MONEY LAUNDERING

PREVENTION

PROGRAM

FOR

COOPERATIVE

INSURANCE SYSTEM OF

THE PHILIPPINES

TABLE OF CONTENTS

Chapter 1 - Anti Money Laundering Overview AMLA and AMLC Overview Definition of Money Laundering

Unlawful Activities Requirement of AMLA Covered Institution Types of Report Covered Transaction Suspicious Transaction Offenses and Penalties

Chapter 2 - Requirement and Procedure for AMLA

Specific Persons and its Function KYC Process Valid Identification Documents Minimum Requirements for Individual Minimum Requirements for Cooperative Procedure Transaction Reporting For Covered Transaction For Suspicious Transaction Procedure Record Keeping Chapter 3 – Procedure on Submitting the Report to AMLC

CHAPTER 1

What is AMLA?

Republic Act No. 9160 otherwise known as The Anti-Money Laundering Act of 2001 was signed into law on September 29, 2001 and took effect on October 17, 2001. The implementing Rules and Regulations took effect on April 2, 2002. On March 7, 2003, R.A. No. 9194 (An Act Amending R.A. No. 9160) was signed into law and took effect on March 23, 2003. The revised Implementing Rules and Regulations took effect on September 7, 2003.

What is AMLC?

The Anti-Money Laundering Council is composed of the Governor of the Bangko Sentral ng Pilipinas (BSP) as Chairman and the Commissioner of the Insurance Commission (IC) and the Chairman of the Securities and Exchange Commission (SEC) as members. It acts unanimously in the discharge of its functions.

The AMLC is assisted by a Secretariat headed by an Executive Director and consists of five (5) units; the Compliance and Investigation Group (CIG), the Legal Evaluation Group (LEG), the Information Management and Analysis Group (IMAG), Technical Services Staff (TSS) and the Administrative and Financial Services Division (AFSD).

AMLC is the organization where the Money Laundering Report will be submitted.

What is Money Laundering?

Money Laundering is a crime whereby the proceeds of an unlawful activity are transacted or attempted to be transacted to make them appear to have originated from legitimate sources.

Unlawful Activity is the offense which generates dirty money or property. It is commonly called

the predicate crime. It refers to any act or omission or series or combination thereof involving or

having direct relation to the following:

Kidnapping for ransom Drug trafficking and related offenses Graft and corrupt practices Plunder Robbery and Extortion Jueteng and Masiao Piracy Qualified theft Swindling Smuggling

Violations under the Electronic Commerce Act of 2000 Hijacking; destructive arson; and murder, including those perpetrated by terrorists

against non-combatant persons and similar targets Fraudulent practices and other violations under the Securities Regulation Code of 2000 Felonies or offenses of a similar nature that are punishable under the penal laws of other

countries. Terrorism financing and organizing or directing others to commit terrorism financing (R.A.

10168). Attempt/conspiracy to commit terrorism financing and organizing or directing others to

commit terrorism financing (R.A. 10168). Attempt/conspiracy to commit dealing with property or funds of designated person. Accomplice to terrorism financing or conspiracy to commit terrorism financing. Accessory to terrorism financing.

Requirements of AMLA

Know Your Customer (KYC) Policy

Reporting of Covered and Suspicious Transactions

Records Keeping

Who are Covered Institution?

Covered Institutions are those mandated by the AMLA to submit covered and suspicious Transaction reports to the AMLC. These are:

Banks and all other entities, including their subsidiaries and affiliates, supervised and regulated by the Bangko Sentral ng Pilipinas

Insurance companies, pre-need companies and all other institutions supervised or regulated by the Insurance Commission

Securities dealers and other entities supervised or regulated by the Securities and Exchange Commission

Types of Report

Covered transactions are single transactions in cash or other equivalent monetary instrument involving a total amount in excess of Five Hundred Thousand (P500, 000.00) Pesos within one (1) banking day

Suspicious transactions are transactions with covered institutions, regardless of the amounts involved, where any of the following circumstances exists:

there is no underlying legal/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;

the transaction is structured to avoid being the subject of reporting requirements under the AMLA;

there is a deviation from the client’s profile/past transactions; the transaction is related to an unlawful activity/offense under the AMLA; and transactions similar or analogous to the above.

Offenses and Penalties

Knowingly transacting or attempting to transact any monetary instrument/property which represents, involves or relates to the proceeds of an unlawful activity. Penalty is 7 to 14 years imprisonment and a fine of not less than P3M but not more than twice the value of the monetary instrument/property.

Knowingly performing or failing to perform an act in relation to any monetary instrument/property involving the proceeds of any unlawful activity as a result of which he facilitated the offense of money laundering. Penalty is 4 to 7 years imprisonment and a fine of not less than P1.5M but not more than P3M.

