BL 314 BANKING LAW 2nd Semester, 3rd Year

COVERED INSTITUTIONS
ANTI-MONEY LAUNDERING ACT Covered Institutions are those mandated by the AMLA to
R.A. 9160, as amended. submit covered and suspicious transaction reports to the
AMLC.
RATIONALE FOR ENACTMENT ★​ Bangko Sentral ng Pilipinas (BSP), Insurance
The Philippines, while striving to sustain economic Commission (IC), Securities and Exchange
development and poverty alleviation through, among Commission (SEC), Designated Non-financial
others, corporate governance and public office Businesses and Professions (DNFBPs)
transparency, must contribute its share and play a vital role ★​ Banks and all other entities, including their
in the global fight against money laundering. Hence, the subsidiaries and affiliates, supervised and
compelling need to enact responsive anti-money laundering regulated by the Bangko Sentral ng Pilipinas
legislation in order to establish and strengthen an ★​ Insurance companies, pre-need companies and all
anti-money laundering regime in the country which will not other institutions supervised or regulated by the
only increase investor’s confidence but also ensure that the Insurance Commission
Philippines is not used as a site to launder proceeds of ★​ Securities dealers and other entities supervised or
unlawful activities. regulated by the Securities and Exchange
Commission
Rule 2. Declaration of Policy. - It is hereby declared the ★​ Casinos and Gaming Operators – Due to their high
policy of the State to protect the integrity and cash flow, casinos are prime targets for money
confidentiality of bank accounts and to ensure that the laundering activities.
Philippines shall not be used as a money laundering site for ★​ Real Estate Brokers and Developers – Large
the proceeds of any unlawful activity. Consistent with its property transactions often facilitate illicit money
foreign policy, the Philippines shall extend cooperation in movement.
transnational investigations and prosecutions of persons ★​ Jewelry and Precious Metal Dealers – High-value
involved in money laundering activities wherever assets like gold and diamonds are frequently used
committed. in laundering schemes.
★​ Law Firms and Accounting Firms – When handling
This set of rules and regulations shall be known as the financial transactions on behalf of clients, these
“2018 Implementing Rules and Regulations” (IRR) of the professionals must comply with AML obligations.
AMLA. ★​ Banks and all other entities, including their
subsidiaries and affiliates, supervised and
1.2. This IRR was promulgated to provide the details of regulated by the Bangko Sentral ng Pilipinas
implementation of the AMLA, as well as to assist all covered ★​ Insurance companies, pre-need companies and all
persons, supervising authorities, law enforcement and other other institutions supervised or regulated by the
government agencies, and other stakeholders by Insurance Commission
prescribing the rules and regulations to combat money ★​ Securities dealers and other entities supervised or
laundering, terrorism financing being a predicate offense to regulated by the Securities and Exchange
money laundering, and other associated unlawful activities. Commission

