MERCANTILE FOREIGN INVESTMENTS ACT

Introductory*Concepts* Any!exception!to!the!rule!of!absolute!confidentiality!must!
! be! specifically! legislated.! Section! 2! of! the! Bank! Secrecy!
Governing*Laws* Act! itself! prescribes! exceptions! whereby! these! bank!
R.A.!No.!9160!–!Anti/Money!Laundering!Act!of!2001,!as! accounts!may!be!examined!by!"any!person,!government!
amended! official,!bureau!or!office";!namely!when:!(1)!upon!written!
! permission! of! the! depositor;! (2)! in! cases! of!
R.A.!No.!9194!–!An!Act!Amending!Act!No.!9160! impeachment;! (3)! the! examination! of! bank! accounts! is!
! upon! order! of! a! competent! court! in! cases! of! bribery! or!
R.A.!No.!10365!–!Amendment!to!R.A.!No.!9160! dereliction!of!duty!of!public!officials;!and!(4)!the!money!
! deposited! or! invested! is! the! subject! matter! of! the!
R.A.!No.!10167!–!An!act!to!further!strengthen!the!AMLA,! litigation.! Section! 8! of! R.A.!Act! No.! 3019,! the!Anti/Graft!
amending!for!the!purpose!sections!10!and!11!of!RA!9160! and! Corrupt! Practices! Act,! has! been! recognized! by! this!
! Court!as!constituting!an!additional!exception!to!the!rule!
2016! Revised! Implementing! Rules! and! Regulations! of! of! absolute! confidentiality,!A! subsequent! law,!the!
Republic! Act! No.! 9160,! as! Amended,! [September! 21,! Ombudsman!Act!of!1989,!contains!a!provision!relating!to!
2016])! "access!to!bank!accounts!and!records."!!
*
The!AMLA!also!provides!exceptions!to!the!Bank!Secrecy!
State*Policy*
Act.!Under!Section!11,!the!AMLC!may!inquire!into!a!bank!
It!is!hereby!declared!the!policy!of!the!State!to!protect!and!
account! upon! order! of! any! competent! court! in! cases! of!
preserve! the! integrity! and! confidentiality! of! bank!
violation! of! the! AMLA,! it! having! been! established! that!
accounts!and!to!ensure!that!the!Philippines!shall!not!be!
there!is!probable!cause!that!the!deposits!or!investments!
used!as!a!money!laundering!site!for!the!proceeds!of!any! are!related!to!unlawful!activities!as!defined!in!Section!3!
unlawful!activity.!Consistent!with!its!foreign!policy,!the! (i)! of! the! law,! or! a! money! laundering! offense! under!
State! shall! extend! cooperation! in! transnational! Section! 4! thereof.! Further,! in! instances! where! there! is!
investigations! and! prosecutions! of! persons! involved! in! probable! cause! that! the! deposits! or! investments! are!
money!laundering!activities!wherever!committed.!(Anti' related! to! kidnapping! for! ransom,!certain! violations! of!
Money! Laundering! Act! of! 2001,! Republic! Act! No.! 9160,! the! Comprehensive! Dangerous! Drugs! Act! of!
[September!29,!2001])! 2002,!!hijacking! and! other! violations! under!R.A.! No.!
!
6235,! destructive! arson! and! murder,! then! there! is! no!
Money*laundering,*definitions*
need!for!the!AMLC!to!obtain!a!court!order!before!it!could!
generally! defined! by! the! International! Criminal! Police!
inquire!into!such!accounts.!
Organization! (Interpol)!as! "any! act! or! attempted! act! to!
conceal! or! disguise! the! identity! of! illegally! obtained! It!cannot!be!successfully!argued!the!proceedings!relating!
proceeds! so! that! they! appear! to! have! originated! from! to!the!bank!inquiry!order!under!Section!11!of!the!AMLA!
legitimate! sources."|!(Republic! v.! Eugenio,! Jr.,! G.R.! No.! is!a!"litigation"!encompassed!in!one!of!the!exceptions!to!
174629,![February!14,!2008],!569!PHIL!98'136)! the! Bank! Secrecy! Act! which! is! when! "the! money!