Knowingly failing to disclose and file with the AMLC any monetary instrument/property required to be disclosed and filed. Penalty is 6 months to 4 years imprisonment or a fine of not less than P100,000 but not more than P500,000, or both.

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 all transactions of said institution, including closed accounts, for five (5) years from the date of the transaction/closure of the account. Penalty is 6 months to 1 year imprisonment or a fine of not less than P100,000 but not more than P500,000, or both.

Malicious reporting is committed by any person who, with malice or in bad faith, reports/files a completely unwarranted or false information relative to money laundering transaction against any person. Penalty is 6 months to 4 years imprisonment and a fine of not less than P100,000 but not more than P500,000, at the discretion of the court. The offender is not entitled to avail the benefits of the Probation Law.

If the offender is a corporation, association, partnership or any juridical person, the penalty shall be imposed upon the responsible officers, as the case may be, who participated in, or allowed by their gross negligence, the commission of the crime.

If the offender is a juridical person, the court may suspend or revoke its license. If the offender is an alien, he shall, in addition to the penalties prescribed, be deported

without further proceedings after serving the penalties prescribed. If the offender is a public official or employee, he shall, in addition to the penalties

prescribed, suffer perpetual or temporary absolute disqualification from office, as the case may be.

Breach of confidentiality. When reporting covered or suspicious transactions to the AMLC, covered institutions and their officers/employees are prohibited from communicating directly or indirectly, in any manner or by any means, to any person/entity/media, the fact that such report was made, the contents thereof, or any

other information in relation thereto. In case of violation thereof, the concerned official and employee of the covered institution shall be criminally liable. 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 a breach of confidentiality published or reported by media, the responsible reporter, writer, president, publisher, manager and editor-in-chief shall also be held criminally liable. Penalty is 3 to 8 years imprisonment and a fine of not less than P500,000 but not more than P1M.

CHAPTER 2

1. List of Specific Persons and its Function

Chairman of the Cooperative - is the chief officer of Cooperative elected or appointed by Board of Directors and is charged with the supervision and management of high level affairs of the organization such as making corporate policy or approving actions of the management. He is also primarily responsible to overall Cooperative Operations specially transactions which are related to AMLA. Compliance Officer - is an employee of the Cooperative with at least a rank of manager appointed by the Board of Directors who is primarily responsible for the overseeing and managing of regulatory compliance issues and ensuring that the organization is compliant with said regulatory concerns. In AMLA reporting, its main function is to collaborate all reportable transaction and check applicable guidelines issued by the AMLC. Submission of report is also one of his/her responsibilities since encryption is named under his/her. Alternate Compliance Officer - is an officer of the Cooperative with at least a rank of a manager appointed by the Board of the Directors, who in the absence of the compliance officer, is responsible for all the functions left by the Compliance Officer including the actual submission of the report but under his/her own encryption name.

2. The KYC Processes

Member’ personally

appear in the

Cooperative

Member’s identity

verified by any

Cooperative staff

Verify Identification Card

presented and member’s

specimen signature

Check name against

watch lists

Check completeness of

information requirement

and authenticity of all

documents submitted

Member must personally appear in the cooperative

Then, cooperative staff verify member’s identity through the following:

- Verify member’s presented ID

- Verify signature in duly accomplished application form against file copy of specimen

signature

- Check member’s name against watch lists

- Check completeness of information requirement and authenticity of all documents

submitted

Valid Identification Documents

Passport

Driver’s license

PRC ID

Police clearance

Postal ID

TIN ID

GSIS ID e-Card

SSS ID

OWWA ID

OFW ID

SEC

DSWD certification

Integrated Bar of the Phil. (IBP) ID

NBI clearance

National ID

Student ID

Voter’s ID

SEC Certificate

Company ID

Barangay certification

Gov’t Office and GOCC

Senior citizen’s card

Seaman’s Book

ACR/Immigrant Certificate of Registration ID (e.g. AFP, HDMF)

Certification from National Council for Welfare and Devt. (NCWDP)

Business Registration Certificate

Minimum Information (Individual)

1. Name 2. Complete Present address 3. Complete Permanent address 4. Date and place of birth 5. Nature of work and name of employer or nature of self-employment/business 6. Contact details 7. Specimen signature 8. Source of funds, including country of origin 9. Complete Permanent address 10. Nationality 11. TIN, SSS or GSIS numbers, if any 12. Name, present address, date and place of birth, nature of work and source of funds of

beneficiary. 13. Valid ID

Minimum Information (Cooperative)

1. Name 2. Complete Business address 3. Date and place of birth/Certificate of Registration by pertinent government agency 4. Contact Details 5. Nature of business 6. Nationality 7. Articles of Cooperative and By Laws

Procedures:

1. To include on Memorandum of Agreement (MOA) the responsibility of Cooperative to personally verify information in each member individual. For those Cooperative with existing MOA, an Addendum is required.