STATE POLICIES OBLIGATIONS OF COVERED INSTITUTIONS

A.​ To protect and preserve the integrity of the ★​ Covered Institutions are those mandated by the
Philippine financial system, including the AMLA to submit covered and suspicious transaction
confidentiality of bank accounts. reports to the AMLC.
B.​ To ensure that the Philippines shall not be used as
a money laundering site for the proceeds of any (a) Customer Identification. — Covered institutions shall
unlawful activity. establish and record the true identity of its clients based on
C.​ To extend cooperation, consistent with Philippines’ official documents. They shall maintain a system of
foreign policy, in transnational investigations and verifying the true identity of their clients and, in case of
prosecutions of persons involved in money corporate clients, require a system of verifying their legal
laundering activities wherever committed, as well existence and organizational structure, as well as the
as in the implementation of targeted financial authority and identification of all persons purporting to act
sanctions related to the financing of the on their behalf.
proliferation of weapons of mass destruction,
terrorism, and terrorism financing, pursuant to the (b) Record Keeping. — All records of all transactions of
resolutions of the United Nations Security Council. covered institutions shall be maintained and safely stored
D.​ To protect life, liberty and property from acts of for five (5) years from the dates of transactions. With
terrorism and to condemn terrorism and those who respect to closed accounts, the records on customer
support and finance it; and to recognize it as identification, account files and business correspondence,
inimical and dangerous to national security and the shall be preserved and safely stored for at least five (5)
welfare of the people; and to make the financing of years from the dates when they were closed.
terrorism a crime against the Filipino people,
against humanity and against the law of nations. (c) Reporting of Covered Transactions. — Covered
E.​ To recognize and to adhere to international institutions shall report to the AMLC all covered transactions
commitments to combat the financing of terrorism, within five (5) working days from occurrence thereof, unless
specifically to the International Convention for the the Supervising Authority concerned prescribes a longer
Suppression of the Financing of Terrorism, as well period not exceeding ten (10) working days.
as other binding terrorism related resolutions of
the United Nations Security Council, pursuant to Non-compliance with AMLA regulations can result in hefty
Chapter 7 of the United Nations Charter. fines, reputational damage, and even criminal liability.
F.​ To reinforce the fight against terrorism by Therefore, AMLA-covered institutions must prioritize
preventing and suppressing the commission of said compliance through advanced technologies and best
offenses through freezing and forfeiture of practices.
property or funds while protecting human rights.
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COVERED TRANSACTIONS
“Transaction” refers to any act establishing any right or A. Regional Trial Court. - The regional trial courts
obligation, or giving rise to any contractual or legal shall have jurisdiction to try money laundering
relationship between the parties thereto. It also includes cases committed by private individuals, and public
any movement of funds by any means with a covered officers not covered by the jurisdiction of the
person. Sandiganbayan.
1.​ A transaction in cash or other equivalent monetary
instrument exceeding Five Hundred Thousand B. Sandiganbayan. - The Sandiganbayan shall
pesos (Php500,000.00) have jurisdiction to try money laundering cases
2.​ A transaction exceeding One Million pesos committed by public officers under its jurisdiction,
(Php1,000,000.00) in cases of jewelry dealers, and private persons who are in conspiracy with
dealers in precious metals and dealers in precious such public officers.
stones.
UNLAWFUL ACTIVITIES AND PREDICATE CRIMES
SUSPICIOUS TRANSACTIONS ★​ Unlawful Activity is the offense which generates
“Suspicious Transaction” refers to a transaction, dirty money or property. It is commonly called the
regardless of amount, where any of the following predicate crime. It refers to any act or omission or
circumstances exists: series or combination thereof involving or having
1.​ there is no underlying legal or trade obligation, direct relation to the following:
purpose or economic justification; 1.​ Kidnapping for ransom
2.​ the client is not properly identified; 2.​ Drug trafficking and related offenses
3.​ the amount involved is not commensurate with the 3.​ Graft and corrupt practices
business or financial capacity of the client; 4.​ Plunder
4.​ taking into account all known circumstances, it 5.​ Robbery and Extortion
may be perceived that the client’s transaction is 6.​ Jueteng and Masiao
structured in order to avoid being the subject of 7.​ Piracy
reporting requirements under the AMLA; 8.​ Qualified theft
5.​ any circumstance relating to the transaction which 9.​ Swindling
is observed to deviate from the profile of the client 10.​ Smuggling
and/or the client’s past transactions with the 11.​ Violations under the Electronic Commerce
covered person; Act of 2000
6.​ the transaction is in any way related to an unlawful 12.​ Hijacking; destructive arson; and murder,
activity or any money laundering activity or offense including those perpetrated by terrorists
that is about to be committed, is being or has been against non-combatant persons and
committed; or similar targets
7.​ any transaction that is similar, analogous or 13.​ Fraudulent practices and other violations
identical to any of the foregoing. under the Securities Regulation Code of
2000
MONEY LAUNDERING 14.​ Felonies or offenses of a similar nature
★​ Money Laundering is a crime whereby the proceeds that are punishable under the penal laws
of an unlawful activity as defined in the AMLA are of other countries.
transacted or attempted to be transacted to make 15.​ Terrorism financing and organizing or
them appear to have originated from legitimate directing others to commit terrorism
sources. financing (R.A. 10168).
★​ Rule 4. Money Laundering. - Money laundering is 16.​ Attempt/conspiracy to commit terrorism
committed by: financing and organizing or directing
others to commit terrorism financing (R.A.
A. Any person who, knowing that any monetary 10168).
instrument or property represents, involves, or 17.​ Attempt/conspiracy to commit dealing
relates to the proceeds of any unlawful activity: with property or funds of a designated
person.
1.​ transacts said monetary instrument or 18.​ Accomplice to terrorism financing or
property; conspiracy to commit terrorism financing.
2.​ converts, transfers, disposes of, moves, 19.​ Accessory to terrorism financing.
acquires, possesses or uses said monetary
instrument or property;
3.​ conceals or disguises the true nature, ANTI-MONEY LAUNDERING COUNCIL
source, location, disposition, movement or The AMLC is composed of the Governor of the BSP as
ownership of or rights with respect to said Chairperson, and the Commissioner of the IC and the
monetary instrument or property; Chairperson of the SEC, as Members.
4.​ attempts or conspires to commit money
laundering offenses referred to in (1), (2), ★​ The AMLC shall act unanimously in the discharge of
or (3) above; its functions. In case of incapacity, absence, or
5.​ aids, abets, assists in, or counsels the disability of any member, the officer duly
commission of the money laundering designated or authorized to discharge the functions
offenses referred to in (1), (2), or (3) of the Governor of the BSP, the Commissioner of
above; and the IC, and the Chairperson of the SEC, as the
6.​ performs or fails to perform any act as a case may be, shall act in his stead in the AMLC.
result of which he facilitates the offense of
money laundering referred to in (1), (2), FUNCTIONS OF ANTI-MONEY LAUNDERING COUNCIL
or (3) above. 1.​ to require and receive covered or suspicious
transaction reports from covered persons;
B. Any covered person who, knowing that a 2.​ to issue orders addressed to the appropriate
covered or suspicious transaction is required under Supervising Authority or the covered person to
the AMLA to be reported to the AMLC, fails to do determine the true identity of the owner of any
so. monetary instrument or property subject of a
covered or suspicious transaction report, or
