October 2008 - Philippine Supreme Court Resolutions
Philippine Supreme Court Resolutions
Philippine Supreme Court Resolutions > Year 2008 > October 2008 Resolutions >
[G.R. No. 174629 : October 20, 2008] REPUBLIC OF THE PHILIPPINES, ERE, V. HON. ANTONIO M. EUGENIO, JR., ETC., ET AL.:
[G.R. No. 174629 : October 20, 2008]
REPUBLIC OF THE PHILIPPINES, ERE, V. HON. ANTONIO M. EUGENIO, JR., ETC., ET AL.
Sirs/Mesdames:
Quoted hereunder, for your information, is a resolution of this Court dated 20 October 2008:
G.R. No. 174629 (Republic of the Philippines, etc, v. Hon. Antonio M. Eugenio, Jr., etc., et al.).- This treats of the Motion for Reconsideration dated 7 March 2008 filed by the Office of the Solicitor General (OSG) in behalf of petitioner Republic of the Philippines, seeking reconsideration of the Decision dated 14 February 2008.[1]
To recall, the ruling in the Decision is that in order for the Anti-Money Laundering Council (AMLC) to obtain a bank inquiry order under Section 11 of Republic Act No. (R.A. No.) 9194 (The Anti-Money Laundering Act, as amended, or "AMLA"), it is necessary that there be notice to the owner of the deposits or investments to be examined and; corollarily, that such bank inquiry order may not be issued ex parte. These twin conclusions were bolstered by the absence of any clear language in the law that warranted the ex parte issuance of bank inquiry orders and (he existing statutory principle that established the secrecy of bank deposits as the general rule. The Court likewise rejected the contention of petitioner that the bank inquiry order is akin to a search warrant.
The arguments presented in the Motion for Reconsideration are unable to detract from the basic soundness of the Court's framework in resolving the petition.
The Court has found it quite revelatory that Section 10 of R.A. No. 9194, which pertains to the issuance of freeze orders suspending suspect bank accounts, specifically ordains that such orders can be issued "ex parte", while the succeeding provision, Section 11, does not prescribe the same illiberal requirement on bank inquiry orders. Had Congress been so minded to allow the issuance of bank inquiry orders ex parte, it could have couched Section 11 with ease in the same tenor as it did to the immediately preceding section on freeze orders. Significantly, the current requirements for freeze orders and bank inquiry orders were introduced simultaneously through the same amendatory law. R.A. No. 9194, which amended the previous Anti-Money Laundering Act. Even the implementing rules to R.A. No. 9194, promulgated jointly by the Bangko Sentral ng Pilipinas, the Insurance Commission and the Securities and Exchange Commission do not authorize ex parte applications for bank inquiry orders while specifically allowing the ex parte application with respect to freeze orders.
The OSG cites excerpts from the testimony of the late BSP Governor Rafael Buenaventura at the deliberations before the Bicameral Committee where he urged the adoption of ex parte judicial proceedings with respect to money-laundering cases.[2] The cited excerpts indicate that the Committee Chairman, Rep. Jaime Lopez, was seemingly receptive to the proposal.[3] The cited excerpts, however, are not clear that Buenaventura was referring to bank inquiry orders under Section 11, as indeed he could have been referring to the freeze orders under Section 10. Even assuming that Buenaventura was referring to bank inquiry orders, the fact that Congress did not explicitly ordain ex parte proceedings precisely with the use of the term "ex parte" in Section 10 while it did so in Section 11 indicates that the legislators ultimately rejected the proposal of the BSP Governor,
The OSG goes as far as to argue that "[w]hile the proceedings under Section 11 of AMLA have not been specified as ex parte, neither does it require notice and hearing.[4] That argument either mocks or ignores the very meaning of "ex parte", which has been defined as "a judicial proceeding, order, injunction, etc... when it is taken or granted at the instance and for the benefit of one party only, and without notice to, or contestation by, any person adversely interested."[5]
The OSG again insists that the bank inquiry order is of the same character as a search warrant, the requisites for which are prescribed by the Constitution itself. Certainly, it would be extremely farfetched to assume that the framers of the constitution contemplated bank inquiry orders as they drafted the provision on searches and seizures. We pointed out in our Decision that a bank inquiry order is not a search warrant or a warrant of arrest as it does not involve the seizure of persons or properties. Applications for search warrants or warrants of arrest are necessarily ex parte since they have as their object, the seizure of persons or properties. Ex parte proceedings in such cases would necessarily prevent the person or property owner concerned from evading arrest or disposing of contraband property before the warrant is served. In the same manner, a freeze order which aims to preserve the suspect bank accounts or investments, is sensibly ex parte as prior notice may afford the depositor to withdraw or divest such accounts before the freeze order is issued, thereby nullifying the very intent of such provisional remedy.
