The Anti-Money Laundering Act (AMLA) and Corporate Treasurers: When Failure to Report Suspicious Deposits Can Trigger Money Laundering Exposure

Introduction: Why corporate treasurers are now part of the AMLA risk picture

Corporate treasurers and finance officers routinely receive, move, and disburse company funds. Under the Anti-Money Laundering Act of 2001 (Republic Act No. 9160, 2001), as amended by Republic Act No. 9194 (2003) and Republic Act No. 10365 (2013), certain deposits and patterns of deposits are legally significant because they can qualify as covered transactions or suspicious transactions. When these are ignored, structured, or intentionally facilitated, the consequences can extend beyond regulatory compliance and reach criminal exposure for individuals involved in handling the funds.

This article explains (1) what covered and suspicious transactions are, (2) why “non-reporting” is more than an internal compliance lapse, and (3) how a treasurer’s acts or omissions may be used to establish knowledge or participation in money laundering—especially in “money muling” scenarios using corporate accounts.

Governing laws and main institutional actors

Republic Act No. 9160 (2001), as amended, is the primary statute penalizing money laundering and establishing the AMLC’s mandate to receive transaction reports and investigate financial flows. It is strengthened by Republic Act No. 9194 (2003) (which broadened reporting and introduced suspicious transactions) and Republic Act No. 10365 (2013)(which further refined reporting rules and privileges, and expanded covered persons).

The AMLA framework functions through three interacting groups:

(1) Covered persons/covered institutions (e.g., banks and other entities covered by AMLA) that must file reports; (2) the Anti-Money Laundering Council (AMLC), which receives reports and investigates; and (3) prosecutors and courts, which handle criminal cases and related proceedings. The Supreme Court has recognized the AMLC’s investigative and disclosure role in litigation settings, particularly when confidentiality objections are improperly invoked. This is illustrated in Republic of the Philippines v. Sandiganbayan (G.R. Nos. 232724-27, 2021).

What is a “money muling” pattern in a corporate setting?

In common compliance usage, “money muling” refers to using a person or entity—sometimes wittingly, sometimes through deception—as a pass-through to receive funds and quickly move them onward to disguise their origin or destination. In corporate environments, this often appears as:

• Unexplained deposits into the company’s account followed by rapid withdrawals or transfers;
• “Layering” deposits (splitting into smaller amounts) made by multiple individuals with no business link to the company;
• Incoming funds labeled as “payments,” “loans,” or “investment” without contracts, invoices, or board approvals;
• Use of corporate accounts as temporary holding accounts for third-party funds without a clear escrow or agency arrangement.

These patterns matter because AMLA does not focus only on the final criminal act. It also targets transactions that make unlawful proceeds appear legitimate.

Covered transactions: what they are and why treasurers should recognize them

A covered transaction is a transaction that meets the reporting threshold under AMLA. The law defines a covered transaction as a single, series, or combination of transactions exceeding the statutory threshold. In Republic of the Philippines v. Sandiganbayan (G.R. Nos. 232724-27, 2021), the Court discussed the covered transaction concept and noted the monetary threshold and examples recognized by the AMLA regime.

Under AMLA’s reporting system, when a covered transaction occurs, the covered institution must report it to the AMLC within the prescribed period. The covered institution and its officers/employees are protected from bank secrecy liability for making the report, but they are bound by strict confidentiality and “no tipping-off” rules.

Suspicious transactions: the higher-risk category regardless of amount

AMLA also requires reporting of suspicious transactions, which are reportable regardless of amount when circumstances suggest illegitimacy or concealment. Republic Act No. 9194 (2003) strengthened this reporting regime by expressly requiring reporting of suspicious transactions and by reinforcing confidentiality and immunity provisions for good-faith reporting.

As summarized in Republic of the Philippines v. Sandiganbayan (G.R. Nos. 232724-27, 2021), suspicious transactions include those where, among others:

• There is no underlying legal or trade obligation, purpose, or economic justification;
• The client is not properly identified;
• The amount is not commensurate with the client’s known business or financial capacity;
• The transaction appears structured to avoid reporting requirements;
• The activity deviates from the customer profile or prior transaction history.

“No tipping-off” and confidentiality: what corporate officers should understand

AMLA contains a strict prohibition against communicating that a covered or suspicious transaction report has been made (or is about to be made), its contents, or related information. This “no tipping-off” rule is enforced through criminal liability for violators. The prohibition is stated in Republic Act No. 9160 (2001) and reiterated and refined through Republic Act No. 9194 (2003) and Republic Act No. 10365 (2013).

For corporate treasurers, the operational implication is that when a bank requests clarifications or enhanced due diligence information (for example, on the basis of suspicious activity), internal coordination must be handled carefully. Treasury should ensure proper documentation and communication lines, but avoid pressuring bank relationship managers to reveal whether a report has been filed or will be filed.

Why non-reporting can be used against individuals: “knowledge” and circumstantial evidence

Corporate treasurers do not file AMLC reports directly unless they are within a covered person that has reporting obligations; reporting is generally performed by the covered institution (such as a bank) or covered persons under AMLA. However, treasurers can still be exposed when their acts indicate participation in disguising the source of funds or when they deliberately enable patterns consistent with laundering.

