Anti-bulk Foreign Currency Smuggling Act

Sellite TWENTIETH CONGRESS OF THE ) Offee of the Secret ip REPUBLIC OF THE PHILIPPINES First Regular Session JAN 27 A10:15 SENATE RECEIVED BY: S. No: 1692 Introduced by Senator Manuel "Lito" M. Lapid AN ACT ACT PENALIZING THE SMUGGLING OF FOREIGN CURRENCY AND OTHER MONETARY INSTRUMENTS IN BULK INTO OR OUT OF THE PHILIPPINES EXPLANATORY NOTE The increasing sophistication of transnational crimes, including money laundering, terrorism financing, and the illicit movement of proceeds of unlawful activities, poses a serious threat to the integrity and stability of the Philippine financial system. One of the recognized vulnerabilities exploited by criminal networks is the physical cross-border transportation of large amounts of foreign currency and foreign currency-denominated bearer monetary instruments, commonly referred to as bulk cash smuggling. While existing laws mandate the declaration of foreign currency brought into or taken out of the country, current enforcement mechanisms remain fragmented and insufficient to effectively deter deliberate non-declaration, false declaration, structuring, and other evasive schemes designed to circumvent regulatory oversight. These gaps expose the country to the risk of being used as a conduit for money laundering, terrorism financing, and the proliferation of weapons of mass destruction, contrary to the State's constitutional mandate to protect the public interest and comply with international standards.

This measure seeks to address these risks by institutionalizing a comprehensive written or electronic declaration system for the physical cross-border transfer of foreign currency and foreign currency-denominated bearer monetary instruments. It clearly defines prohibited acts, including bulk foreign currency smuggling, non- declaration, false declaration amounting to fraud, and structuring, and imposes appropriate criminal, civil, and administrative penalties to deter such offenses. At the same time, the bill carefully balances enforcement with the protection of legitimate travel and commerce. It expressly safeguards the right of individuals, particularly Overseas Filipino Workers, to travel and carry foreign currency for lawful purposes, and mandates assistance by Customs Officers and the establishment of dedicated lanes for OFWs in international airports to prevent inadvertent violations. The proposed measure further strengthens inter-agency coordination among the Bureau of Customs, the Anti-Money Laundering Council, and the Bangko Sentral ng Pilipinas, and designates bulk foreign currency smuggling as a predicate offense to money laundering under Republic Act No. 9160. By doing so, it enhances the country's capacity to investigate, prosecute, and suppress financial crimes in accordance with international anti-money laundering and counter-terrorism financing standards. In view of the foregoing, the immediate passage of this bill is earnestly sought. M. LAPT Senator

Sellai Office of the Sautarp TWENTIETH CONGRESS OF THE ) REPUBLIC OF THE PHILIPPINES JAN 27 A10:15 First Regular Session SENATE RECEIVED BY: 1692 S. No. _ Introduced by Senator Manuel "Lito" M. Lapid AN ACT 2 ACT PENALIZING THE SMUGGLING OF FOREIGN CURRENCY AND OTHER MONETARY INSTRUMENTS IN BULK INTO OR OUT OF THE PHILIPPINES Be it enacted by the Senate and House of Representatives of the Philippines in Congress assembled:

SECTION 1. Short Title. - This Act shall be known as the "Anti-Bulk Foreign

5 Currency Smuggling Act."

SEC. 2. Declaration of Policy. - It is hereby declared the policy of the State to

protect and preserve the integrity of the country's financial system, and to ensure that the Philippines shall not be used as a money laundering site for the proceeds of unlawful activity. The State shall protect life, liberty, and properly from acts of terrorism by preventing the financing of terrorism, terrorist individuals and entities, and weapons of mass destruction. Likewise, the State shall respect and protect the right of its citizens to travel out Of and into the country, particularly Overseas Filipino Workers, for legitimate purposes, and with regard to foreign currency and foreign currency-denominated bearer monetary instruments carried by them incidental to their travel in accordance with law. Towards this end, the State shall enforce a written or electronic declaration system for the physical cross-border transfer of foreign currency and other foreign currency-denominated bearer monetary instruments into and out of the Philippines.

