Anti-Money Laundering Council (AMLC) Procedural Issuance - Rules of Procedure in Administrative Cases under Republic Act (R.A.) No. 9160 or the Anti-Money Laundering Act (AMLA), as Amended, and its implementing Rules and Regulations (IRR)

BANoKo SeNrnnL No PlulprNAs OFFICE OF THE DEPUW GOVERNOR FINANCIAL SU PERVISION SECTOR crRcurAR TETTER NO. Cr-2019-026 To : AIIBSP-SupervisedFinanciallnstitutions Subject : Anti-Money laundering Council (AMLC) Procedural lssuance - Rules of Procedure in Administrative Cases under Republic Act (R.A.l No. 9160 or the Anti-Money Laundering Act (AMLA), as Amended, and its lmplementing Rules and Regulations (lRRl This is to disseminate the AMLC's Rules of Procedure in Administrative Cases (RPAC) under the AMLA, as amended, and its tRR, and Guidelines and other lssuances of the AMLC, and the lmposition of Administrative Sanction, dated 26 July 2019 (copy attached). The RPAC covers administrative cases against covered persons (CPs) and/or their directors, officers, and employees, for violations of the AMLA, as amended, and its lRR, and guidelines and issuances of the AMLC, committed from the date of effectivity of R.A. 10365, or 7 March 2013. The RPAC shall have a retroactive effect unless prejudicial to the respondent. t supersedes AMLC Resolution No. 45 dated 24 May 2OL7, also known as the "Rules f on lmposition of Administrative Sanctions". For information and guidance. G. FONACIER Att.; A/S f Octobe r 2OL9 A. Mat)irli S,t., Millatr) 1.004 Manila, PIilifrpines;, {6:}]} 70[i77{)1.. www.bsp.136v.p[ ' bspntail(r1brp.gov.ph

AMLC PROCEDURAL TSSUANCE (APr) A" B and C, No. 1 Series ofZOL9 Subject: Rules of Procedure in Administrative Cases under Republic Act No. 9160 or the Anti-Money Laundering Act of 2001, as Amended, and its Implementing Rules and Regulations, and Guidelines and Other lssuances of the Anti-Money Laundering Council, and the Imposition of Administrative Sanctions Pursuant to the authority vested upon the Anti-Money Laundering council (AMLC) under sections 7(7), zgt) and 14(f) of Republic Act (RAJ No. 9160 or the Anti-Money Laundering Act of 2001, as amended [AMLA), the Rules of Procedure in Administrative Cases under Republic Act No. 9760, as Amended, and its Implementing Rules and Regulations, and Guidelines and Other Issuances of the Anti-Money Laundering Council, and the Imposition of Administrative sanctions, are hereby promulgated: RULE I GENERAT PROVISIONS Section 1. Title. - These Rules shall be known as the Rules of Procedure on Administrative Cases under Republic Act No, 9760 or the Anti-Iuloney Laundering Act of 2007, as Amended, and its Implementing Rules and Regulations, and Guidelines and other Issuances of the Anti-Money Laundering Council. Section 2. Declaration of Policy. - It is the declared policy of the State to protect and preserve the integrity and confidentiality of U"nt accounts, and to ensure that the Philippines shall not be used as a money laundering and terrorism financing site for the proceeds of any unlawful activity. Consistent thereto, the State shall ensure compliance by covered p.rconr with the AMLA, its Implementing Rules and Regulations tlRR) and all issuances of the Anti-Money Laundering Council [AMLC). Section 3. Applicability. - These Rules shall apply to administrative cases under the AMLA, and its IR& and guidelines and other issuances of the AMLC, committed from the date of effectivity of RA No. 10365 or 0T March , 2073.

Section 4. Nature of Proceedings. - The proceedings under these Rules shall be summary in nature, and shall be conducted without necessarily adhering to the technical rules of procedures and evidence applicable to judicial trials. In the absence of applicable provision in these Rules, and pursuant to the summary nature of these proceedings, the pertinent provisions of the Rules of Court may be applied suppletorily. Section 5. Repealing Clause. The Rules on the Imposition of Administrative Sanctions under Republic Act No. 9760, as Amended (RIAS), are hereby repealed. Section 6. Separability Clause. - If any part or provision of these Rules is declared invalid or unconstitutional, other provisions not affected thereby shall remain in force and effecl Section 7. Definition of Terms. - For purposes of these Rules, the following definitions are hereby adopted: [a) Administrative Sanction. - refers to the action taken by the AMLC involving a respondent found to have committed a violation. It may include penalty and non-penalty measures, such as assessment, reprimand, warning, or such other measures as may be necessary and justified to prevent and counteract money laundering and terrorism financing. (b) Assessment - refers to the monetary penalty imposed under Rule IV of these Rules. (c) Covered Person. - refers to persons and entities referred to as such under the AMLA and its amendments. (1) Persons supervised and/or regulated by the Bangko Sentral ng Pilipinas IBSPJ, including their subsidiaries and afifiliates, which are also covered persons, supervised and/or regulated by the BSP such as: [a) Banks; (bl Quasi-banks; (c) Trust entities td) Pawnshops; (e) Non-stock savings and loan associations;