Philippine doctrine recognizes that knowledge in money laundering can be proven by direct or circumstantial evidence, and that deliberate non-performance of preventive measures can be considered in determining knowledge. This is reflected in the money laundering framework discussed in Lingad v. People (G.R. No. 224945, 2022), which emphasizes that money laundering involves transactions undertaken with knowledge that the funds represent proceeds of unlawful activity, typically to make them appear legitimate.

Money laundering cases may proceed independently from the predicate crime

A frequent misconception is that a treasurer (or company) is safe unless the predicate crime is first proven in a separate case. Philippine law allows money laundering prosecution to proceed independently from prosecution of the associated unlawful activity, while still requiring proof beyond reasonable doubt that the property or money is proceeds of an unlawful activity. This independence is expressly recognized in the framework discussed in Lingad v. People(G.R. No. 224945, 2022).

For risk management, this means treasury cannot treat “no pending case” as a reliable comfort factor when transaction patterns are objectively suspicious.

When a treasurer’s conduct starts to look like “accessory” behavior in money muling

AMLA liability is fact-intensive, but from a compliance and risk standpoint, certain behaviors commonly appear in investigations when corporate accounts are used as mule accounts. Examples include:

• Accepting deposits from unknown third parties with no contracts, invoices, or board authorizations;
• Rapid pass-through transfers to unrelated persons or offshore accounts, especially when directed by someone outside approved corporate signatory structures;
• Structuring deposits to avoid bank thresholds or internal controls;
• Falsifying or backfilling documentation (e.g., creating invoices after the deposit arrives);
• Ignoring red flags raised by bank compliance teams, auditors, or internal control staff.

These scenarios are high-risk because they can be interpreted as steps taken to make proceeds appear to come from legitimate business activity—conduct central to the idea of money laundering as explained by the Supreme Court in Lingad v. People (G.R. No. 224945, 2022).

What covered institutions must do, and what treasurers should expect from their banks

Covered persons are required to report covered and suspicious transactions to the AMLC within the statutory period, and they are prohibited from tipping off. Republic Act No. 10365 (2013) confirms the continuing obligation to report and the confidentiality rule, while also recognizing that lawyers and accountants acting as independent professionals are not required to report when information is protected by professional secrecy or legal professional privilege.

From the corporate treasury side, common bank actions include:

• Requests for supporting documents (contracts, invoices, delivery receipts, board approvals);
• Requests to explain the economic purpose of a transaction;
• Temporary transaction holds or enhanced scrutiny if the pattern matches suspicious indicators.

Treasurers should treat these as compliance events requiring immediate documentation and escalation, not as routine relationship issues.

FOI and disclosure limits: why you usually cannot obtain CTR/STR information

Companies sometimes attempt to confirm whether a covered transaction report or suspicious transaction report exists (for internal investigation or litigation planning). As a general rule, AMLA’s confidentiality and “no tipping-off” structure prevents disclosure of the fact of reporting and the contents of reports. This is also reflected in the executive branch’s recognized exceptions to access to information, where the fact that a report to the AMLC has been made and related information is treated as confidential. This is listed in Department Circular No. 064 (2016), which inventories exceptions to access to information.

Compliance checklist for corporate treasurers: documentation and control steps that reduce exposure

The following internal controls help reduce the likelihood that corporate accounts become mule accounts and help demonstrate good faith if questioned later:

• Source-of-funds documentation for significant deposits (contracts, invoices, board approvals, loan instruments, remittance instructions);
• Counterparty verification for payors and beneficiaries, including beneficial ownership checks for business partners;
• Board-approved treasury policies on third-party deposits, pass-through transactions, and escrow-like arrangements;
• Transaction monitoring rules (frequency, amount, and pattern red flags) coordinated with internal audit;
• Escalation protocol when the bank flags activity or requests enhanced due diligence materials.

Quick reference table: covered vs. suspicious transactions (treasury view)

Item	Covered Transaction	Suspicious Transaction
Amount threshold	Threshold-based (statutory amount)	Reportable regardless of amount when circumstances indicate suspicion
Trigger	Exceeds the threshold as defined by AMLA and related rules	No legal/economic purpose, structured to avoid reporting, deviates from profile, etc.
Who reports	Covered institutions/covered persons to AMLC	Covered institutions/covered persons to AMLC
Treasury risk	Heightened scrutiny; documentation must be ready	Highest risk; patterns may support an inference of knowledge or facilitation

Final observations: treat “unusual deposits” as legal risk, not just accounting noise

AMLA compliance is not limited to banks. Corporate treasurers sit at the operational center of fund movements and are often the first to see red flags. Because money laundering cases can proceed independently of the predicate offense, and because knowledge can be inferred from circumstances, treasurers should assume that unexplained deposits and rapid pass-through fund flows will be scrutinized if later linked to unlawful activity.

Best practice is to (1) require documentation before crediting transactions as legitimate business receipts, (2) refuse pass-through transfers without a clear contractual basis and approvals, and (3) maintain a written escalation trail showing that red flags were investigated and resolved through documented governance processes.

About Nicolas and De Vega Law Offices

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