★​ Rule 5. Jurisdiction over Money Laundering Cases. request for assistance from a foreign State, or
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 believed by the AMLC, on the basis of substantial there is probable cause that the deposits or
evidence, to be, in whole or in part, wherever investments involved are in any way related to a
located, representing, involving, or related to, money laundering offense.
directly or indirectly, in any manner or by any
means, the proceeds of any unlawful activity;
3.​ to institute civil forfeiture proceedings and all other SAFE HARBOR PROVISION
remedial proceedings through the Office of the ★​ Section 5. Safe Harbor Provision - No
Solicitor General; administrative, criminal or civil proceedings shall
4.​ to file complaints with the Department of Justice or lie against any person for having made a CTR or an
the Office of the Ombudsman for the prosecution STR in the regular performance of his duties and in
of money laundering offenses and other violations good faith, whether or not such reporting results in
under the AMLA; any criminal prosecution under the AMLA or any
5.​ to investigate suspicious transactions and covered other Philippine law.
transactions deemed suspicious after investigation ★​ This provision encourages covered persons to
by the AMLC, money laundering activities and vigorously report covered and suspicious
other violations of the AMLA; transactions as there is a legal assurance that they
6.​ to file with the Court of Appeals, ex parte, through shall not be held administratively, criminally, or
the Office of the Solicitor General: civilly liable for filing covered and suspicious
a.​ a petition for the freezing of any monetary transaction reports in the regular performance of
instrument or property that is in any way his duties and in good faith.
related to an unlawful activity; or
b.​ an application for authority to inquire into R.A. No. 9194, R.A. No. 10167, R.A. No. 10365, R.A.
or examine any particular deposit or No. 10927
investment, including related accounts,
with any banking institution or non-bank ★​ R.A. No. 9194 – An Act Amending Republic Act No.
financial institution. 9160, Otherwise Known as the Anti-Money
7.​ to formulate and implement such measures as may Laundering Act of 2001
be necessary and justified under the AMLA to ○​ This law strengthens the Anti-Money
counteract money laundering. Laundering Act (AMLA) of 2001 by
8.​ to receive and take action in respect of any request expanding the definition of money
from foreign states for assistance in their own laundering, requiring covered institutions
anti-money laundering operations as provided in to report suspicious transactions, and
the AMLA. enhancing the authority of the Anti-Money
9.​ to develop educational programs, including Laundering Council (AMLC) to investigate
awareness campaign on the pernicious effects, the financial crimes.
methods and techniques used, and the viable ★​ R.A. No. 10167 – An Act to Further Strengthen the
means of preventing money laundering and the Anti-Money Laundering Law, Amending for the
effective ways of prosecuting and punishing Purpose Republic Act No. 9160, as Amended
offenders; ○​ This law further strengthens the AMLA by
10.​ to enlist the assistance of any branch, department, allowing the AMLC to conduct ex parte
bureau, office, agency or instrumentality of the (without notifying the subject) inquiries
government, including government-owned and on suspicious accounts with court
-controlled corporations, in undertaking any and all approval. It also lowers the threshold for
anti-money laundering operations, which may covered transactions and increases
include the use of its personnel, facilities and penalties for non-compliance.
resources for the more resolute prevention, ★​ R.A. No. 10365 – An Act Further Strengthening the
detection and investigation of money laundering Anti-Money Laundering Law, Amending for the
offenses and prosecution of offenders. Purpose Republic Act No. 9160, as Amended.
11.​ to impose administrative sanctions for the violation ○​ This amendment broadens the coverage
of laws, rules, regulations, orders, and resolutions of AMLA by including more financial
issued pursuant thereto. institutions and professions (such as
12.​ to require the Land Registration Authority and all casinos, real estate brokers, and dealers
its Registries of Deeds to submit to the AMLC, of precious stones) under its jurisdiction.
reports on all real estate transactions involving an It also improves international cooperation
amount in excess of Five Hundred Thousand Pesos in fighting money laundering.
(Php500,000.00) within fifteen (15) days from the ★​ R.A. No. 10927 – An Act Designating Casinos as
date of registration of the transaction, in a form to Covered Persons Under Republic Act No. 9160, as
be prescribed by the AMLC. The AMLC may also Amended, Otherwise Known as the Anti-Money
require the Land Registration Authority and all its Laundering Act of 2001
Registries of Deeds to submit copies of relevant ○​ This law explicitly includes casinos (both
documents of all real estate transactions. land-based and online) as "covered
persons" under AMLA, requiring them to
FREEZING OF MONETARY INSTRUMENT OR PROPERTY report large and suspicious transactions.
★​ The AMLC may file before the Court of Appeals, This amendment was made to comply
before the verified application ex parte (without with international Financial Action Task
notice to the other party) after determination that Force (FATF) standards.
probable cause exists that any monetary
instrument or property is in any way related to an
unlawful activity. The freeze order shall be effective CASES
immediately. The freeze order shall be for a period
of 20 days unless extended by the court. ★​ PDIC VS. Gidwani, June 20, 2018 (money
laundering)
AUTHORITY TO INQUIRE INTO BANK DEPOSITS
★​ The AMLC may inquire into or examine any Facts
particular deposit or investment with any banking The Philippine Deposit Insurance Corporation (PDIC)
institution or non-bank financial institution upon claimed that Manu Gidwani and his wife, together with 86
order of any competent court in cases of violation
of the AMLA when it has been established that
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individuals, falsely represented themselves as owners of identified in the handling of the insurance claims and the
471 deposit accounts in Legacy Banks. fraudulent representation made by the individuals involved.
It underscored that the presumption of ownership could not
PDIC processed their claims, resulting in the issuance of easily be challenged by mere allegations, hence highlighting
683 checks totaling P98,733,690.21 meant for the 86 the necessity for a comprehensive examination during the
individuals. trial concerning the authenticity of the depositors' claims
and the validity of the alleged fund management agreement
Despite the checks being marked "Payable to the Payee's proposed by Manu Gidwani. As a result, the case continues
Account Only," they were deposited into a single account to unravel critical questions regarding fraud prevention and
owned by Manu Gidwani. the accountability of financial entities in safeguarding
depositors' interests.
PDIC discovered discrepancies suggesting that the accounts
were not held by the purported owners, leading to a ★​ Republic vs. Cabrini Green and Ross, 5 May
criminal complaint for estafa and money laundering against 2005 (freezeorder)
the Gidwani spouses and the 86 individuals.
Facts
Issues The Anti-Money Laundering Council (AMLC) issued freeze
★​ Whether the Court of Appeals erred in orders against various bank accounts of respondents, which
acknowledging Manu Gidwani's petition without were found prima facie to be related to unlawful activities.
requiring him to file a motion for reconsideration
prior to the petition. Under RA 9160, a freeze order issued by the AMLC is
★​ Whether the findings of the DOJ, which determined effective for 15 days unless extended by the court.
no probable cause for criminal charges, were valid
considering the evidence provided by PDIC. The AMLC filed petitions with the Court of Appeals (CA) to
extend the effectivity of its freeze orders.
Ruling/Ratio
The Supreme Court granted PDIC's petition, reinstating the The CA dismissed the petitions, ruling that it was not vested
DOJ's resolution that found probable cause to charge Manu with the power to extend freeze orders issued by the AMLC
Gidwani with estafa and money laundering. under RA 9160.