t0 Other non-bank financial institutions, which under special laws are subject to BSP supervision and/or regulation; (g) Electronic money issuers; and (h) Foreign exchange dealers, money changers, and remittance and transfer companies. (2) Persons supervised or regulated by the Insurance Commission (lC), such as: (a) Insurancecompanies; (bl Pre-needcompanies; (cJ Insurance agents; (d) Insurance brokers; (eJ Professionalreinsurers; (0 Reinsurancebrokers; tgl Holding companies; (h) Holding company systems; (i) Mutual benefit associations; and 0l All other persons and their subsidiaries and affiliates supervised or regulated by the IC. (3) Persons supervised or regulated by the Securities and Exchange Commission (SEC), such as: (aJ Securities dealers, brokers, salesmen, investment houses, and other similar persons managing securities or rendering services, such as investment agents, advisors, or consultants; (b) Mutual funds or open-end investment companies, close-end investment companies or issuers, and other similar entities; and [c) Other entities, administering or otherwise dealing in commodities, or financial derivatives based thereon, valuable objects, cash substitutes, and other similar monetary instruments or properties, supervised or regulated by the SEC. (4) The following Designated Non-Financial Businesses and Professions (DNFBPs): (a) fewelry dealers. (b) Dealers in precious metals, and dealers in precious stones. (c) Company service providers, which, as a business, provide any of the following services to third parties:

(i) Acting as a formation agent of juridical persons; (ii) Acting as for arranging for another person to act as) a director or corporate secretary of a company, a partner of a partnership, or a similar position in relation to other juridical persons; (iiiJ Providing a registered office; business address or accommodation, correspondence or administrative address for a company, a partnership or any other juridical person or legal arrangement; and (iv) Acting as for arranging for another person to act as) a nominee shareholder for another person. (d) Persons, including lawyers, accountants and other professionals, who provide any of the following seryices: (i) Managing of client money, securities or other assets; (ii) Management of bank, savings, securities or other assets; (iiiJ organization of contributions for the creation, operation or management of companies; and (ivJ Creation, operation or management of juridical persons or arrangements, and buying and selling business entities. (51 casinos, including internet-based casinos and ship-based casinos, with respect to their casino cash transactions related to their gaming operations. (d) Formal charge. - refers to the initiation of an administrative case upon a finding by the Litigation and Evaluation Group of the AMLC secretariat of the existence of a prima facie."ru. (eJ Prima Facie case. - refers to an administrative case as herein provided, based on evidence as may be sufficient to establish a given fact, or the group or chain of facts constituting the basis of a Formal charge, and which, if not rebutted or contradicted, will sustain the imposition of administrative sanctions against the respondent. (0 Report of compliance (Roc). - refers to the findings of the compliance and superuision Group of the AMLC secretariat relative to the compliance issues discovered in the (iJ course of a money laundering and terrorism financing investigation

and prosecution; (ii) exercise of its compliance checking functions; or [iii) evaluation of findings of the supervising authorities. (g) Reprimand. - refers to a sanction of formal censure. (h) Respondent - refers to the covered person, its director, partners, proprietor, officer or employee, who is the subject of a formal charge. ti) Restoration. - refers to the restitution of the value of a monetary instrument or property that was released in violation of a freeze order, provisional asset preservation order or asset preservation order. 0) substantial Evidence. - refers to that quantum of proof which a reasonable mind might accept as adequate to justiff that a specific violation was committed. tk) violation, - refers to non-compliance with any provision of the AMLA, its IRR and all AMLC issuances. A violation is committed either on a 'per order/resolution,, .per account,, 'per transaction', 'per customer', 'per examination, or ,daily, basis. One violation shall be considered as one counl 0l warning. - refers to the AMLC's action that effectively puts the respondent on guard against the consequence of impending or future violations. RULE II PROCEDURE Section 1. Administrative Investigation: How tnitiated. - Administrative investigation may be initiated upon referral of the ROC to the Litigation and Evaluation Group [LEG) of the AMLC Secretariat. section 2. Preliminary Administrative Investigation. - upon receipt of the ROC, the LEG shall conduct a fact-finding investigation, which involves an ex-parte evaluation of documents, to determine whether a prima facie case exists to warrant the filing of a Formal Charge. In the absence of aprimafacie case, the LEG shall noti$rthe Compliance and supervision Group [csc) of the AMLC secretariat accordingly.

