimate entrepreneurs. Organized crime, through money laundering, is known to have the
capacity to destabilize governments and undermine their financial systems. It is thus a threat to national security.

What are the salient features of the law?

It criminalizes money laundering, meaning it makes money laundering a crime, and provides penalties for its
commission, including hefty fines and imprisonment.

It states clearly the determination of the government to prevent the Philippines from becoming a haven for
money laundering, while ensuring to preserve the integrity and confidentiality of good bank accounts.

It creates an Anti-Money Laundering Council (AMLC) that is tasked to oversee the implementation of the law
and to act as a financial intelligence unit to receive and analyze covered and suspicious transaction reports.

It establishes the rules and the administration process for the prevention, detection and prosecution of
money laundering activities.

It relaxes the bank deposit secrecy laws authorizing the AMLC and the Bangko Sentral ng Pilipinas access to
deposit and investment accounts in specific circumstances.

It requires covered institutions to report covered and suspicious transactions and to cooperate with the
government in prosecuting offenders. It also requires them to know their customers and to safely keep all
records of their transactions.

It carries provisions to protect innocent parties by providing penalties for causing the disclosure to the public
of confidential information contained in the covered and suspicious transactions.

It establishes procedures for international cooperation and assistance in the apprehension and prosecution of
money laundering suspects.

What is the Anti-Money Laundering Council (AMLC)? What are its powers?

The AMLC is the Philippines’ financial intelligence unit, which is tasked to implement the AMLA. It is composed of
the Governor of the Bangko Sentral ng Pilipinas (BSP) as Chairman & the Commissioner of the Insurance
Commission (IC) and the Chairman of the Securities and Exchange Commission (SEC) as members.

The AMLC is authorized to:

Require and receive covered or suspicious transaction reports from covered institutions.

Issue orders to determine the true identity of the owner of any monetary instrument or property that is the
subject of a covered or suspicious transaction report, and to request the assistance of a foreign country if
the Council believes it is necessary.

Institute civil forfeiture and all other remedial proceedings through the Office of the Solicitor General.
 Cause the filing of complaints with the Department of Justice or the Ombudsman for the prosecution of
money laundering offenses.

Investigate suspicious transactions, covered transactions deemed suspicious, money laundering activities
and other violations of the AMLA.

Secure the order of the Court of Appeals to freeze any monetary instrument or property alleged to be the
proceeds of unlawful activity.

Implement such measures as may be necessary and justified to counteract money laundering.

Receive and take action on any request from foreign countries for assistance in their own anti-money
laundering operations.

Develop educational programs to make the public aware of the pernicious effects of money laundering and
how they can participate in bringing the offenders to the fold of the law.

Enlist the assistance of any branch of government for the prevention, detection and investigation of money
laundering offenses and the prosecution of offenders. In this connection, the AMLC can require
intelligence agencies of the government to divulge any information that will facilitate the work of the
Council in going after money launderers.

Impose administrative sanctions on those who violate the law, and the rules, regulations, orders and
resolutions issued in connection with the enforcement of the law.

What are the covered institutions?

Banks, offshore banking units, quasi-banks, trust entities, non-stock savings and loan associations,
pawnshops, and all other institutions, including their subsidiaries and affiliates supervised and/or regulated
by the Bangko Sentral ng Pilipinas (BSP)

Insurance companies, holding companies and all other institutions supervised or regulated by the Insurance
Commission (IC)

Securities dealers, brokers, pre-need companies, foreign exchange corporations, investment houses, trading
advisers, as well as other entities supervised or regulated by the Securities and Exchange Commission (SEC)

What are the Customer Identification Requirements – KYC (Know Your Customer Rule)?

Covered institutions shall:

Establish and record the true identity of their clients based on official documents.
In case of individual clients, maintain a system of verifying the true identity of their clients.
In case of corporate clients, require a system verifying their legal existence and organizational structure, as well
as the authority and identification of all persons purporting to act in their behalf.
Establish appropriate systems and methods based on internationally compliant standards and adequate internal
controls for verifying and recording the true and full identify of their customers.

What are the Record-Keeping Requirements?