The Court emphasized that the allegations of PDIC, Congress enacted RA 9194, amending RA 9160, to clarify
including the misrepresentation of account ownership and that the CA has the authority to issue and extend freeze
the subsequent fraudulent claims for deposit insurance, orders.
were serious enough to warrant trial.
Issues
The presumption of ownership over the deposit accounts Which court has jurisdiction to extend the effectivity of a
was not sufficient to dismiss the allegations against Manu, freeze order issued by the AMLC?
as the nature of the transactions indicated potential fraud
involving multiple parties. Ruling/Ratio
The Supreme Court dismissed G.R. No. 154694 for being
Summary moot and remanded G.R. Nos. 154522, 155554, and
The case involves the Philippine Deposit Insurance 155711 to the Court of Appeals for appropriate action.
Corporation (PDIC) against Manu Gidwani regarding alleged The Court maintained the temporary restraining order
fraudulent activities related to deposit accounts within issued on April 21, 2003, pending the resolution by the
several rural banks controlled by the Legacy Group of Court of Appeals.
Companies. Manu, along with his wife and eighty-six others,
were found to have filed insurance claims on a total of four The amendment by RA 9194 clarified that the CA has the
hundred seventy-one accounts, claiming ownership that exclusive jurisdiction to issue and extend freeze orders
would entitle them to substantial deposit insurance. The related to money-laundering activities
total claims amount to ₱98,733,690.21, but PDIC contends
that these accounts were actually controlled by the Gidwani Summary
couple. The Anti-Money Laundering Council (AMLC) issued freeze
orders on various bank accounts linked to unlawful
PDIC's main argument rests on evidence suggesting that activities. These freeze orders, according to RA 9160, were
142 of the total accounts were in the names of individuals initially effective for 15 days unless extended by a court
who lacked the financial capacity to maintain such deposits. order. The AMLC filed petitions with the Court of Appeals
Furthermore, it was discovered that advance interests were (CA) to extend these orders, believing the CA had the
paid to Manu Gidwani, despite the accounts being authority to do so.
registered under different names. PDIC claims that the
documented structure was a façade orchestrated by the The CA, however, dismissed the petitions, stating it did not
Gidwani spouses to maximize their insurance coverage have the jurisdiction to extend the freeze orders. This led to
while circumventing the law, which limits individual the filing of consolidated petitions to determine which court
coverage to ₱250,000.00 under the PDIC charter. had the jurisdiction to extend the effectivity of a freeze
order. During the pendency of these petitions, RA 9194 was
The case went through various levels of judicial scrutiny, enacted, amending RA 9160 and clarifying that the CA had
including a preliminary investigation led by the Department the exclusive authority to issue and extend freeze orders.
of Justice (DOJ) Task Force. Initially, the DOJ found no
probable cause to charge Manu or the other respondents. Following the enactment of RA 9194, the Office of the
However, in subsequent resolutions, the Secretary of Justice Solicitor General (OSG) filed a motion to remand the cases
reversed this decision, asserting that there was sufficient to the CA and requested a temporary restraining order
evidence to proceed with charges of estafa and money (TRO) to prevent the automatic lifting of the freeze orders.
laundering. The Court of Appeals later ruled that SOJ The Supreme Court issued a TRO to maintain the existing
Caparas had abused his discretion in finding probable freeze orders until further notice and remanded the cases to
cause, which prompted PDIC to appeal to the Supreme the CA for appropriate action.
Court for a review.
The Supreme Court ultimately dismissed G.R. No. 154694
In the end, the Supreme Court reinstated the findings of for being moot, as the CA had already granted the
the Secretary of Justice, emphasizing the irregularities extension of the freeze order. The other cases (G.R. Nos.
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154522, 155554, and 155711) were remanded to the CA violated due process. The Court held that while the freeze
for resolution. The ruling emphasized that the CA has the order was justified based on probable cause, its extension
exclusive jurisdiction to extend existing freeze orders issued must be limited to six months unless renewed with
by the AMLC, thereby resolving the jurisdictional issue. appropriate justification. The Court underscored the balance
between the individual's right to due process and the
★​ Ligot vs. Republic, 6 March 2013 (freeze government's interest in curbing criminality.
order)
Consequently, the petition was granted, and the freeze
Facts order issued by the CA was lifted. The case was remanded
The AMLC filed an Urgent Ex-Parte Application for a freeze to the Regional Trial Court of Manila for consolidation with
order against the Ligots' properties based on probable the pending civil forfeiture proceedings. The Supreme
cause of involvement in unlawful activities. Court's decision highlighted the necessity of adhering to
constitutional principles even in the pursuit of noble
The Court of Appeals (CA) issued a freeze order on July 5, objectives such as anti-corruption efforts.
2005, extended indefinitely on January 4, 2006.
★​ Republic vs. Eugenio, 14 February 2008
The Ligots filed motions to lift the freeze order, claiming (AMLC to inquie deposit; ex post facto clause)
lack of evidence and due process violations.
Facts
Issues The case involves the Republic of the Philippines,
●​ Whether the CA committed grave abuse of represented by the Anti-Money Laundering Council (AMLC),
discretion in extending the freeze order without against Hon. Antonio M. Eugenio, Jr., Pantaleon Alvarez, and
proven predicate crime. Lilia Cheng.
●​ Whether the freeze order's extension beyond six
months violated due process. The controversy arose from the investigation into the Ninoy
Aquino International Airport Terminal 3 (NAIA 3) Project,
Ruling/Ratio following the nullification of the concession agreement
The Supreme Court ruled in favor of the Ligots, finding that awarded to the Philippine International Airport Terminal
the CA extended the freeze order beyond the permissible Corporation (PIATCO).
period, violating due process.
The AMLC sought to examine bank accounts related to
The freeze order cannot be indefinite; the AMLC must file alleged corruption in the NAIA 3 Project, including those of
appropriate charges within a reasonable time. Pantaleon Alvarez, who had been charged with violating
Section 3(j) of R.A. No. 3019.
The Court emphasized the need to balance individual rights
and the government's anti-corruption efforts, stressing The AMLC issued resolutions authorizing the inquiry into
adherence to constitutional principles. specific bank accounts. The Manila RTC granted the AMLC's
ex parte application to inquire into these accounts.
The petition was granted, and the freeze order was lifted,
with instructions for the CA to remand the case to the Alvarez and Cheng contested the ex parte inquiry orders,
Regional Trial Court of Manila for consolidation with pending leading to a series of legal challenges and court orders
civil forfeiture proceedings. staying the enforcement of the bank inquiry orders.