! deposited! or! invested! is! the! subject! matter! of! the!
a!crime!whereby!the!proceeds!of!an!unlawful!activity!are! litigation."! The! orientation! of! the! bank! inquiry! order! is!
transacted,! thereby! making! them! appear! to! have! simply! to! serve! as! a! provisional! relief! or! remedy.! As!
originated! from! legitimate! sources.! !(Anti'Money! earlier!stated,!the!application!for!such!does!not!entail!a!
Laundering! Act! of! 2001,! Republic! Act! No.! 9160,! full/blown!trial.!
[September!29,!2001])!
! Nevertheless,! just! because! the! AMLA! establishes!
AMLA,* as* an* exception* to* the* Bank* Secrecy* Act* of* additional!exceptions!to!the!Bank!Secrecy!Act!it!does!not!
1995* mean!that!the!later!law!has!dispensed!with!the!general!
Because! of! the! Bank! Secrecy! Act,! the! confidentiality! of! principle!established!in!the!older!law!that!"[a]ll!deposits!
bank! deposits! remains! a! basic! state! policy! in! the! of!whatever!nature!with!banks!or!banking!institutions!in!
Philippines.!Subsequent!laws,!including!the!AMLA,!may! the! Philippines! .! .! .! are! hereby! considered! as! of! an!
have!added!exceptions!to!the!Bank!Secrecy!Act,!yet!the! absolutely! confidential! nature."!! Indeed,! by! force! of!
secrecy!of!bank!deposits!still!lies!as!the!general!rule.!It! statute,!all!bank!deposits!are!absolutely!confidential,!and!
falls! within! the! zones! of! privacy! recognized! by! our! that!nature!is!unaltered!even!by!the!legislated!exceptions!
laws.!The! framers! of! the!1987! Constitution!likewise! referred!to!above.!There!is!disfavor!towards!construing!
recognized!that!bank!accounts!are!not!covered!by!either! these!exceptions!in!such!a!manner!that!would!authorize!
the! right! to! information!under! Section! 7,! Article! III! or! unlimited!discretion!on!the!part!of!the!government!or!of!
under! the! requirement! of! full! public! disclosure!under! any! party! seeking! to! enforce! those! exceptions! and!
Section! 28,! Article! II.!!Unless! the! Bank! Secrecy! Act! is! inquire! into! bank! deposits.! If! there! are! doubts! in!
repealed! or! amended,! the! legal! order! is! obliged! to! upholding! the! absolutely! confidential! nature! of! bank!
conserve!the!absolutely!confidential!nature!of!Philippine! deposits! against! affirming! the! authority! to! inquire! into!
bank!deposits.! 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!

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 MERCANTILE FOREIGN INVESTMENTS ACT
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of! preserving! the! absolutely! confidential! nature! of! d.! Insurance!brokers;!
Philippine! bank! accounts.! ! (Republic! v.! Eugenio,! Jr.,! G.R.! e.! Professional!reinsurers;!
No.!174629,![February!14,!2008],!569!PHIL!98'136)! f.! Reinsurance!brokers;!
g.! Holding!companies;!
Illegal* use* of* alias* does* not* necessarily* constitute* h.! Holding!company!systems;!
money*laundering* i.! Mutual!benefit!associations;!and!
Finally,!RA!9160!refers!to!the!crime!of!money!laundering! j.! All! other! persons! and! their! subsidiaries! and!
and! the! imposable! penalty! for! its! commission! —! the! affiliates! supervised! or! regulated! by! the! IC.!
illegal!use!of!alias!violative!of!CA!142!is!not!indispensable! (2016! Revised! Implementing! Rules! and!
in! sustaining! a! violation! of! the!anti/money! laundering! Regulations! of! Republic! Act! No.! 9160,! as!
law!and!illegal!use!of!alias!does!not!necessarily!amount! Amended,![September!21,!2016])!
to,!or!necessarily!constitute,!money!laundering.!!(People! !
v.!Estrada,!G.R.!Nos.!164368'69,![April!2,!2009],!602!PHIL! !
226'254)!
Persons*supervised*or*regulated*by*SEC*
*
!
!
1.! Securities! dealers,! brokers,! salesmen,!
Covered*Institutions* investment! houses,! and! other! similar! persons!