All covered institutions shall:

 Maintain and safely store all records of all their transactions for 5 years from the transaction dates;

Ensure that said records/files contain the full and true identity of the owners or holders of the accounts
involved in the covered transactions and all other identification documents;

Undertake the necessary adequate measures to ensure the confidentiality of such files;

Prepare and maintain documentation, in accordance with client identification requirements, on their
customer accounts, relationships and transactions such that any account, relationship or transaction can be
so reconstructed as to enable the AMLC and/or the courts to establish an audit trail for money laundering;

Maintain and safely store all records of existing and new accounts and of new transactions for 5 years from
October 17, 2001 or from the dates of the accounts or transactions, whichever is later;

Anent closed accounts, preserve and safely store the records on customer identification, account files and
business correspondence for at least 5 years from the dates they were closed;

If a money laundering case based on any record kept by the covered institution has been filed in court, retain
said files until it is confirmed that the case has been finally resolved or terminated by the court; and

Retain records as originals in such forms as are admissible in court

What are covered transactions?

Transaction in cash or other equivalent monetary instruments involving a total amount in excess of P= 500,000.00
within one (1) business day.

What are suspicious transactions?

Transactions, regardless of the amount involved, where the following circumstances exist:

there is no underlying legal or trade obligation, purpose or economic justification;

the client is not properly identified;

the amount involved is not commensurate with the business or financial capacity of the client;

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 Act;

any circumstance 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 institution;

the transaction is in any way related to an unlawful activity or offense under this Act that is about to be, is being or
has been committed; or

any transaction that is similar or analogous to the foregoing.

What are the reporting requirements?

Covered institutions shall report to the AMLC all covered transactions and suspicious transactions within five working
days from occurrence thereof, unless the Supervision Authority (the Bangko Sentral ng Pilipinas, the Securities and
Exchange Commission, or the Insurance Commission) prescribes a longer period not exceeding ten (10) working days.
Should a transaction be determined to be both a covered transaction and a suspicious transaction, it shall be reported
as suspicious transaction.

Are there confidentiality restrictions on the reporting of covered transaction and/or suspicious transaction?

When reporting covered transactions or suspicious transactions to the AMLC, covered institutions and their officers
and employees, are prohibited from communicating, directly or indirectly, in any manner or by any means, to any
person, entity, the media, the fact that a covered or suspicious transaction report was made, the contents thereof, or any
other information in relation thereto. Neither may such reporting be published or aired in any manner or form by the
mass media, electronic mail, or other similar devices. In case of violation thereof, the concerned officer, and employee,
of the covered institution, or media shall be held criminally liable.

What are the other offenses punishable under the AMLA, as amended?

Failure to keep records is committed by any responsible official or employee of a covered institution who fails
to maintain and safely store all records of transactions for 5 years from the dates the transactions were made
or when the accounts were closed.

Malicious reporting is committed by any person who, with malice or in bad faith, reports or files a completely
unwarranted or false information regarding a money laundering transaction against any person.

Breach of Confidentiality. In case the prohibited information is reported by media, the responsible reporter,
writer, president, publisher, manager, and editor-in-chief are held criminally liable.

Administrative offenses. The AMLC, after due investigation, can impose fines from P= 100,000.00 to P=
500,000.00 on officers and employees of covered institutions or any person who violates the provisions of the
AMLA, as amended, the Implementing Rules and Regulations, and orders and resolutions issued pursuant
thereto.

Intellectual Property Law, EXCEPT PART 1 OF R.A. 8293

What are Intellectual property rights under the I. P. Code?

The intellectual property rights under the Intellectual Property Code are as follows:
1. Copyright and related rights;
2. Trademarks and service marks;
3. Geographic indications;
4. Industrial designs;
5. Patents;
6. Layout designs [topographies] of integrated circuits; and
7. Protection of undisclosed information.

What are the functions of the Intellectual Property Office (IPO)?

To administer and implement the State policies declared in this Act, there is hereby created the Intellectual Property
Office (IPO) which shall have the following functions:

Examine applications for grant of letters patent for inventions and register utility models and industrial designs;
 Examine applications for the registration of marks, geographic indication, integrated circuits;

Register technology transfer arrangements and settle disputes involving technology transfer payments covered by
the provisions of Part II, Chapter IX on Voluntary Licensing and develop and implement strategies to promote
and facilitate technology transfer;

Promote the use of patent information as a tool for technology development;

Publish regularly in its own publication the patents, marks, utility models and industrial designs, issued and
approved, and the technology transfer arrangements registered;

Administratively adjudicate contested proceedings affecting intellectual property rights; and

Coordinate with other government agencies and the private sector efforts to formulate and implement plans and
policies to strengthen the protection of intellectual property rights in the country.