SEC. 3. Definition of Terms. - As used in this Act:

(a) Common Carrier refers to any person or entity engaged in the business of transporting individuals or goods for a fee who holds itself out as ready to engage in such transportation for hire and who undertakes to do so indiscriminately for all persons who are prepared to pay the fee for the particular service offered; (b) Currency refers to the banknotes and coins that are in circulation as medium of exchange in the country of issuance; (c) False declaration refers to a misrepresentation of the amount of foreign currency or foreign currency denominated-bearer monetary instruments being transported, or a misrepresentation of other relevant data required for submission in the declaration; (d) Foreign currency refers to the coin and banknote of any country other than the Philippines that is designated as legal tender and that is in circulation as a medium of exchange in the country of issuance; (e) Foreign currency-denominated bearer monetary instrument refers to foreign exchange- denominated monetary instrument in bearer form such as; traveler's check; monetary instrument that is either in bearer form, endorsed without restriction, made out to a fictitious payee, or otherwise m such form that title thereto passes upon delivery; incomplete instrument, including check, promissory note, and money order signed, but with the payee's name omitted; and security or stock in bearer form or otherwise in such form that title thereto passes upon delivery; (f) Fraud refers to false declaration of foreign currency or bearer monetary instruments being transported with a discrepancy of more than thirty percent (30%) between the amount declared and the amount found by the Customs Officer after examination; (g) Non-declaration refers to the failure to declare foreign currency or foreign currency- denominated bearer monetary instruments, or evasion of declaration as required under this Act;

(h) Physical cross-border transfer refers to any inbound or out-bound physical transportation of currency or bearer monetary instruments from one country to another country. The term includes the following modes of transportation: (1) physical transportation by a natural person, as part of that person's accompanying baggage or through the person's vehicle; (2) shipment of currency or bearer monetary instruments through containerized cargo or express and regular air shipments; or (3) the mailing of currency or bearer monetary instruments by a natural or legal person; and (i) Structuring refers to the act of breaking the amount of foreign currency or foreign currency-denominated bearer monetary instruments into different sums in order to avoid the declaration required under this Act.

SEC. 4. Written or Electronic Declaration for the Physical Cross-Border Transfer

13 of Foreign Currencies and Foreign Currency-Denominated Bearer Monetary Instruments. - Any person or agent or bailee of the person who transports, is about to transport, or has transported foreign currency or foreign currency-denominated bearer monetary instruments in an amount that exceeds Ten Thousand US Dollars (US $10,000.00) or its equivalent, or such amount as may be determined by the Anti- Money Laundering Council (AMC) through published circular orders, from a place in 19 the Philippines to a place outside the Philippines; or to a place in the Philippines from a place outside the Philippines, is required to declare the same under oath using the prescribed form. The declaration shall be filed in the following manner: (a) If the person or agent brings foreign currency or foreign currency- denominated bearer monetary instruments in the accompanying baggage or on any conveyance or otherwise, the person or agent should accomplish the prescribed declaration form upon arrival to or before departure from the Philippines and submit the completed form to the Customs Officer on duty; (b) In case of unaccompanied foreign currency or foreign currency- denominated bearer monetary instruments, the common carrier should file its declaration to the Bureau of Customs (BOC) within twenty-four (24) hours before its arrival in or departure from the Philippines; and

(c) In case of receipt of foreign currency or foreign currency- denominated bearer monetary instruments or both, the bailee should file a declaration to the BOC within five (5) days from receipt thereof. In the foregoing instances, the act of structuring as defined under Section 3 hereof, or directing, assisting or participating in structuring any physical cross- border transportation of foreign currency or foreign currency-denominated monetary instruments in order to avoid the currency declaration requirement, shall be prohibited and punishable under Section 9 of this Act.

SEC.5. Specifications of the Declaration Form. - The declaration form shall

contain the following information: (a) Personal information of the person transporting the foreign currency or foreign currency-denominated bearer monetary instruments^ including the person's full name, date of birth, place of birth, citizenship, passport number, permanent address, and occupation or business activity; (b) Details of travel, including arrival or departure date, flight number and name of carrier or voyage number and name of vessel, bill of lading or airway bill number and date, prior port of entry or departure, port of entry or departure, and destination: Provided, That if the declarant is a non-resident individual, the Declaration Form shall contain the declarant's address, contact number, and duration of stay in the Philippines; (c) Legal capacity in which the person filing the declaration is acting; (d) Information on the owner or sender of the foreign currency or foreign currency- denominated bearer monetary instruments, including the name of the sender or owner of the foreign currency or foreign currency-denominated bearer monetary instruments, permanent address, and occupation or business activity, when the person transporting does not legally and beneficially own said foreign

currency or foreign currency- denominated bearer monetary instruments; (e) Information on the recipient of the foreign currency or foreign currency-denominated bearer monetary instruments, including the name of the recipient of the foreign currency or foreign currency- denominated bearer monetary instruments; permanent address; and occupation or business activity, when the person transporting personally is not going to use said foreign currency or foreign currency-denominated bearer monetary instruments; (f) Information on the foreign currency or foreign currency- denominated bearer monetary instruments being transported, including the type of foreign currency or foreign currency- denominated bearer monetary instruments, the country that issued such currency or monetary instruments, the amount of the currency or monetary instruments, source of the currency or monetary instruments and how these were acquired, and the purpose or intended use of the transport of the currency or monetary instruments; and (g) Additional information as may be required under the rules and regulations to be issued to implement this Act.