Summary Issues
In the case of Ligot vs. Republic of the Philippines, the ●​ Whether the AMLC can apply for a bank inquiry
petitioners, retired Lt. Gen. Jacinto C. Ligot and his family, order ex parte under Section 11 of the Anti-Money
challenged the Court of Appeals (CA) resolution that Laundering Act (AMLA).
extended the freeze order on their properties indefinitely. ●​ Whether the ex parte bank inquiry order violates
The Republic, represented by the Anti-Money Laundering the right to due process and the right to privacy.
Council (AMLC), initiated the freeze order under Republic ●​ Whether the AMLC can inquire into bank accounts
Act (RA) No. 9160, the Anti-Money Laundering Act of 2001. opened before the enactment of the AMLA without
violating the prohibition against ex post facto laws.
The freeze order was applied for following an investigation
triggered by a recommendation from the Office of the Ruling/Ratio
Ombudsman. The Ombudsman's complaint alleged that Lt. The Supreme Court held that Section 11 of the AMLA does
Gen. Ligot and his family had amassed unexplained wealth not generally authorize the issuance of bank inquiry orders
far exceeding his legitimate income as an officer in the ex parte. The Court emphasized the need for notice to the
Armed Forces of the Philippines (AFP). The properties and account holder to contest the probable cause for the
bank accounts in question were suspected to be proceeds of inquiry.
unlawful activities, including violations of the Anti-Graft and
Corrupt Practices Act. The Court found that the AMLC's ex parte application for a
bank inquiry order violated the account holders' right to due
Lt. Gen. Ligot argued that the CA committed grave abuse of process.
discretion by extending the freeze order without a predicate
crime being proven. He also contended that the freeze The Court ruled that applying the bank inquiry order to
order should have been limited to six months as per the accounts opened before the AMLA's enactment would
Rule in Civil Forfeiture Cases, and that the indefinite violate the constitutional prohibition against ex post facto
extension violated their right to due process. laws. However, the inquiry is permissible for transactions
conducted after the AMLA took effect.
The Republic countered that probable cause existed for the
freeze order and that it was unnecessary for a formal The Court annulled the ex parte bank inquiry orders and
criminal charge to precede the freeze order. They remanded the case for further proceedings consistent with
emphasized that the freeze order was necessary to prevent its ruling.
the dissipation of assets potentially linked to unlawful
activities. Summary
The case involves the Republic of the Philippines,
The Supreme Court ruled in favor of Lt. Gen. Ligot, finding represented by the Anti-Money Laundering Council (AMLC),
that the CA's indefinite extension of the freeze order as the petitioner, against Judge Antonio M. Eugenio, Jr.,
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Pantaleon Alvarez, and Lilia Cheng as respondents. The
petition questions the orders and resolutions issued by the The law provides for post-issuance remedies for account
Regional Trial Court (RTC) of Manila and the Court of holders to contest the inquiry order, ensuring due process is
Appeals regarding the examination of certain bank respected.
accounts.
Summary
Following the nullification of the concession agreement In the case of Subido Pagente Certeza Mendoza and Binay
awarded to the Philippine International Airport Terminal Law Offices v. Court of Appeals, the petitioners challenged
Corporation (PIATCO) for the NAIA 3 Project, investigations the constitutionality of Section 11 of Republic Act No. 9160,
were conducted by the Ombudsman and the AMLC. The known as the Anti-Money Laundering Act (AMLA), as
AMLC discovered multiple bank accounts associated with amended. This section allows the Anti-Money Laundering
Pantaleon Alvarez, a former official involved in the project, Council (AMLC) to file an ex-parte application with the Court
and resolved to authorize an inquiry into these accounts. of Appeals (CA) to inquire into bank deposits and
investments based on probable cause.
The AMLC filed applications in the RTC of Manila and Makati
to examine the bank accounts of Alvarez and other The case arose in 2015, amid reports of disproportionate
individuals. The RTCs issued orders granting these wealth involving then Vice President Jejomar Binay and his
applications, which were later challenged by the family. The AMLC sought to investigate the bank accounts of
respondents on the grounds of procedural irregularities and the Binays, including those of the law firm where Binay's
violations of their rights. The Court of Appeals issued a daughter was a former partner. The petitioners argued that
Temporary Restraining Order (TRO) to prevent the the ex-parte proceedings violated their rights to due
implementation of the bank inquiry orders. process and privacy.