The Office shall have custody of all records, books, drawings, specifications, documents, and other papers and things
relating to intellectual property rights applications filed with the Office.

What are Patentable Inventions?

Any technical solution of a problem in any field of human activity which is new, involves an inventive step and is
industrially applicable shall be patentable. It may be, or may relate to, a product, or process, or an improvement of any
of the foregoing.

What are Non-Patentable Inventions?

The following shall be excluded from patent protection:

Discoveries, scientific theories and mathematical methods;
Schemes, rules and methods of performing mental acts, playing games or doing business, and programs for
computers;
Methods for treatment of the human or animal body by surgery or therapy and diagnostic methods practiced on
the human or animal body. This provision shall not apply to products and composition for use in any of these
methods;
Plant varieties or animal breeds or essentially biological process for the production of plants or animals. This
provision shall not apply to microorganisms and non-biological and microbiological processes. Provisions
under this subsection shall not preclude Congress to consider the enactment of a law providing sui generis
protection of plant varieties and animal breeds and a system of community intellectual rights protection:
Aesthetic creations; and
Anything which is contrary to public order or morality.

Novelty — An invention shall not be considered new if it forms part of a prior art.

What has the right/s to a Patent?

The right to a patent belongs to the inventor, his heirs, or assigns. When two (2) or more persons have jointly made an
invention, the right to a patent shall belong to them jointly.

What is “First to File Rule” doctrine?

If two (2) or more persons have made the invention separately and independently of each other, the right to the patent
shall belong to the person who filed an application for such invention, or where two or more applications are filed for
the same invention, to the applicant who has the earliest filing date or, the earliest priority date.
What is the term of Patent?

The term of a patent shall be twenty (20) years from the filing date of the application.

How Marks (trademarks) acquired?

The rights in a mark shall be acquired through registration made validly in accordance with the provisions of this law.

Registrability. A mark cannot be registered if it:

Consists of immoral, deceptive or scandalous matter, or matter which may disparage or falsely suggest a connection
with persons, living or dead, institutions, beliefs, or national symbols, or bring them into contempt or disrepute;

Consists of the flag or coat of arms or other insignia of the Philippines or any of its political subdivisions, or of any
foreign nation, or any simulation thereof;

Consists of a name, portrait or signature identifying a particular living individual except by his written consent, or
the name, signature, or portrait of a deceased President of the Philippines, during the life of his widow, if any,
except by written consent of the widow;

Is identical with a registered mark belonging to a different proprietor or a mark with an earlier filing or priority
date, in respect of:
The same goods or services, or
Closely related goods or services, or
If it nearly resembles such a mark as to be likely to deceive or cause confusion;

e. Is identical with, or confusingly similar to, or constitutes a translation of a mark which is considered by the
competent authority of the Philippines to be well-known internationally and in the Philippines, whether or not it
is registered here, as being already the mark of a person other than the applicant for registration, and used for
identical or similar goods or services: Provided, That in determining whether a mark is well-known, account
shall be taken of the knowledge of the relevant sector of the public, rather than of the public at large, including
knowledge in the Philippines which has been obtained as a result of the promotion of the mark;

f. Is identical with, or confusingly similar to, or constitutes a translation of a mark considered well-known in
accordance with the preceding paragraph, which is registered in the Philippines with respect to goods or
services which are not similar to those with respect to which registration is applied for: Provided, That use of the
mark in relation to those goods or services would indicate a connection between those goods or services, and the
owner of the registered mark: Provided further, That the interests of the owner of the registered mark are likely
to be damaged by such use;

g. Is likely to mislead the public, particularly as to the nature, quality, characteristics or geographical origin of the
goods or services; h. Consists exclusively of signs that are generic for the goods or services that they seek to
identify;

i. Consists exclusively of signs or of indications that have become customary or usual to designate the goods or
services in everyday language or in bona fide and established trade practice;

j. Consists exclusively of signs or of indications that may serve in trade to designate the kind, quality, quantity,
intended purpose, value, geographical origin, time or production of the goods or rendering of the services, or
other characteristics of the goods or services;

k. Consists of shapes that may be necessitated by technical factors or by the nature of the goods themselves or
factors that affect their intrinsic value;
 l. Consists of color alone, unless defined by a given form; or m. Is contrary to public order or morality

What are Literary and Artistic Works?