Section 3. Formal Charge. - (aJ Upon determination of the existence of a prima facie case, the LEG shall file a Formal Charge before the Adjudication and Enforcement Unit (AEU) against the respondent. The Formal Charge shall contain the following: t1) Name and address of responden! (2) Specific violation of laws, rules and regulations; t3) Date or period when the violation is committed; t4) Statement of Facts; (5) Statement of Attendant Circumstances; (5) Statement of Findings; (7) Statement that a prima facie case exists for a specific violation; and t8l Relevantdocuments. (b) At any time prior to the actual receipt of the respondent's Answer, the Formal Charge may be withdrawn, without prejudice to the re-filing of the Formal Charge within a reasonable period of time, both as a matter of right, or on the following grounds: (1) Additional or newly-discovered evidence which could not have been discovered and/or produced at the time of filing of the Formal Charge; and (2) Amendment of the ROC, requiring substantial amendments to the Formal Charge. (c) After actual receipt of the Answer, the LEG may withdraw the Formal Charge, for good cause shown, without prejudice to the re-filing of the Formal Charge, which shall be done within a reasonable period of time. (d) In both instances under [b) and [c), the respondent shall be given ten (10) working days to file its Answer to the re-filed Formal Charge. Once the answer has been filed and revised by the responden! all the parties involved should be accordingly furnished with all motions and resolutions. [e) At anytime before the submission of the case for Resolution, the respondent upon motion, may propose to the AMLC payment of the assessmenl The AMLC, upon good cause shown by the

respondent, may grant the proposal, which shall have the effect of striking out the case against the respondent, as if no case was filed. Section 4. Modes of Service. - Service of notices, orders, resolutions or pleadings and motions shall be by way of personal delivery, courier service or registered mail. In case the whereabouts of the respondents cannot be reasonably determined, service of orders or notices shall be by a publication in a newspaper of general circulation. In case of filing by registered mail, the pleading or motion shall be deemed filed on the date shown by the postmark on the envelope. In case of filing using other modes, it shall be deemed filed on the date stamped "Received" by the AMLC Secretariat. Section 5. Notice of Formal Charge. - The AEU shall noti$/ the respondent of the filing of Formal Charge in the manner stated in the immediately preceding section. Section 6. Prohibited Pleadings. - No motions or requests for clarification, bills of particulars, dismissal, quashal, or reconsideration on the filing of the Formal Charge and other interlocutory orders shall be entertained. Section 7. Answer. - The Answer shall be in writing under oath, indicate the date of receipt of the Notice, and contain all material facts and certified true copies of supporting evidence. Non-compliance with these requirements shall render the Answer insufficient in form and substance. The Answer shall be filed with the AEU within ten [10) working days from receipt of the Notice of Formal Charge. Upon motion filed prior to the expiration of the period to file Answer, and for good cause shown, an extension of time to file Answer maybe granted for a non-extendible period of ten [10) working days reckoned from the expiration of the original ten (10) working days. If the respondent fails to file the Answer within the prescribed period, files an Answer that is insufficient in form and substance, or files any document other than an Answer, the respondent shall be considered to have waived the right to file an Answer, and the case shall be submitted for resolution based on available records. Section 8. Clarificatory Meeting. - The AEU may, at its discretion, call the parties to a clarificatory meeting, concerning the facts, evidence, issues and other relevant maffers. PageT of2l

section 9. Disposition of the Case. - After giving all the parties the opportunity to be heard, the AEU shall, based on the evidence, recommend to the AMLC the imposition of appropriate administrative sanctions or to the Executive Director of the AMLC secretariat or, in his absence, the Officer-in-Charge, the dismissal of the Formal Charge. Section 10. Resolution. - Upon finding of substantial evidence that the respondent committed violations as charged, the AMLC shall issue a Resolution imposing such administrative sanctions as may be proper, setting forth the factual and legal basis thereof. In case of dismissai of the Formal Charge, the Executive Director of the AMLC Secretariat or, in his absence, the officer-in-charge, shall issue the Resolution. section 11. Motion for Reconsideration. - The respondent may file a motion for reconsideration of the AMLC Resolution within ten [10) working days from receipt thereof. No second, or extension of time to file, motion for reconsideration shall be allowed. The filing of a motion for reconsideration shall stay the execution of the Resolution sought to be reconsidered. Section 12. Grounds. - The motion for reconsideration shall be based on any of the following grounds: [aJ Newly-discovered evidence which could not have been discovered and produced at the time the respondent filed its Answer, and which if presented, would materially affect the Resolution rendered; (b) substantial mistake in the appreciation of evidence; or (c) Erroneous computation of assessmenl Section 13. Finality of the Resolution. - The Resolution shall immediately become final and executory if no motion for reconsideration is filed within the prescribed period. Section 14. Notice of Execution. - If the Resolution involves the payment of assessment and restoration, if applicable, the AEU shall issue a ilotice of Execution directing the respondent to make payment and restoration, if applicable, within ten (10) working days from ieieipt thereof.