The Supreme Court examined the validity of the bank The Supreme Court addressed the procedural and
inquiry orders and the procedural requirements under the substantive issues raised by the petitioners. Procedurally,
Anti-Money Laundering Act (AMLA). It was determined that the Court noted that the petition was brought directly from
the AMLA does not generally sanction ex parte applications a letter by the Presiding Justice of the CA and that the
for bank inquiry orders, and the respondents must be given petitioners did not need to implead Congress to question
notice and the opportunity to be heard. The Court the constitutionality of the law. Substantively, the Court
emphasized the importance of protecting the right to examined whether the ex-parte application for a bank
privacy and the confidentiality of bank deposits, as inquiry order under Section 11 violated due process.
enshrined in the Bank Secrecy Act.
The Court upheld the constitutionality of Section 11, stating
Ultimately, the Supreme Court dismissed the petition, ruling that the ex-parte application process is investigative rather
that the bank inquiry orders were invalid due to procedural than adjudicatory. It emphasized that the procedure
violations and the lack of proper notice to the account requires a finding of probable cause by the CA, ensuring
holders. The decision underscored the need to balance the compliance with constitutional safeguards. The Court also
government's authority to combat money laundering with noted that the AMLC's actions are aimed at preventing the
the protection of individual rights and the confidentiality of dissipation of funds potentially linked to unlawful activities
bank accounts. before a freeze order can be issued.