Such circumstances do not apply in the case of a bank inquiry order. A bank inquiry order does not contemplate the seizure, but only an inquiry or examination, of the suspect deposits or investments thereto by the AMLC Even if a bank inquiry order is properly issued by a competent court, such order will not preclude the depositor from withdrawing or augmenting the suspect accounts or investments.
Assuming that notice and hearing prior to the issuance of a bank inquiry order would alert the depositor that his/her accounts have been tagged as suspect by the AMLC, the depositor at that point will not be able in any way to conceal any evidence of money-laundering activities. A bank inquiry order issued after due notice and hearing would allow the AMLC to examine the suspicious history of the bank accounts involved within the same scope and breadth as if it were issued ex parte. Even the closure of the bank account by the depositor in reaction to a pending application for a bank inquiry order will not prevent the AMLC, once it obtains such order, from inquiring into the history of the extinct account and proceeding forthwith in the prosecution for violation of the AMLA.
Notably, the Motion for Reconsideration does not challenge the acknowledgment of the Court that the preservation of the secrecy of bank deposits remains the general policy rule, as enshrined in Republic Act No. 1405, or the Bank Secrecy Act. Said law has established a statutory right to privacy with respect to the confidentiality of bank deposits in the Philippines. Still, the Court has not recognized any constitutional right to privacy with respect to bank deposits. As such, Congress is free to legislate exceptions to or dispense with the statutory right to privacy insofar as bank deposits are concerned, subject only to the tests of constitutionality that apply to all other laws as well.
Our Decision has emphasized, thus:
To reiterate, the solution to the concerns raised by the OSG lies with Congress, not this Court. We see no impediment for Congress, should it choose, to amend the AMLA in order to relied the position preferred by the OSG. Our ruling did not detract from the fact that Congress possesses the wisdom and the power to disagree or to legislate a different framework altogether. Yet because the AMLA as written does not accommodate the interpretation insisted by the OSG, it is impolitic for the Court to legislate amendments to the law or to deviate from what the statutory language clearly prescribes.
The Motion for Reconsideration is DENIED with FINALITY. Carpio.J., no part: Austria-Martinez, designated additional member.
G.R. No. 174629 (Republic of the Philippines, etc, v. Hon. Antonio M. Eugenio, Jr., etc., et al.).- This treats of the Motion for Reconsideration dated 7 March 2008 filed by the Office of the Solicitor General (OSG) in behalf of petitioner Republic of the Philippines, seeking reconsideration of the Decision dated 14 February 2008.[1]
To recall, the ruling in the Decision is that in order for the Anti-Money Laundering Council (AMLC) to obtain a bank inquiry order under Section 11 of Republic Act No. (R.A. No.) 9194 (The Anti-Money Laundering Act, as amended, or "AMLA"), it is necessary that there be notice to the owner of the deposits or investments to be examined and; corollarily, that such bank inquiry order may not be issued ex parte. These twin conclusions were bolstered by the absence of any clear language in the law that warranted the ex parte issuance of bank inquiry orders and (he existing statutory principle that established the secrecy of bank deposits as the general rule. The Court likewise rejected the contention of petitioner that the bank inquiry order is akin to a search warrant.
The arguments presented in the Motion for Reconsideration are unable to detract from the basic soundness of the Court's framework in resolving the petition.
The Court has found it quite revelatory that Section 10 of R.A. No. 9194, which pertains to the issuance of freeze orders suspending suspect bank accounts, specifically ordains that such orders can be issued "ex parte", while the succeeding provision, Section 11, does not prescribe the same illiberal requirement on bank inquiry orders. Had Congress been so minded to allow the issuance of bank inquiry orders ex parte, it could have couched Section 11 with ease in the same tenor as it did to the immediately preceding section on freeze orders. Significantly, the current requirements for freeze orders and bank inquiry orders were introduced simultaneously through the same amendatory law. R.A. No. 9194, which amended the previous Anti-Money Laundering Act. Even the implementing rules to R.A. No. 9194, promulgated jointly by the Bangko Sentral ng Pilipinas, the Insurance Commission and the Securities and Exchange Commission do not authorize ex parte applications for bank inquiry orders while specifically allowing the ex parte application with respect to freeze orders.