Payment of assessments shall be in the form of Manager's Check payable to the account of the "Anti-Money Laundering Council", or through direct debit to the Demand Deposit Account, at the option of the respondents in cases of restoration, the respondent shall submit a proof of its compliance within the same period. Section 15. Surcharge. - A surcharge equivalent to six percent (60/o) per annum of the outstanding assessment shall be imposed upon the respondent for its failure to pay the assessment within the prescribed period. RULE III ATTENDANT CIRCUMSTANCES Section l. Attendant Circumstances. The following attendant circumstances shall be considered in determining the imposition of appropriate administrative sanctions for a specific violation: [a) Asset Size. - the financial capability of respondents to comply with the requirements of the AMLA, its IRR and all AMLC issuances in relation to: (1) the money laundering and terrorism financing risks the respondents face or their financial capability poses; or [2) the respondents'impact on public interesl For juridical persons, the total assets, as indicated in the audited financial statement or its equivalent, as of the year the violation was committed, shall be the basis for determining the asset size. In case of nafural persons, asset size shall be the gross income as indicated in the income tax return for the year the violation was committed. For this purpose, respondents shall be classified as follows: (1) Micro - Php10,000,000.00 and below [2) Small - Php10,000,000.01to Php100,000,000.00 [3) Medium -Php100,000,000.01to Php1,000,000,000.00 (4) LargeA -Php1,000,000,000.01toPhp50,000,000,000.00 (5J Large B - Php50,000,000,000.01and above tb) Gravity of Violations. - The gravity of violations refers to the importance or significance of the specific provision of the AMLA, its IRR and all AMLC directives and issuances, in relation to its effect on the AMLC's discharge of its mandate. It shall take into account all relevant facts and circumstances.

For this purpose, violations shall be classified by gravity as Grave, Major, serious, Less Serious, and Light as provided in Table A, Section 2, Rule IV of these Rules. Non-compliance with covered transaction reporting requirements shall be governed by separate matrix as provided in Table B, Section 2, Rule IV of these Rules. [c) Aggravating circumstances. - These refer to circumstances or conditions relating to the commission of an act that increase the liability of the respondent. These include the following: (1) History of Non-compliance. - violations of a similar nature for which a respondent has been previously sanctioned within the two (2)-year period immediately preceding the examination or investigation under consideration, shall be considered as an aggravating circumstance. For purposes hereof, the nature of violations shall be classified as follows: (aJ Customer Due Diligence; (bl Record Keeping; (c) TransactionReporting; (d) Compliance on freeze, bank inquiry and asset preservation orders; and orders relating to AMLC investigation; (eJ Money Laundering and Terrorism Financing prevention Program; and (0 violations of orders, resolutions and other issuances of the AMLC. (2) concealment or Deliberate Effort to Hide the violation. The deliberate effort to hide the violation with the intention - to deceive shall be considered as an aggravating circumstance. concealment is presumed in cases where the officers or employees of the respondent complicate the transaction to make it difficult to uncover, whichmay also include refusal to provide information/documents that would support a finding of liability, or employment of any other means to cover up any violation. (31 Material Misrepresentation. - The act of misstating a fact, knowing or believing that: [i) what he is saying is not true or

(ii) is not sure whether or not his statement is true, but passes it off as true anyway; and is likely to induce a reasonable person to assent or that the maker knows is likely to induce the recipient to assent, is an aggravating circumstance. (d) Mitigating Circumstances. These are conditions or circumstances attendant in the commission of the offense and may serve to lessen the degree of liability of the respondent These include the following: (1) Voluntary Disclosure. - Voluntary disclosure by the respondent of the offense or violation committed before its discovery by the CSG or the Supervising Authorities or Appropriate Government Agencies shall be considered a miti g ating circumstance. (2) Corrective Measures. - Actions taken by respondents to correct the findings of the CSG or Supervising Authorities prior to the referral of the ROC to the LEG shall be considered a mitig ating circumstance. (3) AML Rating. - An AML Rating of 3 or 4 shall be considered a mitig ating circumstance. (4) Such other circumstances that are proven to be beyond the control of the covered person shall be considered mitigating. RUIE IV ADMINISTRATIVE SANCTIONS AND WARNINGS Section 1. Administrative Sanctions and Warnings. - The AMLC shall, where the circumstances warran! impose administrative sanctions and warnings as provided herein upon any respondent for the violation of the AMLA and its IRR, or for failure or refusal to comply with the orders, resolutions and other issuances of the AMLC. Assessments shall be in amounts as may be determined by the AMLC to be appropriate, which shall not be more than Five Hundred Thousand Pesos (Php500,000.00) per violation. In no case shall the aggregate assessment exceed five percent (57o) of the asset size of the respondent based on its audited financial statements as of the year of the compliance testing covered bythe sampled data. If the violations were committed over several years, as of the last year of violation covered by the sampled data during the