★​ Subido Pagente vs. Court of Appeals, In conclusion, the Supreme Court denied the petition and
December 6, 2016(constitutionality of Section declared Section 11 of the AMLA valid and constitutional.
11) The decision highlighted the importance of maintaining the
integrity of financial investigations while balancing the
Facts rights of individuals under scrutiny. The Court directed the
The Anti-Money Laundering Council (AMLC) requested the CA to draft rules to complement existing procedures for
Court of Appeals (CA) to authorize an inquiry into the bank handling bank inquiry orders.
accounts of Subido Pagente Certeza Mendoza & Binay Law
Offices (SPCMB). ★​ Republic vs. Bolante, April 17, 2017 (probable
cause)
The request was part of investigations into then Vice
President Jejomar Binay's alleged unexplained wealth. Facts
In April 2005, Philippine National Bank (PNB) submitted
SPCMB sought to confirm reports regarding this inquiry and suspicious transaction reports to the Anti-Money Laundering
challenged the constitutionality of the inquiry process under Council (AMLC) involving accounts of Livelihood Corporation
Section 11 of the Anti-Money Laundering Act (AMLA). (LIVECOR), Molugan Foundation, and Assembly of Gracious
Samaritans, Inc. (AGS).
Issues
●​ Whether the ex-parte inquiry authorized by the LIVECOR transferred significant amounts to Molugan and
AMLC into bank deposits of SPCMB violates due AGS between 2004 and 2005.
process and the right to privacy.
●​ Whether Section 11 of the AMLA allowing the AMLC Senate Committee Report No. 54 indicated massive
to file ex-parte applications for bank inquiries is irregularities in the use of the P728 million fertilizer fund,
constitutional. including overpricing and violations of procurement laws.
The AMLC sought to freeze the bank deposits and
Ruling/Ratio investments of the respondents, including Jocelyn I.
The Supreme Court upheld the constitutionality of Section Bolante, believed to be related to the fertilizer fund scam.
11 of the AMLA, affirming AMLC's authority to conduct
inquiries based on probable cause. Issues
●​ Whether the Republic committed forum shopping
The court noted that the potential violation of privacy must in filing CA-G.R. AMLC No. 00024 before the Court
be balanced against the need for the government to of Appeals.
investigate unlawful activities. ●​ Whether the Regional Trial Court (RTC) committed
grave abuse of discretion in ruling that there was
It clarified that the bank inquiry order does not serve as a no probable cause to allow an inquiry into the bank
general warrant and requires established probable cause deposits and investments of the respondents.
related to unlawful activities.
6
Ruling/Ratio
The Supreme Court found that the Republic committed
forum shopping. The petitions in CA-G.R. AMLC No. 00014
and CA-G.R. AMLC No. 00024 involved the same parties,
subject matter, and causes of action.