SEC. 6. Registration of Entities Engaged in Periodic Transfer of Bulk Currency.

- Any person or entity engaged in periodic transfer of bulk currency under money service business shall register with the Bangko Sentral ng Pilipinas (BSP). The BSP shall furnish the BOC the list of registered persons or entities engaged in periodic transfer of bulk currency for monitoring at the ports of entry and exit in the implementation of this Act. The failure by persons or entities shown to be engaged in periodic transfer of bulk currency to register as prescribed in this Act shall be reasonable ground to suspect that the foreign currency or foreign currency-denominated bearer monetary

1 instrument is related to an unlawful activity and shall be subject to investigation by 2 the AMLC, in accordance with Sections 8 and 11 of this Act.

SEC. 7. Assistance by the Customs Officer on Duty. - Incoming or outgoing

4 passengers bringing in or out of the Philippines foreign currencies or foreign currency- 5 denominated bearer monetary instruments in excess of Ten Thousand US Dollars 6 (US$10,000.00) or its equivalent shall, upon request, be assisted by the Customs 7 Officer on duty in filling the Currencies Declaration Form and Customs Baggage 8 Declaration Form. In cases of inadvertent non- declaration or unintentional inaccurate 9 declaration of foreign currency or foreign currency- denominated bearer monetary 10 instrument by an incoming or outgoing passenger during verbal verification and initial physical examination, the Customs Officer on duty shall assist the incoming or 12 outgoing passenger in accomplishing the Currencies Declaration Form and Customs Baggage Declaration Form. The BOC shall establish dedicated lanes for Overseas Filipino Workers in all international airports to implement the provisions of this Section.

SEC. 8. Responsibilities of Government Agencies. - The BOC shall submit the

declaration to the AMLC within twenty-four (24) hours upon receipt thereof for purposes of conducting an investigation in accordance with Section 11 of this Act. The BOC is authorized to enlist the assistance of any branch, department, bureau, office, agency or instrumentality of the government, including government- 20 owned and controlled corporations, in the implementation of this Act, which may include the use of its personnel, facilities, and resources for the prevention, detection, and investigation of offenses and prosecution of offenders under this Act,

SEC. 9. Bulk Foreign Currency Smuggling Offense. - The offense of bulk

foreign currency smuggling is committed when: (a) A person physically transports or transfers foreign currency or foreign currency-denominated bearer monetary instruments in an amount that exceeds Two Hundred Thousand US Dollars (US $200,000.00) or its equivalent from a place within the Philippines to a place outside of the Philippines, or from a place

outside the Philippines to a place within the Philippines, unless registered as an entity engaged in periodic transfer of bulk currency under Section 6 hereof; or (b) A person evades the currency declaration requirement under this Act by: 1. Concealing foreign currency or foreign currency-denominated bearer monetary instruments in an amount that exceeds Ten Thousand US Dollars (US $10,000.00) or its equivalent in any article worn by the individual or in any conveyance, article of luggage, merchandise, or other container, and transports or transfers or attempts to transport or transfer such currency or bearer monetary instruments from a place within the Philippines to a place outside of the Philippines, or from a place outside the Philippines to a place within the Philippines; 2. Failing to declare the unaccompanied foreign currency or foreign currency- denominated bearer monetary instruments to be transported or transferred, or already received in accordance with Sections 4(b), 4(c), and 5 hereof; 3. Making a false declaration considered as fraud as defined in

Section 3 hereof; or

4. Structuring the physical cross-border transfer of foreign currency or foreign currency-denominated bearer monetary instruments as defined in Section 3 hereof

SEC. 10. Authority to Obtain Information from the Carrier, —Upon discovery

of non-declaration or false declaration as defined in Section 3 hereof, or if there is a reasonable ground to suspect that the foreign currency or foreign currency- denominated bearer monetary instrument is in any way related to the proceeds of unlawful activities, money laundering, financing of terrorism and weapons of mass destruction, as defined by law, the BOC may request and obtain information and supporting documents from the person or an agent or bailee of the person who is

1 obliged to declare pursuant to Section 4 hereof and the carrier with regard to the 2 travel information of the passenger or foreign currency or foreign currency- 3 denominated bearer monetary instrument subject of carriage.