compliance testing. Otherwise, the audited financial statements as used of the supervising authorities shall be the basis of the respondent's asset size. section 2. Table of violations and corresponding sanctions. - The following are the specific violations and their corresponding sanctions: A. The following are the specific violations and their corresponding sanctions based on the entity size and gravity of violations: TABLE A: A. GRAVE VIOLATION Administrative Sanctions P25,000 per P62,500 per P125,000 per P187,500 per P250,000 Per violation, but violation, but violation, but violation, but violation, but not exceeding not exceeding not exceeding not exceeding not exceeding Fl Million F2.5 Million P5 Million P7.5 Million P10 Million P37,500 per P93,750 per P187,500 per P281,250 per P375,000 per violation, but violation, but violation, but violation, but violation, but not exceeding not exceeding not exceeding not exceeding not exceeding P1.5 Million ?3.75 Million P7.5 Million Pll Million P15 Million P50,000 per P125,000 per F250,000 per P375,000 per P500,000 per violation, but violation, but violation, but violation, but violation, but not exceeding not exceeding not exceeding not exceeding not exceeding P2 Million P5 Million P10 Million P15 Million P20 Million Non-compliance with the requirement to Assessment is on per Resolution (FO) or Order immediately freeze, upon receipt of the IPAPO, APO) basis, plus restoration, whenever notice ofthe Freeze Order [FO), applicable. Provisional Asset Preservation Order (PAPO), and Asset Preservation Order (APO), the monetary instrument or property identified in the FO, and related accounts, the PAPO and the ApO. Lifting the effects of the FO, pApO, ana/or Assessment is on a per account Uasis, ptus APO during its effectivity. restoration, whenever applicable. Non-compliance with the requirement to Assessment is on a per account basis. immediately give the AMLC and/or its Secretariat full access to all information, documents or objects pertaining to the deposit investment, account, transaction, and/or person subject of inquiry or investigation. Non-compliance with the Guidelines on Assessment is on a per customer basis Digitization of Customer Records. B. MAIOR VIOLATTON Administrative Sanctions

Micro Small Medium Larse A Laree B P15,000 per F37,500 per P75,000 per P112,500 per P150,000 per violation, but violation, but violation, but violation, but violation, but Minimum not exceeding not exceeding not exceeding not exceeding not exceeding P500 P 1.5 Million P2.5 Million P3.5 Million P5 Million Thousand P22,500 per P56,250 per P112,500 per F168,750 per P225,000 per violation, but violation, but violation, but violation, but violation, but Medium not exceeding not exceeding not exceeding not exceeding not exceeding F750 P2 Million P3.5 Million P5.5 Million P7.5 Million Thousand P30,000 per P75,000 per P150,000 per P225,000 per P300,000 per violation, but violation, but violation, but violation, but violation, but Maximum not exceeding not exceeding not exceeding not exceeding not exceeding Pl Million P2.5 Million ?5 Million P7.5 Million P10 Million L. Non-compliance with the requirement to Assessment is on a per customer basis. obtain all information to establish and record the true identity of each customer and/or the person on whose behalf the transaction is being conducted. 2. Non-compliance with the requirement to Assessment is on a per account basis. retain and safely keep records beyond the five (5)-year period, where the account is the subject of a case, until it is officially confirmed by the AMLC Secretariat that the case has been resolved, decided or terminated with finality. 3. Non-compliance with the requirement to Assessment is on a per account or suspicious repoft to the AMLC suspicious transaction report (STR) basis. transactions. C. SERIOUS VIOLATION Administrative Sanctions Micro Small Medium Laree A Larse B P10,000 per P25,000 per P50,000 per P75,000 per P100,000 per violation, but violation, but violation, but violation, but violation, but Minimum not exceeding not exceeding not exceeding not exceeding not exceeding P100 P250 P500 P750 P1 Million Thousand Thousand Thousand Thousand P15,000 per P37,500 per P75,000 per P112,500 per F150,000 per violation, but violation, but violation, but violation, but violation, but Medium not exceeding not exceeding not exceeding not exceeding not exceeding P250 P750 P1.5 Million P2 Million P2.5 Million Thousand Thousand

