Anti-Money Laundering Cases

RP vs. Hon. Velasco Jr. (GR: 174629)

Money laundering has been generally defined by the International Criminal Police Organization (Interpol) `as any act or attempted act to conceal or disguise the identity of illegally obtained proceeds so that they appear to have originated from legitimate sources.

Section 4 of the AMLA states that money laundering is a crime whereby the proceeds of an unlawful activity as defined in the law are transacted, thereby making them appear to have originated from legitimate sources.

Respondents posit that a bank inquiry order under Section 11 may be obtained only upon the pre-existence of a money laundering offense case already filed before the courts. The conclusion is based on the phrase upon order of any competent court in cases of violation of this Act, the word cases generally understood as referring to actual cases pending with the courts.

We are unconvinced by this proposition, and agree instead with the then Solicitor General who conceded that the use of the phrase in cases of was unfortunate, yet submitted that it should be interpreted to mean in the event there are violations of the AMLA, and not that there are already cases pending in court concerning such violations. If the contrary position is adopted, then the bank inquiry order would be limited in purpose as a tool in aid of litigation of live cases, and wholly inutile as a means for the government to ascertain whether there is sufficient evidence to sustain an intended prosecution of the account holder for violation of the AMLA.

Section 11 also allows the AMLC to inquire into bank accounts without having to obtain a judicial order in cases where there is probable cause that the deposits or investments are related to kidnapping for ransom, certain violations of the Comprehensive Dangerous Drugs Act of 2002, hijacking and other violations under R.A. No. 6235, destructive arson and murder. Since such special circumstances do not apply in this case, there is no need for us to pass comment on this proviso. Suffice it to say, the proviso contemplates a situation distinct from that which presently confronts us, and for purposes of the succeeding discussion, our reference to Section 11 of the AMLA excludes said proviso.

GSIS Vs. CA (GR 189206)

Republic Act No. 1405 provides for four (4) exceptions when records of deposits may be disclosed. These are under any of the following instances: a) upon written permission of the depositor, (b) in cases of impeachment, (c) upon order of a competent court in the case of bribery or dereliction of duty of public officials or, (d) when the money deposited or invested is the subject matter of the litigation, and e) in cases of violation of the Anti-Money Laundering Act (AMLA), the Anti-Money Laundering Council (AMLC) may inquire into a bank account upon order of any competent court.  On the other hand, the lone exception to the non-disclosure of foreign currency deposits, under Republic Act No. 6426, is disclosure upon the written permission of the depositor.

These two laws both support the confidentiality of bank deposits. There is no conflict between them. Republic Act No. 1405 was enacted for the purpose of giving encouragement to the people to deposit their money in banking institutions and to discourage private hoarding so that the same may be properly utilized by banks in authorized loans to assist in the economic development of the country.  It covers all bank deposits in the Philippines and no distinction was made between domestic and foreign deposits. Thus, Republic Act No. 1405 is considered a law of general application. On the other hand, Republic Act No. 6426 was intended to encourage deposits from foreign lenders and investors.  It is a special law designed especially for foreign currency deposits in the Philippines. A general law does not nullify a specific or special law. Generalia specialibus non derogant.  Therefore, it is beyond cavil that Republic Act No. 6426 applies in this case.

 

 

Philippine Bank Secrecy law Cases

GSIS vs. CA (GR: 189206)

Republic Act No. 1405 provides for four (4) exceptions when records of deposits may be disclosed. These are under any of the following instances:

a) upon written permission of the depositor,

(b) in cases of impeachment,

(c) upon order of a competent court in the case of bribery or dereliction of duty of public officials or,

(d) when the money deposited or invested is the subject matter of the litigation, and

(e) in cases of violation of the Anti-Money Laundering Act (AMLA), the Anti-Money Laundering Council (AMLC) may inquire into a bank account upon order of any competent court. On the other hand, the lone exception to the non-disclosure of foreign currency deposits, under Republic Act No. 6426, is disclosure upon the written permission of the depositor.

These two laws both support the confidentiality of bank deposits. There is no conflict between them. Republic Act No. 1405 was enacted for the purpose of giving encouragement to the people to deposit their money in banking institutions and to discourage private hoarding so that the same may be properly utilized by banks in authorized loans to assist in the economic development of the country.  It covers all bank deposits in the Philippines and no distinction was made between domestic and foreign deposits.

Thus, Republic Act No. 1405 is considered a law of general application. On the other hand, Republic Act No. 6426 was intended to encourage deposits from foreign lenders and investors.  It is a special law designed especially for foreign currency deposits in the Philippines. A general law does not nullify a specific or special law. Generalia specialibus non derogant. Therefore, it is beyond cavil that Republic Act No. 6426 applies in this case.

Intengan v. Court of Appeals affirmed the above-cited principle and categorically declared that for foreign currency deposits, such as U.S. dollar deposits, the applicable law is Republic Act No. 6426.

Ricardo Bangayan vs. RCBC (GR: 149193)

Petitioner Bangayan claims that respondent Saria divulged confidential information through the Affidavit he submitted to the BOC.  However, nothing in respondent Sarias Affidavit before the BOC showed that details of petitioner Bangayans bank accounts with respondent bank was disclosed. If at all, respondent Saria merely discussed his functions as an account officer in respondent bank and identified petitioner as the one who had guaranteed the payment or obligations of the importers under the Surety Agreement.

