Published 30 December 2019, The Daily Tribune

A public official received a fat commission for facilitating the sale of a government property. His superior got wind of the information and launched his own investigation preparatory to filing the appropriate criminal and administrative charges against the erring public official. To negate evidence of laundering, at least in the mind of the public official, the initial plan of keeping the commission in his bank account was substituted by a request to his legal counsel to safekeep it. Is the legal counsel guilty of money-laundering or can he validly argue that he is not a covered person under the Anti-Money Laundering law because as such counsel, he is bound by the lawyer-client confidentiality rule? What is money laundering and what are the ways of committing it?

Money laundering is a crime whereby the proceeds of an unlawful activity are transacted thereby making them appear to have originated from legitimate sources. Based on the original provisions of the law (Republic Act 9160), there were only three ways of committing the crime: a) if any person who, knowing that any monetary instrument or property represents, involves, or relates to the proceeds of any unlawful activity transacts said monetary instrument or property, or b) he performs or fails to perform any act as a result of which he facilitates the offense of money laundering; and, c) if any covered person who, knowing that a covered or suspicious transaction, is required under the law to be reported to the Anti-Money Laundering Council (AMLC), fails to do so.

A covered transaction is a transaction with a covered institution in cash or other equivalent monetary instrument involving the total amount in excess of P500,000 within one banking day, while suspicious transactions are transactions with a covered institution, regardless of the amounts involved, where any of the following circumstances exists:

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. The client’s transaction is so structured in order to avoid being the subject of reporting requirements.
5. Any circumstance relating to the transaction which is observed to deviate from the profile of the client and/or his past transaction with the covered institution.
6. Transaction is in any way related to an unlawful activity or offense that is about to be, being, or has been committed.
7. Any transaction analogous to the foregoing.

The modes were thereafter expanded to make any person criminally liable if he: converts, transfers, disposes of, moves, acquires, possesses or uses said monetary instrument or property; conceals or disguises the true nature, source, location, disposition, movement or ownership of or rights with respect to said monetary instrument or property; attempts or conspires to commit money laundering offenses; or, simply aids, abets, assists in or counsels in the commission of money laundering (Republic Act 10365).

The term “covered persons” excludes lawyers acting as independent legal professionals in relation to information concerning their clients or where disclosure of information would compromise client confidences or the attorney-client relationship: Provided, That these lawyers are authorized to practice in the Philippines. This means that such lawyers are not required to fulfill the obligations of covered institutions/persons such as: a) customer identification; b) record keeping (records should be kept and safely stored for five years from date of the transaction), and c) reporting of covered and suspicious transactions.

Note that it is not enough that he is a lawyer. To be relieved from the statutory obligations, the lawyer must be acting as independent legal professional, meaning he is engaged in the practice of law. And the exemption is confined to information received in the course of the professional relationship.

In other words, he is not required to report to AMLC covered or suspicious transactions of his client. More specifically, he is not criminally liable for violation of the Anti-Money Laundering Law even if he fails to disclose to AMLC that his client committed money laundering. But, if he keeps or possesses laundered funds, he becomes liable for money laundering likewise. This is true even for non-lawyers. By reason of the sweeping language of the amendatory provision of the law, any person who in any manner abets, assists and conspires in the commission of money laundering is similarly liable for the same offense.

Next time a person comes to you with a request to keep any monetary instrument or property, act with extreme prudence. Make sure it does not relate to any money laundering offense. Otherwise, you cannot escape criminal prosecution. Remember, good faith is not a defense. The Anti-Money Laundering law is a special law. The commission of any act in violation of the law constitutes criminal liability regardless of the lack of criminal intent.

Laundered money? Don’t touch it!

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