AMLC rationalizes sanctions vs anti-money laundering violators


By Lee C. Chipongian

The inter-agency Anti-Money Laundering Council (AMLC) has replaced its previous penalty metrics and lowered the sanctions imposed on violators of the Anti-Money Laundering Act (AMLA) after Bangko Sentral ng Pilipinas (BSP) Governor Benjamin E. Diokno called it “absurd.”

AMLC Secretariat Executive Director, Atty. Mel Georgie B. Racela, said in an interview that they merely “re-distributed” sanctions allowed under AMLA which is not to exceed P500,000.

“The word we use is rationalization. We rationalize the penalty metrics,” according to Racela. The sanctions now range from a low of P1,000 to P500,000 for all violations based on the amended penalty metrics, now called the AMLC’s “Rules on Procedure in Administrative Cases” (RPAC). The amended RPAC was previously known as “Rules on Imposition of Administrative Sanctions” (RIAS) which implemented a range of sanctions from 5,000 to P500,000.

Racela said the RPAC was approved in late July this year and the adjustments gave way to revised processes in the imposition of sanctions, which in turn rationalized the distribution of penalties.

Racela said this is an AMLC penalty metrics and it’s the AMLC’s rules on how to impose sanctions. But, all other circulars on penalties are on the BSP side.

“Those are different from the AMLC,” explained Racela. Diokno has often repeated his intention to revisit all BSP circulars such as on the imposition of penalties that may be dated and no longer relevant.

Based on the RPAC, the determination of the amount of administrative sanctions will depend on a three-stage assessment process. Step one is to determine if the violation is grave, major, serious, less serious and light. Step two is to classify the violator in asset size, whether micro, small, medium, Large A or Large B. The last step is to determine the presence of aggravating and/or mitigating circumstances.

For example, a micro offender committing grave violations will be slapped penalties amounting to P25,000 per violation but not exceeding P1 million. The maximum penalty is P50,000 but not exceeding P2 million.

For a Large B violator, the penalty starts at P250,000 minimum per violation but not exceeding P10 million. The maximum is P500,000 but not exceeding P20 million.

AMLA defines money laundering as “a crime whereby the proceeds of an unlawful activity are transacted, thereby making them appear to have originated from legitimate sources.”