Recent headlines have once again placed the Anti-Money Laundering Council (AMLC) in the spotlight. Just this week, Malacañang confirmed that the Court of Appeals issued a freeze order on 135 bank accounts and 27 insurance policies linked to alleged anomalies in flood control projects in Bulacan. The move came after a petition filed by the AMLC, following suspicions of money laundering schemes involving public funds meant for flood control. Among those covered by the freeze order were 20 Department of Public Works and Highways (DPWH) personnel and five contractors now facing investigation before the Ombudsman and the Senate Blue Ribbon Committee.

This scandal may sound distant to everyday professionals, but it actually underscores why AMLA — the Anti-Money Laundering Act — also places responsibility on real estate professionals like brokers, salespersons, and appraisers.

The Role of AMLC

The Anti-Money Laundering Council (AMLC) is the country’s financial watchdog. Its mandate is to:

• Investigate suspicious transactions that may involve proceeds of unlawful activities.
• File petitions for freeze orders before the Court of Appeals to stop the movement of suspected dirty money.
• Coordinate with agencies like the Ombudsman, NBI, BIR, and even the PRC when licensed professionals are involved.

Its goal is simple: to protect the financial system from being used as a tool to hide or “clean” money derived from illegal activities.

Why Real Estate Professionals Are Covered by AMLA

Many ask — what do real estate professionals have to do with this?

The answer: Real estate is one of the most common channels for money laundering. Dirty money often ends up being used to buy land, condos, or houses to make it appear “legitimate.” Because of this, real estate brokers, appraisers, and developers are considered “covered persons” under AMLA.

That means:

• Brokers must conduct customer due diligence (CDD) — verifying the true identity of buyers and sellers.
• Suspicious Transaction Reports (STRs) must be filed with the AMLC if a deal looks questionable (e.g., unusually high cash payments, buyers refusing to disclose beneficial owners).
• Record-keeping requirements are in place to help trace transactions years later.

So, while AMLC is currently freezing accounts of contractors linked to DPWH flood projects, the same vigilance applies to real estate — where professionals may unknowingly be approached by individuals trying to use property deals to launder money.

Broker vs. Contractor: Different Roles, Same Accountability Under AMLA

In this flood project scandal, the main actors being investigated are contractors — companies tasked with public infrastructure projects. In real estate, our role as brokers is very different: we connect buyers and sellers, handle negotiations, and ensure legal compliance in private property transactions.

But here’s the similarity: both contractors and brokers may be held accountable under AMLA, depending on their activities.

• Contractors are not inherently “covered persons” under AMLA. However, they become subject to AMLA when:
  • They act as Designated Non-Financial Businesses and Professions (DNFBPs), such as functioning as real estate developers, or engaging in the trading of precious metals/stones.
  • They fall under the regulation of agencies like the SEC or DTI in activities relevant to AMLA compliance.
  • They are found to be misusing DNFBPs — money launderers and terrorism financiers sometimes use construction contractors to disguise illegal funds, making them part of the laundering chain.
  • They act as “gatekeepers” — DNFBPs can hide the true ownership and control of illegal proceeds, creating a significant risk if contractors are complicit or negligent.
• Brokers, meanwhile, are explicitly listed as covered persons under AMLA. We must verify identities, file suspicious transaction reports, and maintain compliance records to avoid being used in laundering schemes.

The common thread? AMLC requires both to exercise vigilance and report anomalies when their roles intersect with financial transactions vulnerable to laundering.

Takeaway for Real Estate Professionals

The flood project scandal is a strong reminder that financial crimes do not happen in isolation. They pass through banks, insurance companies, government agencies, contractors — and yes, even through the real estate market.

As licensed professionals, our duty goes beyond closing deals. We are also gatekeepers of integrity in the financial system. By complying with AMLA, reporting suspicious activity, and practicing due diligence, we protect not only our clients but also the reputation of our profession.