! managing!securities!or!rendering!services!such!
Person,*definition* as!investment!agents,!advisors,!or!consultants.!
any!natural!or!juridical!person!(2016!IRR)! 2.! mutual! funds! or! open/end! investment!
•! “Covered! institutions”! are! now! know! as! companies,!close/end!investment!companies!or!
“Covered!Persons”!by!the!2016!IRR!of!AMLA.* issuers!and!other!similar!entities;!
* 3.! other! entities! administering! or! otherwise!
Covered*Persons* dealing!in!commodities,!or!financial!derivatives!
! based! thereon,! valuable! objects,! cash!
Four*types*of*covered*persons* substitutes! and! other! similar! monetary!
1.! those! supervised! or! regulated! by! the! Bangko! instruments! or! properties! supervised! and!
Sentral!ng!Pilipinas!(BSP);! regulated! by! the! SEC.! (2016! Revised!
2.! those!supervised!or!regulated!by!the!Insurance! Implementing!Rules!and!Regulations!of!Republic!
Commission!(IC);! Act! No.! 9160,! as! Amended,! [September! 21,!
3.! those!supervised!or!regulated!by!the!Securities! 2016])!
Exchange!Commission;!and! !
4.! Designated! Non/Financial! Businesses! and! !
Professions!(DNFBPs)! Designated*NonJFinancial*Businesses*and*
! Professions*
Persons*supervised*or*regulated*by*BSP* !
! a.! Jewelry!dealers,!dealers!in!precious!metals,!and!
a.! Banks;! dealers!in!precious!stones.!
b.! Non/banks;! !
c.! Quasi/banks;!! "Dealer"!refers!to!an!individual!or!entity!who!
d.! Trust!entities;! buys! and/or! sells! precious! metals,! precious!
e.! Pawnshops;! stones! and/or! jewelry! in! the! course! of! its!
f.! Non/stock!savings!and!loan!associations;! business! activities.! The! purchases! or! sales! of!
g.! Electronic!money!issuers;!and! precious! metals,! precious! stones! and/or!
h.! All! other! persons! and! their! subsidiaries! and! jewelry! as! referred! to! herein! exclude! those!
affiliates!supervised!or!regulated!by!the!BSP.! carried! out! for,! connected! with,! or! for! the!
! purpose! of! extracting! precious! metals! or!
For! purposes! of! this! RIRR,! foreign! exchange! precious! stones! from! a! mine,! or! cutting! or!
dealers,! money! changers,! and! remittance! and! polishing!precious!stones.!
transfer!companies!are!covered!persons!under! !
the! regulation! of! the! BSP.! (2016! Revised! "Jewelry"!refers!to!finished!goods!deriving!fifty!
Implementing!Rules!and!Regulations!of!Republic! percent! (50%)! or! more! of! their! value! from!
Act!No.!9160,!as!Amended,![September!21,!2016]! jewels,! precious! metals! or! precious! stones!
! constituting,!forming!part!of!or!attached!to!said!
! finished!goods.!
Persons*supervised*or*regulated*by*IC* !
! "Jewel"!refers!to!organic!substances!that!have!
a.! Insurance!companies;! a! market/recognized! gem! level! of! quality,!
b.! Pre/need!companies;! beauty! and! rarity;! such! as! pearl,! amber! and!
c.! Insurance!agents;! coral.!!

#ToTheBarAndBeyond2018
 MERCANTILE FOREIGN INVESTMENTS ACT
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! Notwithstanding! the! foregoing,! lawyers! and!
"Precious* metals"! refers! to! gold,! silver,!
platinum,! palladium,! rhodium,! ruthenium,!
iridium!and!osmium!at!a!level!of!purity!of!five!
hundred! (500)! parts! per! one! thousand!
(1,000),singly!or!in!any!combination,!and!alloys!
of! precious! metals,! solders,! and! plating!
chemicals! such! as! rhodium! and! palladium!
plating! solutions,! potassium! gold! cyanide!
containing!at!least!sixty/eight!and!three/tenths!
percent!(68.3%)!gold,!potassium!silver!cyanide!
containing! at! least! sixty/eight! percent! (68%)!
silver! and! silver! cyanide! in! salt! solution!
containing! at! least! fifty/four! percent! (54%)!
silver.!
