REPUBLIC - v - EUGENIO
REPUBLIC OF THE PHILIPPINES, Represented
by THE ANTI-MONEY LAUNDERING COUNCIL (AMLC), vs.
HON. ANTONIO M. EUGENIO, JR., AS PRESIDING JUDGE OF RTC, MANILA, BRANCH 34,
PANTALEON ALVAREZ and LILIA CHENG
G.R. No.
174629, February 14, 2008
Facts:
1.
After nullifying the concession agreement
awarded to the Philippine International Airport Terminal Corporation (PIATCO)
over the Ninoy Aquino International Airport – International Passenger Terminal
3 (NAIA 3) Project in in Agan
v. PIATCO, series of investigations were undertaken by the Ombudsman and
the Compliance and Investigation Staff (CIS) of petitioner Anti-Money
Laundering Council (AMLC).
2.
Office of the Solicitor General (OSG)
wrote the AMLC requesting the latter’s assistance "in obtaining more
evidence to completely reveal the financial trail of corruption surrounding the
[NAIA 3] Project"
3.
The CIS conducted an intelligence
database search on the financial transactions of certain individuals including
Pantaleon Alvarez (Alvarez) who had been the Chairman of the PBAC Technical
Committee, NAIA-IPT3 Project.
5.
The Council resolved to authorize
a.
the Executive Director of the AMLC "to
sign and verify an application to inquire into and/or examine the [deposits] or
investments of Pantaleon Alvarez, Wilfredo Trinidad, Alfredo Liongson, and
Cheng Yong, and their related web of accounts wherever these may be found, as
defined under Rule 10.4 of the Revised Implementing Rules and
Regulations;" and
b.
the AMLC Secretariat "to conduct
an inquiry into subject accounts once the Regional Trial Court grants the
application to inquire into and/or examine the bank accounts" of those
four individuals.
6.
AMLC filed an application to inquire into
or examine the deposits or investments of the involved parties before RTC of
Makati and RTC Manila. Granted.
7.
Alvarez argued that nothing in R.A. No. 9160 authorized the AMLC to
seek the authority to inquire into bank accounts ex parte. Alvarez prayed that the
a.
AMLC be ordered to refrain from inquiring
into any of the other bank deposits and alleged web of accounts enumerated in
AMLC’s application with the RTC;
b.
and that the AMLC be directed to refrain
from using, disclosing or publishing in any proceeding or venue any information
or document obtained
8.
Lilia Cheng (the wife of Cheng Yong) filed with the Court of Appeals a
Petition for Certiorari, Prohibition and Mandamus with Application for TRO
and/or Writ of Preliminary Injunction
directed against the Republic of the Philippines through the AMLC, Manila RTC
Judge Eugenio, Jr. and Makati RTC Judge Marella, Jr. Granted. Hence, this case.
Issue: Is an application for an order authorizing inquiry into or examination
of bank accounts or investments under Section 11 of the AMLA ex-parte in nature or one which requires notice
and hearing?
Held: One which requires notice and hearing. Case dismissed.
Section 11 does not specifically
authorize, as a general rule, the issuance ex
parte of the bank inquiry
order. It 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:
o
Unlawful activities as defined in Section
3(i) of the law, or a money laundering offense under Section 4 thereof
o
kidnapping for ransom,
o
certain violations of
the Comprehensive Dangerous Drugs Act of 2002,
o
hijacking and other
violations under R.A. No. 6235,
o
destructive arson and
o
murder
In the instances where a court order is required
for the issuance of the bank inquiry order, nothing in Section 11
specifically authorizes that such court order may be issued ex parte.
Section
10
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Section
11
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Freezing of Monetary
Instrument or Property. ― The Court of Appeals, upon application ex
parteby the AMLC and after determination that probable cause exists
that any monetary instrument or property is in any way related to an unlawful
activity as defined in Section 3(i) hereof, may issue a freeze order which
shall be effective immediately. The freeze order shall be for a period of
20 days unless extended by the court.
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Authority to Inquire into Bank
Deposits. ― xxx AMLC may inquire into or examine any
particular deposit or investment with any banking institution or non bank
financial institution upon order of any competent court in cases of violation
of this Act, when it has been established that there is probable cause
that the deposits or investments are related to an unlawful activity as
defined in Section 3(i) hereof or a money laundering offense under Section 4
hereof, except that no court order shall be required in cases involving
unlawful activities defined in Sections 3(i)1, (2) and (12).
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Section 10 uses specific language to authorize an ex
parte application for the
provisional relief therein, a circumstance absent in Section 11. If indeed the
legislature had intended to authorize ex
parte proceedings for the
issuance of the bank inquiry order, then it could have easily expressed such
intent in the law, as it did with the freeze order under Section 10.
Prior to the amendatory law (R.A. No. 9194), it
was the AMLC, not the Court of Appeals, which had authority to issue a freeze
order, whereas a bank inquiry order always then required, without exception,
an order from a competent court.
In A.M. No. 05-11-04-SC, AMLA is specifically authorized on ex parte applications with respect to freeze
orders under Section 10 but make
no similar authorization with respect to bank inquiry orders under Section 11.
Section 11 itself requires that it be established
that "there is probable cause that the deposits or investments are related
to unlawful activities," and it obviously is the court which stands as
arbiter whether there is indeed such probable cause.
The court receiving the application for inquiry
order cannot simply take the AMLC’s word that probable cause exists that the
deposits or investments are related to an unlawful activity. It will have to
exercise its own determinative function in order to be convinced of such fact.
The account holder would be certainly capable of contesting such probable cause
if given the opportunity to be apprised of the pending application to inquire
into his account.
The Court’s construction of Section 11 of the AMLA
is undoubtedly influenced by right to privacy considerations. The source of such
right is statutory, expressed as it is in R.A. No. 1405 otherwise known as the Bank Secrecy Act of 1955. Thus, the
confidentiality of bank deposits remains a basic state policy in the
Philippines.
This statutory right to privacy will not prevent
the courts from authorizing the inquiry anyway upon the fulfillment of the
requirements set forth under Section 11 of the AMLA or Section 2 of the Bank
Secrecy Act; at the same time, the owner of the accounts have the right to
challenge whether the requirements were indeed complied with.
Note: *Under 2016 RIRR*
Rule 10. Freeze Order. -
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Rule 11. Bank Inquiry. -
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Upon verified ex parte petition by the AMLC
and after determination that probable cause exists that any monetary instrument
or property is in any way related to an unlawful activity, the Court of
Appeals may issue a freeze order, which shall be effective immediately,
directing the concerned covered persons and government agency to desist from
allowing any transaction, withdrawal, transfer, removal, conversion,
concealment, or other disposition of the subject monetary instrument or
property.
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Notwithstanding the
provisions of Republic Act No. 1405, as amended; Republic Act No. 6426, as
amended; Republic Act No. 8791, and other laws, the AMLC may inquire into or
examine any particular deposit or investment account, including related
accounts, with any banking institution or non-bank financial institution,
upon order by the Court of Appeals based on an ex parte application in cases
of violation of the AMLA when it has been established that probable cause
exists that the deposits or investments involved, including related accounts,
are in any way related to an unlawful activity or a money laundering offense.
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