P20,000 per | "^.'50'ooo Per violation, but P100,000 per P150,000 per P200,000 per Maximum nof.*.""ain* |' violation, but violation, but violation, but violation, but " "?Tilr:ffjf- not exceeding not exceeding not exceeding Thousand I -,rigo-, I P2.5 Million ?3.75 Million P5 Million 1. Non-compliance with the requirement to Assessment is on a per examination basis. conduct institutional risk assessment 2. Non-compliance with the requirement to Assessment is on a per examination basis formulate a Money Laundering / Terrorism Financing prevention Program (MTPP). 3. Allowing the opening of anon5rmous Assessment is on a per account basis. accounts, accounts under fictitious names, and all other similar accounts. 4. Allowing the opening of checking Assessment is on a per account basis. numbered accounts. 5. Non-compliance with the requirements Assessment is on a per customer basis. on "Customer Verifi cation process.,, 6. Non-compliance with the requirement to Assessment is on a per customer basis. obtain more than three (3) but not all information to establish and record the true identity of each customer and/or the person on whose behalf the transaction is being conducted. 7. Non-compliance with the requirements Assessment is on a per customer or on a per on "ldentification and Verification of account basis, as the case may be. Agents." 8. Non-compliance with the requirements Assessment is on a per account basis. on "Beneficial Ownership Verification.,, 9. Non-compliance with the requirements Assessment is on a per account basis. on "Determination of the purpose of Relationship." 10. Non-compliance with the requirements Assessment is on a per account basis. on "Ongoing Monitoring process.,, 11. Non-compliance with the requirement to Assessment is on a per customer basis. Risk Profile customers.

t2. Non-compliance with the requirements Assessment is on a per customer basis. on "Life Insurance and Other Investment- related Insurance Policies." 13. Non-compliance with the requirements Assessment is on a per customer basis. of the provisions on "Politically-Exposed Persons." L4. Non-compliance with the requirements Assessment is on a per transaction basis. of the provisions on "Correspondent Banking." 15. Non-compliance with the requirements Assessment is on a per examination basis. on "New Technologies." t5. Non-compliance with the requirements Assessment is on a per transaction basis. of the provisions on "Wire Transfers", including the requirements on "Money or Value Transfer Services Provider" and "lmplementation of Targeted Financial Sanctions." 17. Non-compliance with the requirements Assessment is on a per transaction basis. of the provisions on "Shell Banh Shell Company and Bearer Share Entity." 18. Non-compliance with the requirements Assessment is on a per customer basis. of the provisions on "High-Risk f urisdiction or Geographical Location." t9. Non-compliance with the requirements Assessment is on a per examination basis. of the provisions on Foreign Branches and Subsidiaries. 20. Non-compliance with the requirement to Assessment is on a per examination basis. establish a transaction monitoring system. 2L. Non-compliance with the requirement to Assessment is on a per account basis. maintain and safely store for five (5) years from the dates of transactions, or from dates the accounts were closed, all records of transactions, including customer identifi cation documents. 22. Non-compliance with the requirement to Assessment is on a per examination basis. register with the AMLC's electronic reporting system within the prescribed period.

23. Non-compliance with the requirement to Assessment is on a per account basis, plus secure a written confirmation from the restoration in cases where there is civil AMLC before the expiration of the freeze forfeiture or money laundering case filed and order. the monetary instruments were withdrawn, transferred or dissipated. 24. Non-compliance with the requirement to Assessment is on a per account basis. submit certified true copies of the documents pertaining to deposi! investment, accoun! transaction, and/or person subject of inquiry or investigation, within five [5) working days from receipt of the court order or AMLC Resolution. 25. All other violations of orders, resolutions Assessment is on a per resolution, rule, and other issuances of the AMLC. regulation, circular, order and guideline basis. D. LESS SERIOUS VIOTATION Administrative Sanctions Micro Small Medium Laree A Large B P12,500 per P25,000 per P50,000 F5,000 per P37,500 per violation, but per violation, violation, but violation, but violation, but Minimum not exceeding not exceeding but not not exceeding not exceeding P125 exceeding P50 Thousand P250 7375 Thousand Thousand P500 Thousand Thousand P18,750 per P37,500 per P75,000 P7,500 per P55,250 per violation, but yiolation, but per violation, violation, but violation, but Medium not exceeding not exceeding not exceeding but not not exceeding exceeding P200 P375 P550 P75 Thousand P750 Thousand Thousand Thousand Thousand P10,000 per P25,000 per P50,000 per P75,000 per violation, but violation, but violation, but P100,000 per violation, but Maximum not exceeding not exceeding not exceeding violation, but not exceeding P100 P250 P500 not exceeding P750 Thousand Thousand Thousand Thousand Pl Million t. Non-compliance with the other Assessment is on a per examination basis. requirements on the contents of the MTPP finsufficient Contents). Where the basis of the Major and Serious violations are absence of MTPP provisions, in such case, the penalty under such violations will apply 2. Non-compliance with the requirement on Assessment is on a per examination basis. "Continuing Education and Training Program."