The OSG cites excerpts from the testimony of the late BSP Governor Rafael Buenaventura at the deliberations before the Bicameral Committee where he urged the adoption of ex parte judicial proceedings with respect to money-laundering cases.[2] The cited excerpts indicate that the Committee Chairman, Rep. Jaime Lopez, was seemingly receptive to the proposal.[3] The cited excerpts, however, are not clear that Buenaventura was referring to bank inquiry orders under Section 11, as indeed he could have been referring to the freeze orders under Section 10. Even assuming that Buenaventura was referring to bank inquiry orders, the fact that Congress did not explicitly ordain ex parte proceedings precisely with the use of the term "ex parte" in Section 10 while it did so in Section 11 indicates that the legislators ultimately rejected the proposal of the BSP Governor,
The OSG goes as far as to argue that "[w]hile the proceedings under Section 11 of AMLA have not been specified as ex parte, neither does it require notice and hearing.[4] That argument either mocks or ignores the very meaning of "ex parte", which has been defined as "a judicial proceeding, order, injunction, etc... when it is taken or granted at the instance and for the benefit of one party only, and without notice to, or contestation by, any person adversely interested."[5]
The OSG again insists that the bank inquiry order is of the same character as a search warrant, the requisites for which are prescribed by the Constitution itself. Certainly, it would be extremely farfetched to assume that the framers of the constitution contemplated bank inquiry orders as they drafted the provision on searches and seizures. We pointed out in our Decision that a bank inquiry order is not a search warrant or a warrant of arrest as it does not involve the seizure of persons or properties. Applications for search warrants or warrants of arrest are necessarily ex parte since they have as their object, the seizure of persons or properties. Ex parte proceedings in such cases would necessarily prevent the person or property owner concerned from evading arrest or disposing of contraband property before the warrant is served. In the same manner, a freeze order which aims to preserve the suspect bank accounts or investments, is sensibly ex parte as prior notice may afford the depositor to withdraw or divest such accounts before the freeze order is issued, thereby nullifying the very intent of such provisional remedy.
Such circumstances do not apply in the case of a bank inquiry order. A bank inquiry order does not contemplate the seizure, but only an inquiry or examination, of the suspect deposits or investments thereto by the AMLC Even if a bank inquiry order is properly issued by a competent court, such order will not preclude the depositor from withdrawing or augmenting the suspect accounts or investments.
Assuming that notice and hearing prior to the issuance of a bank inquiry order would alert the depositor that his/her accounts have been tagged as suspect by the AMLC, the depositor at that point will not be able in any way to conceal any evidence of money-laundering activities. A bank inquiry order issued after due notice and hearing would allow the AMLC to examine the suspicious history of the bank accounts involved within the same scope and breadth as if it were issued ex parte. Even the closure of the bank account by the depositor in reaction to a pending application for a bank inquiry order will not prevent the AMLC, once it obtains such order, from inquiring into the history of the extinct account and proceeding forthwith in the prosecution for violation of the AMLA.
Notably, the Motion for Reconsideration does not challenge the acknowledgment of the Court that the preservation of the secrecy of bank deposits remains the general policy rule, as enshrined in Republic Act No. 1405, or the Bank Secrecy Act. Said law has established a statutory right to privacy with respect to the confidentiality of bank deposits in the Philippines. Still, the Court has not recognized any constitutional right to privacy with respect to bank deposits. As such, Congress is free to legislate exceptions to or dispense with the statutory right to privacy insofar as bank deposits are concerned, subject only to the tests of constitutionality that apply to all other laws as well.
Our Decision has emphasized, thus:
Indeed, by force of statute, all hank 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 pan of the [G]overnment or of any party seeking to enforce those exceptions and inquire into hank deposits. If there are doubts as to 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 preserving the absolutely confidential nature of Philippine bank accounts.[6]
To reiterate, the solution to the concerns raised by the OSG lies with Congress, not this Court. We see no impediment for Congress, should it choose, to amend the AMLA in order to relied the position preferred by the OSG. Our ruling did not detract from the fact that Congress possesses the wisdom and the power to disagree or to legislate a different framework altogether. Yet because the AMLA as written does not accommodate the interpretation insisted by the OSG, it is impolitic for the Court to legislate amendments to the law or to deviate from what the statutory language clearly prescribes.
The Motion for Reconsideration is DENIED with FINALITY. Carpio.J., no part: Austria-Martinez, designated additional member.
Very truly yours,
(Sgd.) LUDICHI YASAY-NUNAG
Clerk of Court
(Sgd.) LUDICHI YASAY-NUNAG
Clerk of Court
Endnotes:
[1] Rollo, pp. 980-1018
[2] Id. at 991-992.
[3] Id. at 993.
[4] Id. at 991.
[5] Black's Law Dictionary (6th ed., 1990), at 576. See also J. A. Sibal. Philippine Legal Dictionary (1991 ed.). "An ex parte legal proceeding is one which is undertaken without notice to any other party or parties."
[6] Rollo.p.971
