On 20 July 2024, Philippine President Ferdinand Marcos Jr. signed into law Republic Act (“R.A.”) No. 12010, otherwise known as the “Anti-Financial Account Scamming Act (“AFASA”). The act aims to promote awareness on the proper use of Financial Accounts and to protect the public from cybercriminals and criminal syndicates who target Financial Accounts or lure Account Owners into becoming accessories or perpetrators of fraudulent activities.

The following are among the key points of the AFASA:

1. Prohibited Acts (Financial Account Scamming)

2. Responsibility of an Institution to their Client

Institutions shall ensure that Financial Accounts are protected by adequate risk management systems and controls.

• Institutions that are determined by the BSP to be compliant with the above-mentioned requirement shall NOT be liable for any loss or damage arising from the afore-mentioned prohibited acts.

• Otherwise, institutions shall be liable for restitution of funds to the Account Owners for failure to employ adequate risk management systems. Conviction shall not be a prerequisite to the restitution of funds.

3. Disputed Transactions and Temporary Holding of Funds

A transaction is considered disputed if the Institution has reasonable ground to believe that the transaction appears to be: (a) unusual; (b) without clear economic purpose; (c) from an unknown or illegal source; or (d) facilitated through social engineering schemes.

Institutions have the authority to temporarily hold the disputed funds within a period prescribed by the Bangko Sentral ng Pilipinas (“BSP”) which shall not exceed thirty (30) calendar days, unless extended by a court of competent jurisdiction. Institutions shall notify the BSP upon temporary hold of disputed funds. Institutions which fails to hold disputed funds shall be liable for loss or damage from such failure, including restitution of the disputed funds to the Account Owner. Institutions that hold disputed funds beyond the allowable period or improperly holds funds shall be subject to administrative action under R.A. 7653 (the New Central Bank Act).

4. Authority of the BSP

a.  Investigation. The BSP has the authority to investigate Financial Accounts which may be involved in the commission of above-mentioned offenses. An Institution or any of its directors, officers, or employees cannot be held liable for any act done in compliance with the BSP’s order for an inquiry/investigation of a Financial Account.

b.  Warrants and orders. The BSP also has the authority to apply for cybercrime warrants and issue the related orders with respect to electronic communications used in any violation of the AFASA. The BSP may request the assistance of the National Bureau of Investigation (“NBI”) and the Philippine National Police (“PNP”) with regards to the investigation of cases and the enforcement of cybercrime warrants and related orders.

c.  Information-sharing. The BSP can issue rules on information-sharing and disclosure with law enforcement and other competent authorities in connection with its inquiry/investigation of Financial Accounts.

5. Penalties

A person violating any of the provisions of the AFASA may be penalized with imprisonment or fine, or both. Closure of Financial Account as well as forfeiture of funds in said Financial Account may also be imposed depending upon the violation.

Government officials guilty of violating the AFASA may also suffer perpetual absolute disqualification.