Literary and artistic works, hereinafter referred to as "works", are original intellectual creations in the literary and
artistic domain protected from the moment of their creation and shall include in particular:

Books, pamphlets, articles and other writings;

Periodicals and newspapers;
Lectures, sermons, addresses, dissertations prepared for oral delivery, whether or not reduced in writing or other
material form;
Letters;
Dramatic or dramatico-musical compositions; choreographic works or entertainment in dumb shows;
Musical compositions, with or without words;
Works of drawing, painting, architecture, sculpture, engraving, lithography or other works of art; models or designs
for works of art;
Original ornamental designs or models for articles of manufacture, whether or not registrable as an industrial
design, and other works of applied art;
Illustrations, maps, plans, sketches, charts and three-dimensional works relative to geography, topography,
architecture or science;
Drawings or plastic works of a scientific or technical character;
Photographic works including works produced by a process analogous to photography; lantern slides;
Audiovisual works and cinematographic works and works produced by a process analogous to cinematography or
any process for making audio-visual recordings;
Pictorial illustrations and advertisements;
Computer programs; and
Other literary, scholarly, scientific and artistic works.

Term of Protection of copyrights.

The copyright in works shall be protected during the life of the author and for fifty (50) years after his death. This rule
also applies to posthumous works. In case of works of joint authorship, the economic rights shall be protected during
the life of the last surviving author and for fifty (50) years after his death.

Republic Act No. 10372, signed on February 28, 2013, amends certain provisions of Republic Act No. 8293,
otherwise known as the Intellectual Property Code of the Philippines.

Is the reproduction of copyrighted material for personal purposes punishable by this law?

No. Infringement in this context refers to the economic rights of the copyright owner. So, if you transfer music from a
lawfully acquired CD into a computer, then download it to a portable device for personal use, then you didn’t commit
infringement. But if, for example, you make multiple copies of the CD to sell, then infringement occurs.

Are mall owners liable for infringement activities of their tenants?

Mall owners are not automatically penalized for the infringing acts of their tenants. When a mall owner or lessor finds
out about an infringement activity, he or she must give notice to the tenant, then he or she will be afforded time to act
upon this knowledge. As stated above, the law requires that one must have both proven knowledge of the infringement,
and the ability to control the activities of the infringing person, to be held liable. The mall owner must also have
benefitted from the infringement.

Is it legal for the Intellectual Property Office (IPO) to visit businesses to conduct searches based on reports,
information, and complaints?
The IPO may visit establishments based on reports and complaints; this in itself is constitutional. However, if the IPO
intends to perform a search and seizure, it must comply with constitutional requirements, such as having a search
warrant. A warrant wouldn’t be required, however, if the IPO is accompanied by the Bureau of Customs or the Optical
Media Board—two agencies that can perform a search and seizure on their own right without a warrant.

Data Privacy Act

What is the Data Privacy Act? What is the Data Privacy Act?

Republic Act No. 10173, otherwise known as the Data Privacy Act is a law that seeks to protect all forms of information,
be it private, personal, or sensitive. It is meant to cover both natural and juridical persons involved in the processing of
personal information.

What is the scope of the Data Privacy Act?

the Data Privacy Act applies to any natural or juridical persons involved in the processing of personal information. It
also covers those who, although not found or established in the Philippines, use equipment located in the Philippines, or
those who maintain an office, branch, or agency in the Philippines.

What is processing of personal information?

“processing refers to any operation or any set of operations performed upon personal information including, but not
limited to, the collection, recording, organization, storage, updating or modification, retrieval, consultation, use,
consolidation, blocking, erasure or destruction of data.

In other words, processing of personal information is any operation where personal information is involved. Whenever
your information is, among other things, collected, modified, or used for some purpose, processing already takes place.

What is personal information?

Under Sec. 3(g) of the Data Privacy Act, “personal information refers to any information whether recorded in a material
form or not, from which the identity of an individual is apparent or can be reasonably and directly ascertained by the
entity holding the information, or when put together with other information would directly and certainly identify an
individual.

In other words, personal information is any information which can be linked to your identity, thus making you readily
identifiable.

What is privileged information?

“privileged information refers to any and all forms of data which under the Rules of Court and other pertinent laws
constitute privileged communication.” One such example would be any information given by a client to his lawyer. Such
information would fall under attorney-client privilege and would, therefore, be considered privileged information.

