China Banking Corp vs. CA & Gotianuy Lo, GR No 140687, 12-18-06; and Salvacion vs. Central Bank, 343 Phil. 539 (1997)-allowing inquiry into dollar deposits without written consent of depositor

in GR No. 140687,

FIRST DIVISION

G.R. No. 140687 : December 18, 2006

CHINA BANKING CORPORATION, Petitioner, v. THE HONORABLE COURT OF APPEALS and JOSE "JOSEPH" GOTIANUY as substituted by ELIZABETH GOTIANUY LO, Respondents.

the Supreme Court held:

Under the above provision, the law provides that all foreign currency deposits authorized under Republic Act No. 6426, as amended by Sec. 8, Presidential Decree No. 1246, Presidential Decree No. 1035, as well as foreign currency deposits authorized under Presidential Decree No. 1034 are considered absolutely confidential in nature and may not be inquired into. There is only one exception to the secrecy of foreign currency deposits, that is, disclosure is allowed upon the written permission of the depositor.

This much was pronounced in the case of Intengan v. Court of Appeals,¹⁰ where it was held that the only exception to the secrecy of foreign currency deposits is in the case of a written permission of the depositor.

It must be remembered that under the whereas clause of Presidential Decree No. 1246 which amended Sec. 8 of Republic Act No. 6426, the Foreign Currency Deposit System including the Offshore Banking System under Presidential Decree 1034 were intended to draw deposits from foreign lenders and investors, and we quote:

Whereas, in order to assure the development and speedy growth of the Foreign Currency Deposit System and the Offshore Banking System in the Philippines, certain incentives were provided for under the two Systems such as confidentiality of deposits subject to certain exceptions and tax exemptions on the interest income of depositors who are nonresidents and are not engaged in trade or business in the Philippines;

Whereas, making absolute the protective cloak of confidentiality over such foreign currency deposits, exempting such deposits from tax, and guaranteeing the vested rights of depositors would better encourage the inflow of foreign currency deposits into the banking institutions authorized to accept such deposits in the Philippines thereby placing such institutions more in a position to properly channel the same to loans and investments in the Philippines, thus directly contributing to the economic development of the country.

As to the deposit in foreign currencies entitled to be protected under the confidentiality rule, Presidential Decree No. 1034,¹¹ defines deposits to mean funds in foreign currencies which are accepted and held by an offshore banking unit in the regular course of business, with the obligation to return an equivalent amount to the owner thereof, with or without interest.¹² cra

in the case below, cited in 343 Phil. 539 (1997), the Supreme Court allowed the inquiry into the dollar deposit without the written consent of the depositor:

It is in this light that the court in the case of Salvacion v. Central Bank of the Philippines,¹³ allowed the inquiry of the foreign currency deposit in question mainly due to the peculiar circumstances of the case such that a strict interpretation of the letter of the law would result to rank injustice. Therein, Greg Bartelli y Northcott, an American tourist, was charged with criminal cases for serious illegal detention and rape committed against then 12 year-old Karen Salvacion. A separate civil case for damages with preliminary attachment was filed against Greg Bartelli. The trial court issued an Order granting the Salvacions' application for the issuance of a writ of preliminary attachment. A notice of garnishment was then served on China Bank where Bartelli held a dollar account. China Bank refused, invoking the secrecy of bank deposits. The Supreme Court ruled: "In fine, the application of the law depends on the extent of its justice x x x It would be unthinkable, that the questioned law exempting foreign currency deposits from attachment, garnishment, or any other order or process of any court, legislative body, government agency or any administrative body whatsoever would be used as a device by an accused x x x for wrongdoing, and in so doing, acquitting the guilty at the expense of the innocent.¹⁴ cra

NO CRIMINAL CHARGES VS THE CJ UNLESS HE IS FIRST REMOVED FROM OFFICE BY IMPEACHMENT, AM NO.88-4-5433, April 15, 1988

No criminal charges against the CJ unless he is removed from office by impeachment- A.M. No. 88-4-5433, april 15, 1988

 Friday, January 27, 2012 at 8:50pm ·

No criminal charges can be filed against the CJ for "ill-gotten wealth" unless he is first removed from office by impeachment... is this not reason why the Senate should allow evidence on Art. 2.2.1,2.2,2.3, and 2.4  of the impeachment complaint which have something to do with the alleged "ill-gotten" wealth" of the CJ?
------
EN BANC
A.M. No. 88-4-5433 April 15, 1988
IN RE FIRST INDORSEMET FROM HONORABLE RAUL M. GONZALEZ DATED 16 MARCH 1988 REQUESTING HONORABLE JUSTICE MARCELO B. FERNAN TO COMMENT ON AN ANONYMOUS LETTER-COMPLAINT.

in an En Band R E S O L U T I O N,The Supreme Court has held:

"This is not the first time the Court has had occasion to rule on this ...matter. In Lecaroz v. Sandiganbayan, 1 the Court said:

The broad power of the New Constitution vests the respondent court with jurisdiction over "public officers and employees, including those in government-owned or controlled corporations." There are exceptions, however, like constitutional officers, particularly those declared to be removed by impeachment. Section 2, Article XIII of the 1973 Constitution provides:

Sec. 2 The President, the Members of the Supreme Court, and the Members of the Constitutional Commissions shall be removed from office on impeachment for, and conviction of, culpable violation of the Constitution, treason, bribery, other high crimes, or graft and corruption."

