AML Council to Impose Sanctions on Property Dealers for Non-compliance

The Philippines’s Anti-Money Laundering Council (AMLC) is all set to impose sanctions and fines on real estate brokers for AMLA violations.

Pursuant to the Anti-Money Laundering Act 2001 (AMLA),  as recently amended by Republic Act No. 11521, which was implemented on 30 January 2021,  real estate brokers (REBs), real estate developers (REDs), offshore gaming operators (OGOs), and OGO-service providers (OGO-SPs) now need to report suspicious transactions to the Anti-Money Laundering Council (AMLC) within the period prescribed and for the threshold amount fixed by the law.

To enable covered persons to file reports, Sec. 4, Rule 22 of the 2018 apply Rules and Regulations (IRR) provides that “all covered persons shall register with the AMLC’s electronic reporting system in accordance with the registration and reporting guidelines.” However, entities can register them with the AMLC through digital portals.

Sec. 1.4, Rule 35 of the 2018 IRR further provides that “for existing covered persons who are not yet registered: they shall not be cited for non-registration. Provided that they shall apply for registration within thirty (30) working days from the effectiveness of this IRR.”

However, in accordance with the AML amendments, property developers and brokers that failed to register last week may be sanctioned, according to the regulatory bodies.

AMLC has said that all newly emerged entities must get registered by December 2021 under anti-dirty money and counter-terrorism financing compliance. Only registered entities and businesses will be provided access to the council’s registration portal.

Due to rising cases of financial crimes like money laundering and terrorism financing, the Philippine government has been doing efforts to strengthen AML regulations after FATF placed the country on its “gray list” citing shortcomings in the AML and CTF framework. Thus, under AML Council reporting and registration standards, real estate developers and brokers are obliged to screen clients’ transactions to determine the true identities of the property buyers.

“If not registered, (the designated non-financial businesses and professions) would not be able to electronically submit covered and suspicious transaction reports,” AMLC said. 

Therefore, real estate brokers and businesses that fail to register by this month, could face a hefty fine and regulatory sections as an administrative offense under the Rules of Procedure on Administrative Cases. Additionally, non-compliant with AML compliance and suspicious transaction reporting with AMLC, alleged entities will be held questionable as a money laundering offense under Sec. 4 of the AMLA amendment.

Suggested Read: Philippines AML Council Adds POGO to its Non-Compliance List