! Regulations! of! Republic! Act! No.! 9160,! as!
"Precious*stones"!refers!to!all!gems!and!stones!
used! in! jewelry! making,! such! as! gemstones,!
jewels!and!those!substances!that!have!market/
recognized! gem! level! of! quality,! beauty,! and!
rarity! such! as! diamond;! corundum! (including!
rubies! and! sapphires);beryl! (including!
emeralds! and! aquamarines);chrysoberyl,!
spinel,! topaz,! zircon,! tourmaline,! garnet,!
crystalline!and!cryptocrystalline!quartz,!olivine!
peridot,! tanzanite,! jadeite! jade,! nephrite! jade,!
spodumene,! feldspar,! turquoise,! lapis! lazuli,!
opal!and!pearl.!
! managed!by!an!asset!manager;!
b.! Company! service! providers! which,! as! a!
business,!provide!any!of!the!following!services!
to!third!parties:!
1.! acting! as! a! formation! agent! of! juridical!
persons;!
2.! acting!as!(or!arranging!for!another!person!
to!act!as)!a!director!or!corporate!secretary!
of! a! company,! a! partner! of! a! partnership,!
or! a! similar! position! in! relation! to! other!
juridical!persons;!
3.! providing! a! registered! office;! business!
address! or! accommodation,!
correspondence!or!administrative!address!
for!a!company,!a!partnership!or!any!other!
legal!person!or!arrangement;!and!
4.! acting!as!(or!arranging!for!another!person!
to!act!as)! a! nominee! shareholder! for!
another!person.!
! It!refers!to:!
c.! Persons,! including! lawyers! and! accountants,!
who!provide!any!of!the!following!services:!
1.! Managing! of! client! money,! securities! or!
other!assets;!
2.! Management!of!bank,!savings,!securities!or!
other!assets;!
3.! iii.!Organization! of! contributions! for! the!
creation,! operation! or! management! of!
companies;!and!
4.! Creation,! operation! or! management! of!
juridical! persons! or! arrangements,! and!
buying!and!selling!business!entities.!
!
#ToTheBarAndBeyond2018
accountants!who!are:!(1)!authorized!to!practice!
their!profession!in!the!Philippines;!and!are!(2)!
engaged!as!independent!legal!professionals!in!
relation!to!information!concerning!their!clients,!
or! where! disclosure! of! information! would!
compromise!client!confidences!or!the!attorney/
client!relationship,!are!not!covered!persons.!!
!
"Independent* legal* professional"! are!
lawyers! and! accountants! working! in! a! private!
firm! or! as! a! sole! practitioner! who! by! way! of!
business! provides! purely! legal,! notarial! or!
accounting!services!to!their!clients.!
(2016! Revised! Implementing! Rules! and!
Amended,![September!21,!2016])!
!
Client/Customer,*definition*
any!person!who!keeps!an!account,!or!otherwise!transacts!
business!with!a!covered!person.!It!includes!the!following:!
1.! any! person! or! entity! on! whose! behalf! an!
account! is! maintained! or! a! transaction! is!
conducted,! as! well! as! the! beneficiary! of! said!
transactions;!
2.! beneficiary!of!a!trust,!an!investment!fund!or!a!
pension!fund;!
3.! a! company! or! person! whose! assets! are!
4.! a!grantor!of!a!trust;!and!
5.! any!insurance!policy!holder,!whether!actual!or!
prospective.!(2016!Revised!Implementing!Rules!
and! Regulations! of! Republic! Act! No.! 9160,! as!
Amended,![September!21,!2016])!
!
!
Covered*Transactions*
!
Transaction,*definition*
any!act!establishing!any!right!or!obligation,!or!giving!rise!
to! any! contractual! or! legal! relationship! between! the!
parties!thereto.!It!also!includes!any!movement!of!funds!
by! any! means! with! a! covered! person|(2016! Revised!
Implementing! Rules! and! Regulations! of! Republic! Act! No.!
9160,!as!Amended,![September!21,!2016])!
!
Covered*transaction*
1.! A! transaction! in! cash! or! other! equivalent!
monetary! instrument! exceeding!Five! Hundred!