Is there a difference between personal information and sensitive personal information?

Yes. While personal information refers to information that makes you readily identifiable, sensitive personal
information, as defined in Sec. 3(l) of the Data Privacy Act, refers to personal information:

About an individual’s race, ethnic origin, marital status, age, color, and religious, philosophical or political
affiliations;
 About an individual’s health, education, genetic or sexual life of a person, or to any proceeding for any offense
committed or alleged to have been committed by such person, the disposal of such proceedings, or the
sentence of any court in such proceedings;
Issued by government agencies peculiar to an individual which includes, but not limited to, social security
numbers, previous or cm-rent health records, licenses or its denials, suspension or revocation, and tax
returns; and
Specifically established by an executive order or an act of Congress to be kept classified.

Therefore, any information that can be categorized under any of the enumerated items are considered sensitive
personal information.

Are there any exceptions to the application of the Data Privacy Act?

The Data Privacy Act explicitly states that its provisions are not applicable in the following cases:

Information about any individual who is or was an officer or employee of a government institution that
relates to the position or functions of the individual, including:
(1) The fact that the individual is or was an officer or employee of the government institution;
(2) The title, business address and office telephone number of the individual;
(3) The classification, salary range and responsibilities of the position held by the individual; and
(4) The name of the individual on a document prepared by the individual in the course of employment with
the government;

Information about an individual who is or was performing service under contract for a government
institution that relates to the services performed, including the terms of the contract, and the name of the
individual given in the course of the performance of those services;

Information relating to any discretionary benefit of a financial nature such as the granting of a license or
permit given by the government to an individual, including the name of the individual and the exact nature of
the benefit;

Personal information processed for journalistic, artistic, literary or research purposes

Information necessary in order to carry out the functions of public authority which includes the processing of
personal data for the performance by the independent, central monetary authority and law enforcement and
regulatory agencies of their constitutionally and statutorily mandated functions. Nothing in this Act shall be
construed as to have amended or repealed Republic Act No. 1405, otherwise known as the Secrecy of Bank
Deposits Act; Republic Act No. 6426, otherwise known as the Foreign Currency Deposit Act; and Republic Act
No. 9510, otherwise known as the Credit Information System Act (CISA);

Information necessary for banks and other financial institutions under the jurisdiction of the independent,
central monetary authority or Bangko Sentral ng Pilipinas to comply with Republic Act No. 9510, and
Republic Act No. 9160, as amended, otherwise known as the Anti-Money Laundering Act and other applicable
laws; and
 Personal information originally collected from residents of foreign jurisdictions in accordance with the laws
of those foreign jurisdictions, including any applicable data privacy laws, which is being processed in the
Philippines.

Are companies required to appoint someone who should be responsible for ensuring compliance with the Data
Privacy Act?

Yes. Under the Implementing Rules and Regulations of the Data Privacy Act, all organizations are required to appoint a
Data Protection Officer (“DPO”). The Data Protection Officer shall be accountable for ensuring compliance with the
appropriate data protection laws and regulations.

Can there be more than one person who shall perform the functions of a Data Protection Officer in an
organization?

Yes. The Implementing Rules and Regulations of the Data Privacy Act speaks of an individual or individuals who shall
perform the functions of a Data Protection Officer or a Compliance Officer.

How is privileged information treated by the Data Privacy Act?

Much like sensitive personal information, the processing of privileged information is prohibited by the law.

What are the cases where the processing of sensitive personal information and privileged information is allowed?

Section 13 of the Data Privacy Act enumerates the cases where sensitive personal information and privileged
information may be processed. These are the following:

The data subject has given his or her consent, specific to the purpose prior to the processing, or in the case of
privileged information, all parties to the exchange have given their consent prior to processing;

The processing of the same is provided for by existing laws and regulations: Provided, That such regulatory
enactments guarantee the protection of the sensitive personal information and the privileged information:
Provided, further, That the consent of the data subjects are not required by law or regulation permitting the
processing of the sensitive personal information or the privileged information;

The processing is necessary to protect the life and health of the data subject or another person, and the data
subject is not legally or physically able to express his or her consent prior to the processing;

The processing is necessary to achieve the lawful and noncommercial objectives of public organizations and
their associations: Provided, That such processing is only confined and related to the bona fide members of
these organizations or their associations: Provided, further, That the sensitive personal information are not
transferred to third parties: Provided, finally, That consent of the data subject was obtained prior to
processing;

The processing is necessary for purposes of medical treatment, is carried out by a medical practitioner or a
medical treatment institution, and an adequate level of protection of personal information is ensured; or

The processing concerns such personal information as is necessary for the protection of lawful rights and
interests of natural or legal persons in court proceedings, or the establishment, exercise or defense of legal
claims, or when provided to government or public authority.
 Electronic Commerce Act

When did the law take effect?