SEC. 11. Restraint of Currencies and Bearer Monetary Instruments. —Upon

5 discovery of a non-declaration or a false declaration considered as fraud as defined in 6 Section 3 hereof, and when there is a reasonable ground to suspect that the foreign 7 currency or foreign currency- denominated bearer monetary instrument is related to an unlawful activity, money laundering, financing of terrorism and weapons of mass 9 destruction, as defined by law, or in cases involving failure to register under Section 10 6 hereof and structuring as defined in Section 3 hereof, the BOC shall temporarily restrain said foreign currency or foreign currency- denominated bearer monetary instrument for a period of fifteen (15) calendar days, which may be extended for another fifteen (15) calendar days, to give the person concerned the opportunity to produce and submit required information and supporting documents. The BOC shall, on the same day that the non-declaration or false declaration was detected and reasonable grounds to suspect was present, refer the information to other law enforcement agencies and to the AMLC, which shall conduct further investigation on the matter pursuant to their investigative power under Republic Act No. 9160, otherwise known as the Anti-Money Laundering Act of 2001, as amended; Republic Act No. 10168, otherwise known as the Terrorism Financing Prevention and Suppression Act of 2012; and Republic Act No. 11479, otherwise known as the Anti- Terrorism Act of 2020. If no case is filed within the period as mentioned in the first paragraph herein, the temporary restraint imposed upon the foreign currency or foreign currency- denominated bearer monetary instruments shall be ipso facto lifted, without prejudice to the imposition of fine or filing of cases pursuant to Republic Act No. 9160, Republic Act No. 10168, and Republic Act No. 11479.

SEC. 12. Seizure of Currencies and Bearer Monetary Instruments. - Upon

discovery of fraud as defined in Section 3 hereof, the foreign currency or foreign currency-denominated bearer monetary instrument shall immediately be seized by the

BOC pursuant to Section 1113 of Republic Act No. 10863, otherwise known as the 2 Customs Modernization and Tariff Act (CMTA).

SEC. 13. Penalties. -

(1) Term of imprisonment - Any person or co-conspirator who commits bulk foreign currency smuggling offense as defined under Section 9(a) of this Act shall be imprisoned for not less than seven (7) years but not more than fourteen (14) years. Any person or co-conspirator who commits the bulk foreign currency smuggling offense as defined under Section 9(b) of this Act shall be imprisoned for not less than six (6) months but not more than two (2) years. If the offender is an alien, the alien shall, in addition to the penalties herein prescribed, be deported without further proceedings after serving the penalties herein prescribed. If the offender is a public official or employee, the public official or employee shall, in addition to the penalties prescribed herein, be disqualified from holding public office and from voting and participating in any public election for ten (10) years. (2) Fine - Any person or co-conspirator who commits bulk foreign currency smuggling offense as defined under Section 9 of this Act shall, in addition to the penalty prescribed under paragraph (1) of this Section, be punished to a fine amounting to twice the amount of the smuggled foreign currency or foreign currency-denominated bearer monetary instruments. Any person or co-conspirator who commits fraud as defined under

Section 3 of this Act shall, in addition to the penalty prescribed in the preceding

paragraph, be punished with a fine amounting to five (5) times the amount of the falsely declared foreign currency or foreign currency-denominated bearer monetary instruments. (3) Forfeiture - In addition, the court shall, in imposing the penalty under paragraphs (1) and (2) of this Section, order the defendant to forfeit to the

; Republic of the Philippines, any property, real or personal, involved in the offense, and any other property traceable to the property involved in the offense, except those which are seized and forfeited by the BOC pursuant to Republic Act No. 10863. The seizure and forfeiture of property and other criminal proceedings under this Section shall be governed by Republic Act No. 9160, as referred to in Section 11 of this Act. (4) Personal money judgement - If the property subject to forfeiture under paragraph (3) of this Section is unavailable, and the defendant has insufficient substitute property that may be forfeited pursuant to Republic Act No. 9160, the court shall enter a personal money judgement against the defendant for the amount that would be subject to forfeiture. Prosecution and imposition of penalties under this Act shall be without prejudice to any liability or penalty that may be imposed under existing laws.

SEC. 14. Unlawful Activity to Money Laundering. - Bulk foreign currency

16 smuggling under Section 9 of this Act shall be a predicate offense to money laundering 17 as defined in Republic Act No. 9160.

SEC. 15. Rules and Regulations. - Within sixty (60) days from the effectivity

19 of this Act, the Department of Finance shall, in consultation with the BOC, the AMLC, and the BSP, promulgate the rules and regulations to implement the provisions of this 21 Act.

SEC. 16. Separability Clause. - If any provision of this Act is declared

unconstitutional, the remaining parts or provisions not affected thereby shall remain in foil force and effect.

SEC. 17. Repealing Clause. - All laws, decrees, executive orders, implementing

rules and regulations, issuances, or any part thereof inconsistent with the provisions of this Act are deemed repealed, amended or modified accordingly.

SEC. 18. Effectivity. - This Act shall take effect fifteen (15) days after its

publication in the Official Gazette or in a newspaper of general circulation. Approved,