Thousand!pesos!(Php500,000.00)!
2.! A! transaction! exceeding!One! Million! pesos!
(Php1,000,000.00)!in! cases! of! jewelry! dealers,!
dealers! in! precious! metals! and! dealers! in!
precious! stones.! (2016! Revised! Implementing!
Rules!and!Regulations!of!Republic!Act!No.!9160,!
as!Amended,![September!21,!2016])!
!
!
!
 MERCANTILE FOREIGN INVESTMENTS ACT
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Suspicious*Transactions*
! Amended,![September!21,!2016])!
Suspicious*Transaction*
refers!to!a!transaction,!regardless!of!amount,!where!any!
of!the!following!circumstances!exists:!
1.! there!is!no!underlying!legal!or!trade!obligation,!
purpose!or!economic!justification;!
2.! the!client!is!not!properly!identified;!
3.! the!amount!involved!is!not!commensurate!with!
the!business!or!financial!capacity!of!the!client;!
4.! taking!into!account!all!known!circumstances,!it!
may!be!perceived!that!the!client's!transaction!is!
structured!in!order!to!avoid!being!the!subject!of!
reporting!requirements!under!the!AMLA;!
5.! any! circumstance! relating! to! the! transaction!
which!is!observed!to!deviate!from!the!profile!of!
the!client!and/or!the!client's!past!transactions!
with!the!covered!person;!
6.! the! transaction! is! in! any! way! related! to! an!
unlawful! activity! or! any! money! laundering!
activity! or! offense! that! is! about! to! be!
committed,!is!being!or!has!been!committed;!or!
7.! any! transaction! that! is! similar,! analogous! or!
identical!to!any!of!the!foregoing.!(2016!Revised!
Implementing!Rules!and!Regulations!of!Republic!
Act! No.! 9160,! as! Amended,! [September! 21,!
2016])!
! following:!
When*Is*Money*Laundering*Committed*
! of!Act!No.! 3815,! otherwise! known! as!
Money*Laundering,*By*Whom*and*How*Committed*
A.! Any! person! who,! knowing! that! any! monetary!
instrument!or!property!represents,!involves,!or!
relates!to!the!proceeds!of!any!unlawful!activity:!
1! transacts! said! monetary! instrument! or!
property;!
2! converts,! transfers,! disposes! of,! moves,!
acquires,!possesses!or!uses!said!monetary!
instrument!or!property;!
3! conceals! or! disguises! the! true! nature,!
source,!location,!disposition,!movement!or!
ownership!of!or!rights!with!respect!to!said!
monetary! instrument! or!
property;!SDHTEC!
4! attempts! or! conspires! to! commit! money!
laundering! offenses! referred! to! in! (1),(2)!
or!(3)!above;!
5! aids,! abets,! assists! in! or! counsels! the!
commission! of! the! money! laundering!
offenses!referred!to!in!(1),(2)!or!(3)!above;!
and!
6! performs! or! fails! to! perform! any!act!as! a!
result!of!which!he!facilitates!the!offense!of!
money!laundering!referred!to!in!(1),(2)!or!
(3)!above.!
! under!Republic!Act!No.! 1937,! as! amended,!
B.! Any! covered! person! who,! knowing! that! a!
covered! or! suspicious! transaction! is! required!
under! the!AMLA!to! be! reported! to! the! AMLC,!
fails!to!do!so.!(2016!Revised!Implementing!Rules!
#ToTheBarAndBeyond2018
and! Regulations! of! Republic! Act! No.! 9160,! as!
!
Separate*and*Distinct*Elements*
The! elements! of! money! laundering! are! separate! and!
distinct!from!the!elements!of!the!unlawful!activity.!The!
elements!of!the!unlawful!activity,!including!the!identity!
of!the!perpetrators!and!the!details!of!the!commission!of!
the! unlawful! activity,! need! not! be! established! by! proof!
beyond! reasonable! doubt! in! the! case! for! money!
laundering.! !(2016! Revised! Implementing! Rules! and!
Regulations! of! Republic! Act! No.! 9160,! as! Amended,!
[September!21,!2016])!
!
Knowledge*
The!element!of!knowledge!may!be!established!by!direct!
or!circumstantial!evidence.|!(2016!Revised!Implementing!