2. For insured individual with insured amount of more than P500, 000, the Underwriting Unit must ensure that all minimum requirements are met both for individual and cooperative before accepting insurance application.

3. Reporting

Covered transaction- to be reported to AMLC within 10 days from transaction date Suspicious transactions- to be reported to AMLC within 10 days from date of knowledge or discovery.

Should a transaction be deemed to be both a covered and suspicious transaction, the same shall be reported as a suspicious transaction.

Procedures:

Preparation of Transaction Report

Head Office Marketing Unit

Prepare report base on

the discussed AMLA

format

Submit the report to the

Unit Supervisor and Unit

Head for checking

Forward to Compliance

Officer or to the

Alternate Compliance

Officer

Accomplish the AMLA

form

Forward to HO. make

sure that the report is

sealed and label it as

follow “AMLA Report- to

be viewed only by the

Compliance officer”.

Submit the report to the

General Agency manager

for checking

1. For Head Office Unit

Head Office employee is required to submit a softcopy of the report to the compliance officer and a hardcopy of the same together with his/her complete name, position and signature.

Prepared by: Checked by: Certified Correct:

Staff Supervisor Manager

Units having one junior officer

Prepared by: Certified Correct:

Staff Supervisor or Manager

2. Marketing Unit

Insurance agent accomplish the AMLA form. Marketing Agent to indicate his/her name and affix his/her signature on the Prepared by portion and forward it to your corresponding General Agency Manager. The GAM will then sign and forward the same to Head Office Compliance officer.

When reporting covered or suspicious transactions to AMLC, the Organization and its 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 thereof. Neither 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. Refer to Chapter 1 (Offenses and Penalties).

The covered and suspicious reports should follow the prescribed format discuss here at

head office. Meanwhile for the Marketing Agent see Annex A for the AMLA form. The reports should be reported to the Compliance Officer within five (5) days from transaction date/date of knowledge or discovery to give ample time to consolidate the reports.

4. Records Keeping

Purpose: for reconstruction and for audit trail

Transaction records- to be kept for five (5) years from the date of transaction

Report subject of money laundering case- to be retained beyond five (5) years until it is

confirmed that the case has been finally resolved or terminated by the court. The

concerned unit must make sure that the records are safely kept and intact.

CHAPTER 3

Procedure on Submitting the Report to AMLC

1. The Report Received from the different Units will be consolidated by the Compliance

Officer every day.

2. The softcopy of the report will be checked by the Compliance Officer based on the CSV

File format checker of the AMLC while the hardcopy will be filed for future references.

3. When an error occur while checking, it should be corrected immediately by the

Compliance Officer together with the concerned unit.

4. Once the Report is found to have “no error”, the Compliance Officer will sign and encrypt

it using the Kleopatra. Said system is made available by AMLC.

5. The encrypted report will be uploaded on the AMLC Portal. Any bad records or error that

may occur should be corrected together with the concerned unit.

6. Maximum of 5 days is given to the Compliance officer to finish the uploading in the AMLC

portal starting from the date the report was received from various units.

7. The Preparer of the Report is the assigned Compliance Officer or the Alternate

Compliance Officer while the Chairman of the CISP will be in full responsibility as a whole.

Received

Reports from

Head Office Unit

and Marketing

Unit

Check report from

the CSV file format

checker

Sign and encrypt

the report using

the Kleopatra

Upload the

report on the

AMLC Portal

ANNEX A

AMLA FORM

Type of Transaction: ___________________________________________________________ Date Reported: ___________________________________________________________ Transaction Date: ___________________________________________________________ Amount: ___________________________________________________________ Policy Effective Date: ___________________________________________________________ Maturity Date: ___________________________________________________________ Term of Insurance: ___________________________________________________________ Policy Owner (Cooperative) Name of Cooperative: ___________________________________________________________ Complete Address: ___________________________________________________________ Registration Date: ___________________________________________________________ Place of Registration: ___________________________________________________________ ID Type (ex. Registration Certificate):_______________________________________________________ ID No: ___________________________________________________________ Insured (Individual) Complete Name: ___________________________________________________________ Complete Address: ___________________________________________________________ Birthdate: ___________________________________________________________ Place of Birth: ___________________________________________________________ ID Type (ex. Tin) ___________________________________________________________ ID No: ___________________________________________________________ Beneficiary Complete Name: ___________________________________________________________ Complete Address: ___________________________________________________________ Birthdate: ___________________________________________________________ Place of Birth: ___________________________________________________________ Relationship to beneficiary: ___________________________________________________________ Designation (Revocable or Irrevocable):_____________________________________________________ Prepared by: ___________________________ Name and Signature

Noted by:

___________________________ Name and Signature