Republic Act 8792 or the Electronic Commerce (E-Commerce) Act was signed into law last June 14, 2000

What are the salient features of Republic Act 8792?

It gives legal recognition of electronic data messages, electronic documents, and electronic signatures.
Allows the formation of contracts in electronic form.
Makes banking transactions done through ATM switching networks absolute once consummated.
Parties are given the right to choose the type and level of security methods that suit their needs.
Provides the mandate for the electronic implementation of transport documents to facilitate carriage of
goods. This includes documents such as, but not limited to, multi-modal, airport, road, rail, inland waterway,
courier, post receipts, transport documents issued by freight forwarders, marine/ocean bill of lading, non-
negotiable seaway bill, charter party bill of lading.
Mandates the government to have the capability to do e-commerce within 2 years or before June 19, 2002.
Mandates RPWeb to be implemented. RPWeb is a strategy that intends to connect all government offices to
the Internet and provide universal access to the general public. The Department of Transportation and
Communications, National Telecommunications Commission, and National Computer Center will come up
with policies and rules that shall lead to substantial reduction of costs of telecommunication and Internet
facilities to ensure the implementation of RPWeb.
Made cable, broadcast, and wireless physical infrastructure within the activity of telecommunications.
Empowers the Department of Trade and Industry to supervise the development of e-commerce in the
country. It can also come up with policies and regulations, when needed, to facilitate the growth of e-
commerce.
Provided guidelines as to when a service provider can be liable.
Authorities and parties with the legal right can only gain access to electronic documents, electronic data
messages, and electronic signatures. For confidentiality purposes, it shall not share or convey to any other
person.

What are the cybercrimes penalized under the Act?

Hacking or Cracking – unauthorized access into or interference in a computer system/server or information

and communication system; or any access in order to corrupt, alter, steal or destroy using a computer or
other similar information and communication devices, without the knowledge and consent of the owner of
the computer or information and communication system, including the introduction of viruses and the like,
resulting in the corruption, destruction, alteration, theft or loss of electronic data messages or electronic
document.

Piracy – the unauthorized copying, reproduction, dissemination, distribution, importation, use, removal,
alteration, substitution, modification, storage, uploading, downloading, communication, making available to
the public, r broadcasting of protected material, electronic signature or copyrighted works including legally
protected sound recording or phonograms or information material or protected works, through the use of
telecommunication networks.

All existing laws such as the Consumer Act of the Philippines also applies to e-commerce transactions.

Ease of Doing Business Law

When did the law took effect?

The Republic Act No. 11032, known as the “Ease of Doing Business and Efficient Government Service Delivery Act of
2018,” took effect on June 17, 2018

What are the salient features of the law?

The creation of this law is expected to diminish a number of complaints on delayed government transactions. Through
RA 11032, the ease of doing business will now be simpler as a result of more improved systems and procedures of both
national and local government services.

The law specifically aims to reduce processing time, cut bureaucratic red tape, and also eliminate corrupt practices.

Processing time for government agencies and government-owned and controlled corporations is three working days
for simple transactions, seven days for complex transactions, and 20 working days for highly technical ones.

It also requires all local government units to devise a unified business application form for the issuance of business
permits, clearance, and other types of authorizations, as well as set-up a one-stop-shop to facilitate all business
transactions.

The law also warrants the creation of the Anti-Red Tape Authority, which will be under the Office of the President, as
key implementer of RA 11032 tasked to monitor agencies’ compliance

In addition, a seven-person policy and advisory body, the Ease of doing Business/Anti-Red Tape Advisory Council will
also be created to compose the DTI Secretary (chair), ARTA Director General (vice-chair), the Secretaries of DOF, DICT,
and DILG, and two representatives from the private sector, as members.

***Note: General Banking Laws (GBL), Financial Rehabilitation and Insolvency Act (FRIA), Updates on special concern
have been removed

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