The RTC did not commit grave abuse of discretion in

denying the application for inquiry into the respondents'
bank deposits and investments. The evidence presented,
including the Senate Committee Report No. 54, lacked
sufficient probative value, and the COA audit report showed
no funds were channeled to LIVECOR.

The petitions in G.R. No. 186717 and G.R. No. 190357 were
denied and dismissed, respectively. The Court of Appeals'
resolution and the RTC's resolutions were affirmed.

Summary
In the consolidated cases of G.R. Nos. 186717 and 190357,
the Republic of the Philippines, represented by the
Anti-Money Laundering Council (AMLC), sought to
investigate and freeze the bank deposits and investments of
various respondents, including Jocelyn I. Bolante and
several associated entities. The cases arose from suspicious
transactions reported by the Philippine National Bank (PNB)
involving transfers of substantial amounts of money without
underlying legal or trade obligations.

The AMLC initially obtained a freeze order from the Court of

Appeals (CA) but sought an extension of this order, which
was denied by the CA on the grounds of forum shopping.
The CA found that the AMLC had already filed a similar
petition in a previous case (CA-G.R. AMLC No. 00014) and
the issues and parties involved in the new petition (CA-G.R.
AMLC No. 00024) were identical to those in the earlier case,
thus constituting forum shopping.

The Regional Trial Court (RTC) of Makati also denied the

AMLC's application for an inquiry into the respondents' bank
deposits and investments, citing a lack of probable cause to
believe that the funds were related to any unlawful activity.
The RTC noted that the evidence presented by the AMLC,
including Senate Committee Report No. 54 and the
testimony of an AMLC witness, was insufficient and largely
unverified.

In its final ruling, the Supreme Court affirmed the decisions

of both the CA and the RTC. The Court upheld the CA's
finding of forum shopping and the RTC's determination that
there was no probable cause to allow an inquiry into the
respondents' bank accounts. Consequently, the petitions
filed by the Republic in G.R. Nos. 186717 and 190357 were
denied, and the previously issued Status Quo Ante Order
was lifted.

References:
http://www.amlc.gov.ph/2-uncategorised/20-amlaglance
http://www.amlc.gov.ph/laws/money-laundering/2021-02-0
3-14-02-32/2016-revised-implementing-rules-and-regulatio
ns-of-republic-act-no-9160-as-amended
http://www.amlc.gov.ph/2-uncategorised/55-revised-imple
menting-rules-and-regulations-of-republic-act-no-9160
http://www.amlc.gov.ph/laws/money-laundering/2015-10-1
6-02-50-56/republic-act-9160
https://www.tookitaki.com/compliance-hub/understanding-
amla-covered-institutions
http://www.amlc.gov.ph/images/PDFs/2021-AMLC%20REGI
STRATION%20AND%20REPORTING%20GUIDELINES.pdf
FINAL2018 IRR.pdf
2021 NSJDJSFJSD im eya i’m tired