Non-compliance with less than three (3) Assessment is on a per account basis. of the required information to establish and record the true identity of each customer and/or the person on whose behalf the transaction is being conducted. Non-compliance with the requirement to Assessment is on a per account basis. obtain at least three (3) criteria for risk profiling fDeficient Risk profiling Mechanism). Non-compliance with the requirement to Assessment is on a per transaction basis. indicate the true name of the account holder in covered transaction reports (CTRs) and STRs involving non-checking numbered accounts. Non-compliance with the requirement on Assessment is on a per transaction basis. the accuracy and completeness of covered and suspicious transactions reports. Non-compliance with the requirement to Assessment is on a per Resolution (FO) basis. submit to the AMLC within twenty-four (24) hours from receipt of the freeze order a detailed written return on the accounts subject ofthe freeze order. For related accounts, the twenty-four (24) hours shall be reckoned from the determination thereof. E. LIGHT VIOLATION Administrative Sanctions P2,500 per P12,500 per P18,750 per P25,000 per P6,250 per violation, but violation, but violation, but violation, but Minimum violation, but not exceeding not exceeding not exceeding not exceeding not exceeding P25 Thousand P50 Thousand ?L25 P150 P250 Thousand Thousand Thousand P3,750 per P9,375 per P18,750 per ?28,L25 per P37,500 per violation, but violation, but violation, but violation, but violation, but Medium not exceeding not exceeding not exceeding not exceeding not exceeding P37.5 P100 P150 P250 P375 Thousand Thousand Thousand Thousand Thousand F5,000 per P12,500 per P25,000 per P37,500 per P50,000 per violation, but not exceeding violation, but violation, but violation, but violation, but P50 Thousand not exceeding not exceeding not exceeding not exceeding

?t25 P250 F350 P500 Thousand Thousand Thousand Thousand 1. Non-compliance with the requirement to Assessment is on a per account basis submit complete information on the detailed return on the FO. 2. Non-compliance with the requirement to Assessment is on per Resolution (Freeze Order) submit to the AMLC an electronic basis. detailed return of the FO in a format prescribed by the latter. 3. Non-compliance with the requirement to Assessment is on a per violation basis. keep electronic copies of all CTRs or STRs for, at least, five (5) years from the dates of submission to the AMLC. A. Assessments involving non-compliance with submission of CTRs within the required period shall be as follows: TABLE B: A. MA|OR Administrative Sanctions VIOIIITIONS: Micro Small Medium Laree A Larse B Non- P3,750.00 P11,250.00 P1,500.00 P7,500.00 P15,000.00 compliance per CT, per CT, but per CT, per CT, but per CT, but with the Minimum but not but not not not not covered exceeding exceeding exceeding exceeding exceeding transaction 72.5 ?7.5 ?1 Million P5 Million P10 Million reporting Million Million requirement P2,250.00 P5,625.00 representing P11,250.00 P16,875.00 P22,500.00 per CT, per CT, per CT, but per CT, but per CT, but more than Medium but not but not 2So/o of the not not not exceeding exceeding total exceeding exceeding exceeding P1.5 P3.75 P7.5 Million P11 Million P15 Million sampled Million Million population P3,000.00 P7,500.00 P5,000.00 F22,500.00 P30,000.00 of CTRS per CT, per CT, per CT, but per CT, but per CT, but within the Maximum but not but not not not not examination exceeding exceeding exceeding exceeding exceeding period P2 Million P5 Million P10 Million P15 Million P20 Million B. SERTOUS Administrative Sanctions VIOUTTIONS: Micro Small Medium Large A Large B P1,000.00 P2,500.00 P7,500.00 Non- P5,000.00 P10,000.00 per CT, per CT, per CT, but compliance per CT, but per CT, but Minimum but not but not not with the exceeding exceeding not exceeding not covered exceeding exceeding P500 ?L.25 73.75 transaction P2.5 Million P5 Million Thousand Million Million

