Terrorism Financing Prevention and Suppression Act of 2012 (R.A. No. 10168)

Republic Act No. 10168, also known as the "Terrorism Financing Prevention and Suppression Act of 2012," was enacted to combat and suppress the financing of terrorism in the Philippines, in compliance with international obligations under the United Nations Security Council Resolutions (UNSCRs) and the Financial Action Task Force (FATF) recommendations. Below is a detailed analysis of its provisions.

I. DECLARATION OF POLICY

The Act recognizes terrorism as a grave threat to the nation’s security and the international community. It seeks to:

Prevent the financing of terrorism and related activities.
Support the global fight against terrorism financing in accordance with international standards.
Ensure that funds and resources are not made available to terrorist organizations.

II. DEFINITION OF TERMS

Key definitions under Section 3 of the Act include:

Terrorism Financing: The act of providing, collecting, or using funds or property with the intention or knowledge that they will be used to carry out a terrorist act, or by a terrorist organization or individual terrorist.
Terrorist Organization, Association, or Group: Any entity identified and sanctioned by the United Nations Security Council or domestic designation pursuant to the Anti-Terrorism Act of 2020 (R.A. No. 11479).
Funds or Property: Refers to assets, whether tangible or intangible, movable or immovable, however acquired, and legal documents or instruments in any form evidencing title or interest.

III. ACTS PUNISHABLE UNDER R.A. No. 10168

The following are considered unlawful acts:

1. Financing of Terrorism (Section 4):

Providing or collecting funds, property, or other resources with the intention, knowledge, or reason to believe that these will be used for:
- Planning, preparing, or executing terrorist acts.
- Supporting terrorist individuals or organizations.

2. Dealing with Property or Funds of Designated Persons (Section 8):

Any act of transacting, converting, concealing, or acquiring property or funds of individuals, organizations, or entities designated as terrorists.

3. Non-compliance by Covered Institutions (Section 12):

Failure of financial institutions and other covered entities to comply with reporting and freezing orders.

4. Accessory Offenses:

Being an accessory or accomplice to any of the prohibited acts under the law.

IV. PENALTIES

Imprisonment:
- Individuals involved in terrorism financing face imprisonment of 20 years to 40 years.
Fines:
- A fine not less than Php 500,000 but not more than Php 1,000,000.
Additional Penalties:
- Revocation of licenses and forfeiture of property used in the commission of the offense.

V. COVERED INSTITUTIONS

The law applies to the following:

Banks and Financial Institutions:
- As defined under the General Banking Law and regulated by the Bangko Sentral ng Pilipinas (BSP).
Non-Bank Financial Institutions (NBFIs):
- Includes money service businesses, pawnshops, and remittance centers.
Designated Non-Financial Businesses and Professions (DNFBPs):
- Such as casinos, real estate brokers, dealers in precious stones, and lawyers engaged in certain transactions.

VI. AUTHORITY AND POWERS OF AGENCIES

1. Anti-Money Laundering Council (AMLC):

The primary body responsible for the enforcement of the Act.
Key powers:
- Issue freeze orders on property and funds of designated persons.
- Conduct investigations into violations of the Act.
- File petitions for the forfeiture of assets used in terrorism financing.

2. Department of Justice (DOJ):

Responsible for prosecution of offenders under R.A. No. 10168.

3. Financial Institutions:

Covered institutions are mandated to:
- Monitor and report suspicious transactions.
- Freeze funds or property associated with terrorist financing without delay.

VII. FREEZING AND FORFEITURE OF ASSETS

1. Freeze Orders (Section 11):

The AMLC may issue ex parte freeze orders on funds or property of designated terrorists, pending court authorization.
Freeze orders are effective immediately and remain valid for 20 days, extendable upon court approval.

2. Forfeiture (Section 12):

Upon determination of guilt, courts may order the forfeiture of assets used in terrorism financing.

VIII. DUE PROCESS AND REMEDIES

Petition for Lifting of Freeze Orders:
- Affected parties may petition to lift freeze orders within 20 days of issuance.
Judicial Review:
- All freezing and forfeiture orders are subject to judicial oversight to ensure compliance with due process.

IX. COMPLIANCE WITH INTERNATIONAL OBLIGATIONS

R.A. No. 10168 aligns the Philippines with:

United Nations Security Council Resolutions (UNSCRs):
- UNSCR 1267 and 1373, which require the freezing of terrorist assets and criminalization of terrorist financing.
Financial Action Task Force (FATF):
- As a member of the Asia/Pacific Group on Money Laundering, the Philippines is obligated to adopt measures to prevent terrorism financing.

X. RELATION TO OTHER LAWS

Anti-Terrorism Act of 2020 (R.A. No. 11479):
- R.A. No. 10168 complements the Anti-Terrorism Act by focusing on the financial aspect of terrorism.
Anti-Money Laundering Act of 2001 (R.A. No. 9160):
- Terrorism financing is included as a predicate offense under this law.
Revised Penal Code:
- Applicable for general principles on liability and penalties.

XI. SAFEGUARDS AGAINST ABUSE

The law ensures that actions taken under its provisions respect human rights and fundamental freedoms, in compliance with the 1987 Philippine Constitution.

XII. PRACTICAL IMPLICATIONS

Obligations for Covered Entities:
- Establish stringent Know-Your-Customer (KYC) policies.
- Monitor high-risk customers and transactions.
Heightened Surveillance:
- Increased scrutiny of financial flows, particularly cross-border transactions.
Public Cooperation:
- Citizens are encouraged to report suspicious activities.

XIII. CONCLUSION

R.A. No. 10168 is a vital piece of legislation designed to disrupt and deter terrorism by targeting its financial backbone. It ensures the Philippines' compliance with global standards while protecting the public from misuse of the law through constitutional safeguards.