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THE
Office of the Solicitor General (OSG) has warned the
Supreme Court (SC) that the country is facing serious
repercussions in its financial transactions with other
countries if it does not set aside its recent decision
requiring notice and hearing prior to the issuance of an
order allowing bank inquiry.
In a
38-page motion for reconsideration, Solicitor General
Agnes Devanadera said the Court’s ruling issued on
February 14, 2008 would weaken the Antimoney Laundering
Council (AMLC) from fulfilling its legal mandate to
ensure the country will not be used as a
money-laundering site for the proceeds of any unlawful
activity.
Devanadera argued that the decision runs counter to the
standards set by the Financial Action Task Force (FATF),
which include the ability to identify and trace the
properties subject of the money laundering inquiry with
expediency.
She
noted that apart from setting up the necessary
legislation, effective implementation of the law carries
equal weight in determining compliance with the FATF
standards.
Devanadera informed the Court that the FATF, which was
established by the Group of Seven nations and has
currently more than 30 member-jurisdictions, could
individually impose drastic counter-measures on the
Philippines if its fails to comply with its standards.
“Worse,
such global perception may revert the Philippines to the
dreaded FATF list of Noncooperative Countries and
Territories (NCCT), a situation that needlessly causes
prejudice to the country’s financial transactions,
including those involving the much- valued foreign
remittances of overseas Filipino workers from abroad,”
the OSG said.
It noted
that in 2000, the Philippines’ inclusion in the FATF
list of noncooperative countries and territories (NCCT)
led the United States Department of the
Treasury/Financial Crimes Enforcement Network (FinCEN)
to issue Advisory 24 imposing an enhanced scrutiny on
Philippine-related transactions, which greatly affected
the correspondent banking relationships of Philippine
banks with its counterparts in the US as it hampered
trade and commerce.
Part of
the counter-measures that may be imposed on the country
include limitation on migration, according to the OSG.
Devandera said the authority to conduct bank inquiry
under Section 11 of the Antimoney Laundering Act (Amla)
was provided to comply with FATF recommendation.
She
explained that the Court’s decision requiring notice and
hearing prior to the issuance of bank inquiry order is
tantamount to alerting the holder of the account
suspected of being used in money-laundering activities.
“With
the rapid technological advances in banking, money can
be electronically transferred in a matter of seconds not
only from one bank to another within a country but also
between jurisdictions. Consequently and inevitably,
there is nothing more to freeze and forfeit because the
money is gone—and possibly gone forever —and the
remedies of freeze and forfeiture will become useless
and meaningless,” the Solicitor General said.
Aside
from this, the OSG insisted that the requirement of
“notice and hearing” in an application for an order of
inquiry will practically deny the AMLC the right to
exercise its authority to inquire into or examine bank
deposits or investments that are related to an unlawful
activity.
Devandera added that the Court decision will result in
“a tedious and protracted proceedings that would defeat
the very purpose for which the inquiry is sought.”
“In
freezing and forfeiting criminal funds and other assets,
time is of the essence. If a bank inquiry order cannot
be availed of ex parte, then this has the effect of
giving advance notice to the asset owner or holder of
the suspect bank account that his account would be
examined and possibly frozen and forfeited later. If
these are indeed criminal proceeds, then the account
owner or holder will, no doubt, withdraw the proceeds
and close his account to extinguish the paper trail,”
the OSG stressed.
In its
February 14 decision, the SC dismissed the petition
filed by the AMLC seeking the immediate implementation
of the orders issued by the regional trials courts in
Manila and Makati, allowing the examination of the bank
accounts of former government officials and private
individuals allegedly involved in the graft-ridden Ninoy
Aquino International Airport (Naia) Terminal III
project.
The
Court reasoned out that Republic Act 9160 or the Amla
does not allow courts to issue ex parte bank inquiry
order or without hearing or notification of the other
parties.
The High
Tribunal ruled that the RTC in Manila did not commit
grave abuse of discretion in issuing the orders dated
July 25, 2006 and August 15, 2006, which deferred the
implementation of its January 12, 2006 order granting
the ex-parte application of AMLC to inquire into 13
accounts and two related web accounts alleged as having
been used to facilitate corruption in the Naia 3
project.
Among
the said accounts were DBS bank account of former
transportation secretary Pantaleon Alvarez and the
Metrobank accounts of Cheng Yong, president of Naia 3
contractor Philippine International Air Terminal Corp.
The AMLC
filed before the RTC in
Makati
an ex-parte application to inquire into the accounts of
the four accused based on the findings of its Compliance
and Investigation Staff (CIS) that amounts were
transferred from a Hong Kong bank account owned by
Jetstream Pacific Ltd. account to bank accounts in the
Philippines maintained by Liongson and Yong.
In her
petition filed before the CA, Lilia Cheng, wife of Yong,
sought to enjoin the RTCs in
Manila and
Makati
from allowing the AMLC to implement their bank inquiry
orders.
Lilia
jointly owns a conjugal bank account with Citibank that
is covered by the Makati RTC inquiry order, and two
conjugal bank accounts with Metrobank that are covered
by the Manila RTC bank inquiry order.
It noted
that Section 11 of Amla does not specifically authorize
the issuance ex parte of the bank inquiry order as
compared with Section 10 (Freezing of Monetary
Instrument or Property).
Although
both are extraordinary provisional reliefs which the
AMLC may avail of to combat money laundering activities,
according to the Court noted that Section 10 uses
specific language to authorize an ex-parte application,
which is absent in Section 11.
But, the
Solicitor General maintained that while the proceedings
under Section 11 of AMLA have not been specified as ex
parte, neither does it require notice and hearing.
Devanadera noted that the congressional deliberations
pertaining to Section 11 disclose an evident intent to
make the issuance of an order allowing bank inquiry “ex
parte.”
She
further stressed that AMLC is authorized to make a bank
inquiry notwithstanding the provisions of Republic Act
No. 1405 (Bank Secrecy Law), upon order of any competent
court and when it has been established that there is
probable cause that the deposits or investments are
related to an unlawful activity or a money laundering
offense.
Thus,
the OSG said the Court should allow the AMLC to conduct
bank inquiry on the accounts of several individuals
believed to have benefited from the anomalous NAIA 3
project. |