Rules! and! Regulations! of! Republic! Act! No.! 9160,! as!
Amended,![September!21,!2016])!
!
*
!
Unlawful*Activities*or*Predicate*Crimes*
!
Unlawful*Activity,*definition*
refers! to! any!act!or! omission,! or! series! or! combination!
thereof,! involving! or! having! direct! relation,! to! the!
1.! "Kidnapping! for! Ransom"!under! Article! 267!
the!Revised!Penal!Code,!as!amended;!
2.! Sections!4,!5,!6,!8,!9,!10,!11,!12,!13,!14,!15!and!
16!of!Republic!Act!No.!9165,!otherwise!known!
as!the!"Comprehensive!Dangerous!Drugs!Act!of!
2002";!
3.! Section! 3! paragraphs! b,! c,! e,! g,! h! and! i!
of!Republic!Act!No.! 3019,! as! amended,!
otherwise! known! as! the! "Anti/Graft! and!
Corrupt!Practices!Act";!
4.! "Plunder"!under!Republic!Act!No.! 7080,! as!
amended;!
5.! "Robbery"!and!"Extortion"!under! Articles! 294,!
295,!296,!299,!300,!301!and!302!of!the!Revised!
Penal!Code,!as!amended;!
6.! "Jueteng"!and!"Masiao"!punished! as! illegal!
gambling!under!Presidential!Decree!No.!1602;!
7.! "Piracy! on! the! High! Seas"!under! the!Revised!
Penal! Code,! as! amended,! and!Presidential!
Decree!No.!532;!
8.! "Qualified! Theft"!under! Article! 310! of!
the!Revised!Penal!Code,!as!amended;!
9.! "Swindling"!under! Article! 315! and!"Other!
Forms! of! Swindling"!under! Article! 316! of!
the!Revised!Penal!Code,!as!amended;!
10.! "Smuggling"!under!Republic!Act!No.! 455!and!
otherwise! known! as! the!"Tariff! and! Customs!
Code!of!the!Philippines";!
11.! Violations! under!Republic!Act!No.! 8792,!
otherwise! known! as! the!"Electronic!
Commerce!Act!of!2000";!
 MERCANTILE FOREIGN INVESTMENTS ACT
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12.! "Hijacking"!and! other! violations!
under!Republic!Act!No.!6235,!otherwise!known!
as!the!"Anti/Hijacking!Law";!
"Destructive! Arson";! and!"Murder,"!as! defined!
under!the!Revised!Penal!Code,!as!amended;!
13.! "Terrorism"!and!"Conspiracy! to! Commit!
Terrorism"!as! defined! and! penalized! under!
Sections!3!and!4!of!Republic!Act!No.!9372;!
14.! "Financing! of! Terrorism"!under! Section! 4! and!
offenses!punishable!under!Sections!5,!6,!7!and!
8!of!Republic!Act!No.!10168,!otherwise!known!
as! the!"Terrorism! Financing! Prevention! and!
Suppression!Act!of!2012";!
15.! "Bribery"!under!Articles!210,!211!and!211/A!of!
the!Revised! Penal! Code,! as! amended,! and!
"Corruption! of! Public! Officers"!under! Article!
212!of!the!Revised!Penal!Code,!as!amended;!
16.! "Frauds! and! Illegal! Exactions"!and!
Transactions!under!Articles!213,!214,!215!and!
216!of!the!Revised!Penal!Code,!as!amended;!
17.! "Malversation! of! Public! Funds"!and! Property!
under! Articles! 217! and! 222! of! the!Revised!
Penal!Code,!as!amended;!
18.! "Forgeries"!and!"Counterfeiting"!under!
Articles! 163,! 166,! 167,! 168,! 169! and! 176! of!
the!Revised!Penal!Code,!as!amended;!!
19.! Violations!of!Sections!4!to!6!of!Republic!Act!No.!
9208,!otherwise!known!as!the!"Anti/Trafficking!
in! Persons!Act!of! 2003,"! as! amended!
by!Republic!Act!No.!10364;!
20.! Violations! of! Sections! 78! to! 79! of! Chapter! IV!
of!Presidential! Decree!No.! 705,! otherwise!
known! as! the! "Revised! Forestry! Code! of! the!
