Facts:
Following the
promulgation of Agan, a series of investigations concerning the award of the
NAIA 3 contracts to PIATCO were undertaken by the Ombudsman and the Compliance
and Investigation Staff (CIS) of petitioner AMLC. The 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," and also noting that petitioner Republic of the Philippines was
presently defending itself in two international arbitration cases filed in relation
to the NAIA 3 Project. Alvarez had been the Chairman of the PBAC Technical
Committee of NAIA-IPT3 Project. By this time, Alvarez had already been charged
by the Ombudsman with violation of Section 3(j) of R.A. No. 3019.
AMLC filed an
application to inquire into or examine the deposits or investments of Alvarez,
Trinidad, Liongson, and Cheng Yong before the RTC Makati which was granted.
The Republic,
through the AMLC, filed an application before the Manila RTC to inquire into
and/or examine thirteen 13 accounts and 2 related web of accounts alleged as
having been used to facilitate corruption in the NAIA 3 Project. Among said
accounts were the DBS Bank account of Alvarez and the Metrobank accounts of
Cheng Yong.
Authority was granted
to the AMLC to inquire into the bank accounts listed therein.
Issue:
Whether or not AMLA
is an exception to Sec 2 of the Bank Secrecy Act
Held:
It is evident that
Section 11 does not specifically authorize, as a general rule, the issuance ex
parte of the bank inquiry order.
SEC. 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 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).
To ensure
compliance with this Act, the Bangko Sentral ng Pilipinas (BSP) may inquire
into or examine any deposit of investment with any banking institution or non
bank financial institution when the examination is made in the course of a
periodic or special examination, in accordance with the rules of examination of
the BSP.70 (Emphasis supplied)
Of course, 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. Such special circumstances do not
apply in this case.
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. It might be argued that this silence does not preclude the ex
parte issuance of the bank inquiry order since the same is not prohibited under
Section 11. Yet this argument falls when the immediately preceding provision,
Section 10, is examined.
SEC. 10. Freezing
of Monetary Instrument or Property. ― The Court of Appeals, upon application ex
parte 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
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 twenty (20)
days unless extended by the court.
Although oriented
towards different purposes, the freeze order under Section 10 and the bank
inquiry order under Section 11 are similar in that they are extraordinary provisional
reliefs which the AMLC may avail of to effectively combat and prosecute money
laundering offenses. Crucially, 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.
Even more
tellingly, the current language of Sections 10 and 11 of the AMLA was crafted
at the same time, through the passage of R.A. No. 9194. Prior to the amendatory
law, 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.74 It was through the same enactment
that ex parte proceedings were introduced for the first time into the AMLA, in
the case of the freeze order which now can only be issued by the Court of
Appeals. It certainly would have been convenient, through the same amendatory
law, to allow a similar ex parte procedure in the case of a bank inquiry order
had Congress been so minded. Yet nothing in the provision itself, or even the available
legislative record, explicitly points to an ex parte judicial procedure in the
application for a bank inquiry order, unlike in the case of the freeze order.
There is a right to
privacy governing bank accounts in the Philippines, and that such right finds
application to the case at bar. 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. The right to privacy is enshrined in Section 2 of that law.
Because of the Bank
Secrecy Act, the confidentiality of bank deposits remains a basic state policy
in the Philippines. Subsequent laws, including the AMLA, may have added
exceptions to the Bank Secrecy Act, yet the secrecy of bank deposits still lies
as the general rule. It falls within the zones of privacy recognized by our
laws. The framers of the 1987 Constitution likewise recognized that bank
accounts are not covered by either the right to information under Section 7,
Article III or under the requirement of full public disclosure under Section
28, Article II. Unless the Bank Secrecy Act is repealed or amended, the legal
order is obliged to conserve the absolutely confidential nature of Philippine
bank deposits.
Any exception to
the rule of absolute confidentiality must be specifically legislated. Section 2
of the Bank Secrecy Act itself prescribes exceptions whereby these bank
accounts may be examined by "any person, government official, bureau or
office"; namely when: (1) upon written permission of the depositor; (2) in
cases of impeachment; (3) the examination of bank accounts is upon order of a
competent court in cases of bribery or dereliction of duty of public officials;
and (4) the money deposited or invested is the subject matter of the
litigation. Section 8 of R.A. Act No. 3019, the Anti-Graft and Corrupt
Practices Act, has been recognized by the Court as constituting an additional
exception to the rule of absolute confidentiality, and there have been other
similar recognitions as well.
The AMLA also
provides exceptions to the Bank Secrecy Act. Under Section 11, the AMLC may
inquire into a bank account upon order of any competent court in cases of
violation of the AMLA, it having been established that there is probable cause
that the deposits or investments are related to unlawful activities as defined
in Section 3(i) of the law, or a money laundering offense under Section 4
thereof. Further, in instances where there is probable cause that the deposits
or investments are related to kidnapping for ransom,94 certain violations of the
Comprehensive Dangerous Drugs Act of 2002,95 hijacking and other violations
under R.A. No. 6235, destructive arson and murder, then there is no need for
the AMLC to obtain a court order before it could inquire into such accounts.
It cannot be
successfully argued the proceedings relating to the bank inquiry order under
Section 11 of the AMLA is a "litigation" encompassed in one of the
exceptions to the Bank Secrecy Act which is when "the money deposited or
invested is the subject matter of the litigation." The orientation of the
bank inquiry order is simply to serve as a provisional relief or remedy. As
earlier stated, the application for such does not entail a full-blown trial.
Nevertheless, just
because the AMLA establishes additional exceptions to the Bank Secrecy Act it
does not mean that the later law has dispensed with the general principle
established in the older law that "[a]ll deposits of whatever nature with
banks or banking institutions in the Philippines x x x are hereby considered as
of an absolutely confidential nature." Indeed, by force of statute, all
bank deposits are absolutely confidential, and that nature is unaltered even by
the legislated exceptions referred to above. There is disfavor towards
construing these exceptions in such a manner that would authorize unlimited
discretion on the part of the government or of any party seeking to enforce
those exceptions and inquire into bank deposits. If there are doubts in
upholding the absolutely confidential nature of bank deposits against affirming
the authority to inquire into such accounts, then such doubts must be resolved
in favor of the former. Such a stance would persist unless Congress passes a
law reversing the general state policy of preserving the absolutely
confidential nature of Philippine bank accounts.
The presence of
this statutory right to privacy addresses at least one of the arguments raised
by petitioner, that Lilia Cheng had no personality to assail the inquiry orders
before the Court of Appeals because she was not the subject of said orders.
AMLC Resolution No. 75, which served as the basis in the successful application
for the Makati inquiry order, expressly adverts to Citibank Account No.
88576248 "owned by Cheng Yong and/or Lilia G. Cheng with Citibank
N.A.,"97 whereas Lilia Cheng’s petition before the Court of Appeals is
accompanied by a certification from Metrobank that Account Nos. 300852436-0 and
700149801-7, both of which are among the subjects of the Manila inquiry order,
are accounts in the name of "Yong Cheng or Lilia Cheng."98 Petitioner
does not specifically deny that Lilia Cheng holds rights of ownership over the
three said accounts, laying focus instead on the fact that she was not named as
a subject of either the Makati or Manila RTC inquiry orders. We are reasonably
convinced that Lilia Cheng has sufficiently demonstrated her joint ownership of
the three accounts, and such conclusion leads us to acknowledge that she has
the standing to assail via certiorari the inquiry orders authorizing the
examination of her bank accounts as the orders interfere with her statutory
right to maintain the secrecy of said accounts.
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