AMLC Registration in the Philippines: Who Counts as a Covered Person

The term covered persons refers to the businesses and institutions that Philippine anti-money laundering (AML) rules require to register with the Anti-Money Laundering Council (AMLC) and comply with reporting obligations. Under the Bangko Sentral ng Pilipinas (BSP) framework, covered persons include banks, non-banks, quasi-banks (QBs), trust entities, non-stock savings and loan associations, pawnshops, foreign exchange dealers, money changers, remittance and transfer companies, electronic money issuers, and other financial institutions that under special laws are subject to BSP supervision or regulation. Subsidiaries and affiliates that are themselves covered persons are included, wherever they may be located.

Who counts as a covered person under the BSP rules

BSP Circular No. 950, which amended the Anti-Money Laundering Regulations of the Manual of Regulations for Banks and the Manual of Regulations for Non-Bank Financial Institutions, defines covered persons by reference to institutions supervised or regulated by the Bangko Sentral. The list expressly includes:

• Banks
• Non-banks and quasi-banks
• Trust entities
• Non-stock savings and loan associations
• Pawnshops
• Foreign exchange dealers
• Money changers
• Remittance and transfer companies
• Electronic money issuers
• Other financial institutions which under special laws are subject to Bangko Sentral supervision and/or regulation

The same provision states that covered persons include their subsidiaries and affiliates, which are also covered persons, wherever they may be located. A subsidiary is defined as an entity more than fifty percent (50%) of the outstanding voting stock of which is owned by a covered person. An affiliate is an entity at least twenty percent (20%) to not more than fifty percent (50%) of the voting stock of which is owned by a covered person.

The practical test: supervision and regulation

The definition turns on whether the institution is subject to BSP supervision or regulation, or is a subsidiary or affiliate that is itself a covered person. A business that falls within any of the enumerated categories — or that operates under a special law placing it under BSP authority — should treat itself as a covered person and register with the AMLC.

If a covered person's branch, office, subsidiary, or affiliate based outside the Philippines is prohibited from implementing the AML rules by reason of local laws, regulations, or a supervisory directive, the entity must formally notify the Bangko Sentral of the situation, furnish a copy of the applicable laws or the supervising authority's directive, and apply appropriate additional measures or mitigating controls to manage money laundering and terrorist financing risks.

What registration brings with it

Registration is only the starting point. Covered persons are required to develop sound risk management systems, adopt a Money Laundering and Terrorist Financing Prevention Program (MLPP), and put in place monitoring and reporting tools. Under Circular No. 950, all covered persons must prepare and have available for inspection an updated MLPP approved by the board of directors, and each MLPP must be regularly updated at least once every two (2) years.

Covered persons must also conduct customer due diligence, which includes identifying the customer and verifying identity based on official documents, identifying the beneficial owner, understanding the purpose of the business relationship, and conducting ongoing due diligence. Certain thresholds trigger these duties: a covered transaction refers to a transaction in cash or other equivalent monetary instrument exceeding five hundred thousand pesos (P500,000), while a suspicious transaction is one where any of the listed circumstances exists, regardless of the amount involved.

How to approach registration

1. Determine whether the business falls within the enumerated categories of covered persons or is a subsidiary or affiliate that is itself a covered person.
2. Confirm the supervising authority and the applicable AML regulations — for BSP-supervised institutions, Part Eight of the Manual of Regulations for Banks or the Manual of Regulations for Non-Bank Financial Institutions, as amended by Circular No. 950.
3. Prepare and adopt a written MLPP approved by the board of directors, covering suspicious transaction reporting, training, record retention, and compliance officer designation.
4. Register with the AMLC and establish the reporting chain for covered and suspicious transactions.
5. Keep the MLPP updated at least once every two years and correct deficiencies noted in audits or examinations.

Frequently asked questions

Is a pawnshop a covered person under the AMLA? Yes. Pawnshops are expressly listed among covered persons under the BSP's Anti-Money Laundering Regulations.

Does a subsidiary of a bank need to register separately? The rules state that subsidiaries and affiliates of covered persons are themselves covered persons, wherever they may be located. A subsidiary is an entity more than fifty percent of whose outstanding voting stock is owned by a covered person.

What is a covered transaction? It refers to a transaction in cash or other equivalent monetary instrument exceeding five hundred thousand pesos (P500,000).

Practical takeaways

• Covered persons include banks, non-banks, QBs, trust entities, non-stock savings and loan associations, pawnshops, foreign exchange dealers, money changers, remittance and transfer companies, and electronic money issuers.
• Subsidiaries and affiliates that are themselves covered persons are covered, wherever located.
• Registration carries continuing duties: an MLPP approved by the board, customer due diligence, and transaction reporting.
• The MLPP must be updated at least once every two years.
• A covered transaction exceeds P500,000; a suspicious transaction may be reportable regardless of amount.

Primary sources

The rules discussed above are drawn from the following primary sources. Where the firm's library holds the document as a PDF it is embedded here in full; the rest are cited by title.

Amendments to Part Eight or the Anti-Money Laundering Regulations of the Manual of Regulations for Banks and Manual of Regulations for Non-Bank Financial InstitutionsOpen in Law LibraryDownload PDF

• IRR of REPUBLIC ACT NO. 11930 - THE IMPLEMENTING RULES AND REGULATIONS OF REPUBLIC ACT NO. 11930, OR AN ACT PUNISHING ONLINE SEXUAL ABUSE OR EXPLOITATION OF CHILDREN, PENALIZING THE PRODUCTION, DISTRIBUTION, POSSESSION AND ACCESS OF CHILD SEXUAL ABUSE OR EXPLOITATION MATERIALS, AMENDING REPUBLIC ACT NO. 9160, OTHERWISE KNOWN AS THE "ANTI-MONEY LAUNDERING ACT OF 2001", AS AMENDED AND REPEALING REPUBLIC ACT NO. 9775, OTHERWISE KNOWN AS THE "ANTI-CHILD PORNOGRAPHY ACT OF 2009"

This article is general information and not legal advice. For your specific situation, consult a lawyer or ask ASG Legal AI.