EXPLAINER: What are ‘covered, suspicious transactions’

This report is part of Inquirer’s special coverage of Vice President Sara Duterte’s impeachment proceedings. For real-time updates, follow our live coverage of the impeachment.

As the impeachment proceedings against Vice President Sara Duterte resumed on Wednesday, April 22, lawmakers put financial review in focus, citing Anti-Money Laundering Council (AMLC) reports on “covered transactions” and “suspicious transactions.”

For the latest in the series of hearings by the House of Representatives’ Committee on Justice, the AMLC was subpoenaed to provide copies of the reports from banking institutions involving Duterte and her husband, lawyer Manases Carpio, from 2006 to 2025.

According to the AMLC, reports of “covered transactions” must be submitted within five working days, while reports of “suspicious transactions,” including attempted transactions, must be filed by the next working day after their occurrence.

Based on AMLC Regulatory Issuance No. 2, series of 2024, “covered transactions” are transactions in cash or other equivalent monetary instrument exceeding P500,000.

These also include cash or other equivalent monetary-instrument transactions with or involving jewelry dealers, dealers in precious metals, and dealers in precious stones exceeding P1 million, as well as cash transactions with or involving real estate developers or brokers exceeding P7.5 million, or its equivalent in any other currency.

A casino cash transaction exceeding P5 million or its equivalent in any other currency is also considered as a “covered transaction.”

Under the same issuance, “covered transaction reports” (CTRs) are filed by a covered person with the AMLC.

Covered persons are financial institutions and designated nonfinancial businesses and professions.

Meanwhile, “suspicious transactions” are transactions, regardless of amount, in which certain suspicious circumstances are determined, based on suspicion or, if available, reasonable grounds, to exist.

READ: AMLC confirms suspicious transactions made by Sara Duterte, kin

These include cases in which there is no clear legal, trade, or economic purpose; the client’s identity is not properly established; or the amount involved is inconsistent with the client’s financial capacity.

A transaction may also be flagged if it appears structured to avoid reporting requirements, deviates from the client’s usual financial behavior, or shows any connection to money laundering, terrorism financing, or related unlawful activities.

Transactions that closely resemble or are linked to such patterns—especially across related accounts—may also be treated as suspicious.

Additional indicators listed under Rule 3.a.15 of the Internal Rules and Regulations of the Terrorism Financing Prevention and Suppression Act can also render a transaction suspicious, particularly when linked to potential terrorism financing.

These include wire transfers with no clear legal or economic purpose, especially those involving countries associated with terrorist activity, as well as transactions involving parties from such jurisdictions. Red flags also cover unexplained repetitive deposits or withdrawals, transactions far exceeding a client’s financial capacity, or activity inconsistent with a client’s known business profile.

Other warning signs include deposits from unrelated individuals, remittances from countries with no known connection to the client, or if the client has been reported in the news or is under investigation for terrorism-related activities.

Transactions involving individuals, companies, or NGOs/NPOs linked to suspected terrorist groups, or those potentially used to move funds for such groups, are also considered suspicious.

For NGOs or NPOs, unusual financial patterns—such as a lack of typical operational expenses, an absence of local donor support, or transaction volumes inconsistent with their stated mission—also raise concern.

Any transaction closely resembling these circumstances may similarly be flagged as suspicious. /dm