reporting P1,500.00 P3,750.00 F7,500.00 F11,250.00 P15,000.00 requirement per CT, per CT, per CT, but per CT, but per CT, but representing but not but not not not not Medium more than exceeding exceeding exceeding exceeding exceeding 5o/o but not P750 P1.875 P3.75 P5.5 P7.5 Million more than Thousand Million Million Million 25o/o of the total P5,000.00 P10,000.00 P20,000.00 P2,000.00 P15,000.00 sampled per CT, per CT, but per CT, but per CT, but per CT, but population Maximum but not not not not not of CTRs filed exceeding exceeding exceeding exceeding exceeding ?2.5 within the P1 Million Million P5 Million P7.5 Million P10 Million examination period. c. LESS Administrative Sanctions SERIOUS Micro Small Medium Large A Large B VIOUTTIONS: P500.00 P1,250.00 P2,500.00 P3,750.00 P5,000.00 Non- per CT, per CT, per CT, but per CT, but per CT, but compliance Minimum but not but not not not not with the exceeding exceeding exceeding exceeding exceeding covered P100 P250 F500 F750 Pl Million Thousand Thousand Thousand Thousand transaction P750.00 P1,875.00 P3,750.00 P5,625.00 P7,500.00 reporting per CT, per CT, per CT, but per CT, but per CT, but representing not not Medium but not but not not 5o/o or less of exceeding exceeding exceeding exceeding exceeding the total P250 ?525 P1.25 P1.875 P2.5 Million sampled Thousand Thousand Million Million population P1,000.00 P2,500.00 P7,500.00 P5,000.00 P10,000.00 of CTRs filed per CT, per CT, per CT, but per CT, but per CT, but within the Maximum but not but not not not not examination exceeding exceeding exceeding exceeding exceeding period. P500 P1.250 P2.5 Million P3.750 P5 Million Thousand Million Million Section 3. Determination of the Amount of Assessment - [a) In determining the amount of the assessment, a three [3)-stage assessment shall be conducted as follows: Step 1: Determine the nature of offense, whether: [a) Grave; (b) Major; [c) Serious; [d) Less Serious or (e) LightViolation; Step 2: Page 19 of21

Determine the classification of respondent as to asset size, whether: [a) Micro; (b) Small; (c) Medium; [d) Large A or (e) Large B; and Step 3: Determine the presence of aggravating and/or mitigating circumstances, as listed under section 1 of Rule III hereof. tb) The minimum penalty must be imposed if the mitigating circumstances outweigh the aggravating circumstances. On the other hand, maximum penalty must be imposed if the aggravating circumstances outweigh the mitigating circumstances. In the absence of mitigating or aggravating circumstances, the medium penalty must be imposed. (c) Both the aggravating and mitigating factors shall be considered for initial penalty imposition and subsequent request for reconsideration. section 4. warnings and Non-monetary sanctions. The AMLC may - impose against the respondent warnings or non-monetary sanctions that may include, but are not limited to, any, or a combination of the following: (aJ Warning that future infractions or other acts of a similar nature shall be dealt with more sternly; (bl Reprimand of the respondent, with directive to correct the deficiencies within a reasonable period of time; (cJ submission ol a compliance commitment signed by the respondent indicating the specific timelines of conciet. -.irur., to correct the respondent's deficiencies, and of regular reporting of updates on said corrective measures; tdl Revocation of the certificate of registration issued by the AMLC; [e) Referral of the administrative Resolution to the appropriate supervising Authority or Appropriate Government Agenry for appropriate action; and t0 Publication of the administrative Resolution involving (assessment) grave or major violations or repeat significant non_ compliance. Page 2O of 21

section 5. Dispensing of tmposition of Monetary sanctions. - The AMLC may dispense with the imposition of monetary sanctions in the following cases: [a) Where a light violation was committed, provided that corrective action was immediately taken after its affention was called by the CSG or Supervising Authorities; (b) Where a less serious violation was committed, provided that the case refers to a first-time violation and the respondent took corrective action within a reasonable time after its affention was called by the CSG or Supervising Authorities; (c) Where a serious or major violation was committed, provided that the case refers to a first-time violation and the respondent took corrective action within a reasonable time after its attention was called by the CSG or Supervising Authorities, and there is no aggravating circumstance. In the foregoing cases, a reprimand, or warning that another violation shall be sternly dealt with, or both, may be imposed; and (d) The AMLC may suspend any imposition of monetary sanctions and instead, impose a warning or any of the non-monetary sanctions or a combination thereof. Section 6. Retroactive Effect - This Issuance shall have retroactive effect unless prejudicial to the respondent. Section 7. Effectivity. - This Issuance shall take effect immediately upon publication in a newspaper of general circulation. FOR THE AMLC: [original signed) MEL GEORGIE B. RACELA Executive Director Anti-Money Laundering Council Secretariat 26luly 20L9