Thus, the above provision proscribes removal from office of the aforementioned constitutional officers by any other method; otherwise, to allow a public officer who may be removed solely by impeachment to be charged criminally while holding his office, would be violative of the clear mandate of the fundamental law.

Chief Justice Enrique M. Fernando, in his authoritative dissertation on the New Constitution, states that "judgement in cases of impeachment shall be limited to removal from office and disqualification to hold any office of honor, trust, or profit under the Republic of the Philippines, but the party convicted shall nevertheless be liable and subject to prosecution trial, and punishment, in accordance with law. The above provision is a reproduction of what was found in the 1935 Constitution. It is quite apparent from the explicit character of the above provision that the effect of impeachment is limited to the loss of position and disqualification to hold any office of honor, trust or profit under the Republic. It is equally manifest that the party this convicted may be proceeded against, tried and thereafter punished in accordance with law. There can be no clearer expression of the constitutional intent as to the scope of the impeachment process (The Constitution f the Philippines, pp. 465-466)." The clear implication is, the party convicted in the impeachment proceeding shall nevertheless be liable and subject of prosecution, trial and punishment according to law; and that if the same does not result in a conviction and the official is not thereby removed."

FUNCTIONS OF THE AMLC:-

FUNCTIONS OF ANTI-MONEY LAUNDERING COUNCIL (AMLC)

on Saturday, February 11, 2012 at 3:27pm ·

Section 7. Creation of Anti-Money Laundering Council (AMLC). – The Anti-Money Laundering Council is hereby created and shall be composed of the Governor of the Bangko Sentral ng Pilipinas as chairman, the Commissioner of the Insurance Commission and the Chairman of the Securities and Exchange Commission as members. The AMLC shall act unanimously in the discharge of its functions as defined hereunder:

(1) to require and receive covered transaction reports from covered institutions;

(2) to issue orders addressed to the appropriate Supervising Authority or the covered institution
to determine the true identity of the owner of any monetary instrument or property
a.subject of a covered transaction report

b.or request for assistance from a foreign State,

c.or believed by the Council,
on the basis of substantial evidence to be in whole or in part, whenever located, representing, involving, or related to, directly or indirectly, in any manner or by any means, the proceeds of an unlawful activity;

(3) to institute civil forfeiture proceedings and all other remedial proceedings through the Office of the Solicitor General;

(4) to cause the filing of complaints with the Department of Justice or the Ombudsman for the prosecution of money laundering offenses;

(5) to initiate investigations of covered transactions, money laundering activities and other violations of this Act;

(6) to freeze any monetary instrument or property alleged to be proceed of any unlawful activity;

(7) to implement such measures as may be necessary and justified under this Act to counteract money laundering;

(8) to receive and take action in respect of, any request from foreign states for assistance in their own anti-money laundering operations provided in this Act;

(9) to develop educational programs on the pernicious effects of money laundering, the methods and techniques used in money laundering, the viable means of preventing money laundering and the effective ways of prosecuting and punishing offenders; and

(10) to enlist the assistance of any branch, department, bureau, office, agency or instrumentality of the government, including government-owned and –controlled corporations, in undertaking any and all anti-money laundering operations, which may include the use of its personnel, facilities and resources for the more resolute prevention, detection and investigation of money laundering offenses and prosecution of offenders.

what does the law mean when it says the council "shall act unanimously in the discharge of its functions" as enumerated in the law... does it can act only if the vote of the Council is without any dissent?  just to establish the "true identity of the owner" of any  "monetary instrument or property?  the council must have a 100% vote of approval?

is there no conflict between the above functions of the AMLC and the provision of Section 11 of the Act which limits the authority of the AMLC to inquire into bank deposits?:

Section 11. Authority to inquire into Bank Deposits. – 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 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 involved are in any way related to a money laundering offense: Provided, That this provision shall not apply to deposits and investments made prior to the effectivity of this Act.



without first an conducting an inquiry into or investigating bank deposits....it must first seek an order from a competent court for authority to do that, but it can only seek such authority in a case involving violations of the money laundering Act... but again, how can the AMLC bring such a case for a violation of the Act without first determining that the deposit involves proceeds from an unlawful activity...which it can do only by inquiring into and investigating the bank deposit involved...