According to petitioner Bangayan, the responses of respondent RCBCs officers in relation to the BOCs actions led to unsavory news reports that disparaged petitioners good character and reputation and exposed him to public ridicule and contempt. However, as the appellate court correctly found, the humiliation and embarrassment that petitioner Bangayan suffered in the business community was not brought about by the alleged violation of the Bank Secrecy Act; it was due to the smuggling charges filed by the Bureau of Customs which found their way in the headlines of newspapers.

Both the trial and appellate courts correctly found that petitioner Bangayan did not satisfactorily introduce evidence to substantiate his claim that defendant bank gave any classified information in violation of the Bank Secrecy Act. Failing to adduce further evidence in the instant Petition with respect to the banks purported disclosure of confidential information as regards his accounts, petitioner cannot be awarded any damages arising from an unsubstantiated and unproved violation of the Bank Secrecy Act.

PSBank vs. Senate Impeachment Court (GR: 200238)

Justice Brion, concurring opinion;

RA No. 6426 guarantees a clear right to the depositors and demands an exacting obligation from banks to maintain the absolute confidentiality of the foreign currency deposits. The failure of a bank to fulfill its obligation under the law subjects the bank and its officials to criminal liability under Section 10 of RA No. 6426, and its authority to accept new foreign currency deposits may be revoked or suspended by the Bangko Sentral ng Pilipinas under Section 87 of the Manual of Regulations on Foreign Exchange Transactions.  More than this, the banks failure in its obligation given media coverage and the non-legal slant it can give gives rise to a real danger that the banks reputation may suffer. In a very bad situation, the effect goes beyond the banks reputation and can adversely affect the economy.

The only exception provided by the law is when there is a written permission by the depositor. Jurisprudence declares that there is only a single exception to the secrecy of foreign currency deposits, that is, disclosure is allowed only upon the written permission of the depositor. This single excepting circumstance, however, does not obtain in the present case; hence, the banks petition.

RA No. 6426, by its plain terms, is clear that all foreign currency deposits are considered to be absolutely confidential. The law expressly refers to deposits not to the identity, nationality, or residence of the depositors. Thus, to claim that the depositors must be considered is misplaced. Also, to so claim is to read into the clear words of the law exemptions that its literal wording does not support. To so claim may even amount to judicial legislation.

Joseph Victor \Ejercito VS. Sandiganbayan (GR: 157294-95)

Raised as issues are:

  1. Whether petitioners Trust Account No. 858 is covered by the term deposit as used in R.A. 1405;
  1. Whether petitioners Trust Account No. 858 and Savings Account No. 0116-17345-9 are excepted from the protection of R.A. 1405; and
  1. Whether the extremely-detailed information contained in the Special Prosecution Panels requests for subpoena was obtained through a prior illegal disclosure of petitioners bank accounts, in violation of the fruit of the poisonous tree doctrine.

If the money deposited under an account may be used by banks for authorized loans to third persons, then such account, regardless of whether it creates a creditor-debtor relationship between the depositor and the bank, falls under the category of accounts which the law precisely seeks to protect for the purpose of boosting the economic development of the country.

Trust Account No. 858 is, without doubt, one such account. The Trust Agreement between petitioner and Urban Bank provides that the trust account covers deposit, placement or investment of funds by Urban Bank for and in behalf of petitioner. The money deposited under Trust Account No. 858, was, therefore, intended not merely to remain with the bank but to be invested by it elsewhere. To hold that this type of account is not protected by R.A. 1405 would encourage private hoarding of funds that could otherwise be invested by banks in other ventures, contrary to the policy behind the law.

SECTION 2. All deposits of whatever nature with banks or banking institutions in the Philippines including investments in bonds issued by the Government of the Philippines, its political subdivisions and its instrumentalities, are hereby considered as of an absolutely confidential nature and may not be examined, inquired or looked into by any person, government official, bureau or office, except upon written permission of the depositor, or in cases of impeachment, or upon order of a competent court in cases of bribery or dereliction of duty of public officials, or in cases where the money deposited or invested is the subject matter of the litigation.

Clearly, therefore, R.A. 1405 is broad enough to cover Trust Account No. 858.

Petitioner contends that since plunder is neither bribery nor dereliction of duty, his accounts are not excepted from the protection of R.A. 1405. Philippine National Bank v. Gancayco holds otherwise:

Cases of unexplained wealth are similar to cases of bribery or dereliction of duty and no reason is seen why these two classes of cases cannot be excepted from the rule making bank deposits confidential. The policy as to one cannot be different from the policy as to the other. This policy expresses the notion that a public office is a public trust and any person who enters upon its discharge does so with the full knowledge that his life, so far as relevant to his duty, is open to public scrutiny.

The fruit of the poisonous tree principle, which states that once the primary source (the tree) is shown to have been unlawfully obtained, any secondary or derivative evidence (the fruit) derived from it is also inadmissible, does not apply in this case. In the first place, R.A. 1405 does not provide for the application of this rule. Moreover, there is no basis for applying the same in this case since the primary source for the detailed information regarding petitioners bank accounts the investigation previously conducted by the Ombudsman was lawful.