ANSWER:

this only means that the AMLC will have to establish the identity of the owner first, and find out if he has a business or the financial capacity to own a monetary instrument or property such as a bank deposit...through appropriate investigation...maybe it can require the owner to submit evidence on such business or financial capacity or to provide information on his legitimate sources of income...

it can do this through the exercise of its funtion under the following provision of the Anti Money laundering Act:

(10) to enlist the assistance of any branch, department, bureau, office, agency or instrumentality of the government, including government-owned and –controlled corporations, in undertaking any and all anti-money laundering operations, which may include the use of its personnel, facilities and resources for the more resolute prevention, detection and investigation of money laundering offenses and prosecution of offenders.


in that  manner, the AMLC can exercise its authority



on the basis of substantial evidence to be in whole or in part, whenever located, representing, involving, or related to, directly or indirectly, in any manner or by any means, the proceeds of an unlawful activity;

the AMLC can do that by:

(10) to enlist the assistance of any branch, department, bureau, office, agency or instrumentality of the government, including government-owned and –controlled corporations, in undertaking any and all anti-money laundering operations, which may include the use of its personnel, facilities and resources for the more resolute prevention, detection and investigation of money laundering offenses and prosecution of offenders.

(2) to issue orders addressed to the appropriate Supervising Authority or the covered institution
to determine the true identity of the owner of any monetary instrument or property
a.subject of a covered transaction report
b.or request for assistance from a foreign State,
c.or believed by the Council,
on the basis of substantial evidence to be in whole or in part, whenever located, representing, involving, or related to, directly or indirectly, in any manner or by any means, the proceeds of an unlawful activity;

 without first going to court to seek authority to inquire into or investigate a bank deposit, which it can only do if there is already a case in court for a violation of the Act...

how can the AMLC come to the belief that a monetary instrument or property represents, involves, or is related to the proceeds of an unlawful activity:
how can the AMLC do the following:
(3) to institute civil forfeiture proceedings and all other remedial proceedings through the Office of the Solicitor General;
(4) to cause the filing of complaints with the Department of Justice or the Ombudsman for the prosecution of money laundering offenses;
(5) to initiate investigations of covered transactions, money laundering activities and other violations of this Act;

freeze order by AMLC

freeze order of deposits:-Saturday, February 11, 2012

Section 10. Authority to Freeze. – Upon determination that probable cause exists that any deposit or similar account is in any way related to an unlawful activity, the AMLC may issue a freeze order, which shall be effective immediately, on the account for a period not exceeding fifteen (15) days.

Notice to the depositor that his account has been frozen shall be issued simultaneously with the issuance of the freeze order.

The depositor shall have seventy-two (72) hours upon receipt of the notice to explain why the freeze order should be lifted.

The AMLC has seventy-two (72) hours to dispose of the depositor's explanation. If it falls to act within seventy-two (72) hours from receipt of the depositor's explanation, the freeze order shall automatically be dissolved.

The fifteen (15)-day freeze order of the AMLC may be extended upon order of the court, provided that the fifteen (15)-day periodUpon determination that probable cause exists that any deposit or similar account is in any way related to an unlawful activity, shall be tolled pending the court's decision to extend the period.

No court shall issue a temporary restraining order or writ of injunction against any freeze order issued by the AMLC except the Court of Appeals or the Supreme Court...

the law states that is only "Upon determination that probable cause exists that any deposit or similar account is in any way related to an unlawful activity," that the AMLC can issue a freeze order...but how can it make that determination... when it has no authority to inquire into bank deposits without order of a competent court in a case involving a violation of the anti-money laundering Act...

does it mean that the AMLC must make such a determination on the basis of facts from available from sources outside of the bank deposits themselves...after all, it has authority to look into the identity of the owner of the account and also it can look into whether or not such owner has a business or financial capacity to own the account...

AUTHORITY OF AMLC TO INQUIRE INTO BANK DEPOSITS.-

inquiry into deposits or investments can be made by AMLC upon order of the Court in money-laundering cases?

on Saturday, February 11, 2012

 

Section 11. Authority to inquire into Bank Deposits. – 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 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 involved are in any way related to a money laundering offense: Provided, That this provision shall not apply to deposits and investments made prior to the effectivity of this Act.

if one just reads the opening sentence of this Section he might think that AMLC can moto proprio inquire into or examine any particular deposit or investment with any banking institution or non-bank financial institution, nothwithstanding the provisions of the laws on the secrecy of bank deposits like RA 1405 as amended by RA 6426 or RA 8791 and other laws...

until he finds out that the AMLC can do that only upon order of any competent court in cases of violation of the ACT... which order can be issued only

when it has been established that there is probable cause that the deposits or investments involved are in any wya related to a money laundering offense....

but the above provision of law cannot even apply to deposits and investments made prior to the effectivity of the Anti-money laundering law....

what kind of law is this...? you have an AMLC that is without power on its own to inquire into or investigate deposits....? what is the use of all the provisions creating this council?

how can it initiate money-laundering charges without first inquiring into or investigating deposits...how would the council know if a violation of the Act has taken place without such an inquiry or investigation?