Philippines,!as!amended";!
21.! Violations! of! Sections! 86! to! 106! of! Chapter! IV!
of!Republic!Act!No.! 8550,! otherwise! known! as!
the!"Philippine!Fisheries!Code!of!1998";!
22.! Violations! of! Sections! 101! to! 107,! and! 110!
of!Republic!Act!No.! 7942,! otherwise! known! as!
the!"Philippine!Mining!Act!of!1995";!
23.! Violations!of!Section!27!(c),!(e),!(f),!(g)!and!(i)!
of!Republic!Act!No.! 9147,! otherwise! known! as!
the! "Wildlife! Resources! Conservation! and!
Protection!Act";!
24.! Violations! of! Section! 7! (b)! of!Republic!Act!No.!
9072,!otherwise!known!as!the!"National!Caves!
and! Cave! Resources! Management!
Protection!Act";!
25.! Violation! of!Republic!Act!No.! 6539,! otherwise!
known!as!the!"Anti/Carnapping!Act!of!2002,!as!
amended";!
26.! Violation!of!Sections!1,!3,!and!5!of!Presidential!
Decree!No.! 1866,! as! amended,! otherwise!
known! as! the! decree!"Codifying! the! Laws! on!
Illegal/Unlawful! Possession,! Manufacture,!
Dealing! in,! Acquisition! or! Disposition! of!
Firearms,!Ammunition!or!Explosives";!
27.! Violation! of!Presidential! Decree!No.! 1612,!
otherwise!known!as!the!"Anti/Fencing!Law";!
28.! Violation!of!Section!6!of!Republic!Act!No.!8042,!
otherwise!known!as!the!"Migrant!Workers!and!
#ToTheBarAndBeyond2018
Overseas! Filipinos!Act!of! 1995,"!as! amended!
by!Republic!Act!No.!10022;!
29.! Violation! of!Republic!Act!No.! 8293,! otherwise!
known!as!the!"Intellectual!Property!Code!of!the!
Philippines,!as!amended";!
30.! Violation!of!Section!4!of!Republic!Act!No.!9995,!
otherwise!known!as!the!"Anti/Photo!and!Video!
Voyeurism!Act!of!2009";!
31.! Violation!of!Section!4!of!Republic!Act!No.!9775,!
otherwise! known! as! the!"Anti/Child!
Pornography!Act!of!2009";!
32.! Violations!of!Sections!5,!7,!8,!9,!10!(c),!(d)!and!
(e),! 11,! 12! and! 14! of!Republic!Act!No.! 7610,!
otherwise!known!as!the!"Special!Protection!of!
Children! against! Abuse,! Exploitation! and!
Discrimination";!
33.! Fraudulent! practices! and! other! violations!
under!Republic!Act!No.!8799,!otherwise!known!
as!the!"Securities!Regulation!Code!of!2000";!
34.! Felonies! or! offenses! of! a! nature! similar! to! the!
aforementioned! unlawful! activities! that! are!
punishable! under! the! penal! laws! of! other!
countries.!
!
!In! determining! whether! or! not! a! felony! or! offense!
punishable!under!the!penal!laws!of!other!countries!is!"of!
a! similar! nature,"! as! to! constitute! an! unlawful! activity!
under! the!AMLA,! the! nomenclature! of! said! felony! or!
offense! need! not! be! identical! to! any! of! the! unlawful!
activities!listed!above.!(2016!Revised!Implementing!Rules!
and! Regulations! of! Republic! Act! No.! 9160,! as! Amended,!
[September!21,!2016])!
!
Monetary* Instrument* or* Property* Related* to* an*
Unlawful*Activity,*definition*
1.!All!proceeds!of!an!unlawful!activity;!
2.!All!monetary,!financial!or!economic!means,!devices,!
accounts,!documents,!papers,!items!or!things!
used! in! or! having! any! relation! to! any!
unlawful!activity;!
3.!All! moneys,! expenditures,! payments,!
disbursements,! costs,! outlays,! charges,!
accounts,!refunds!and!other!similar!items!for!
the! financing,! operations,! and! maintenance!
of!any!unlawful!activity;!and!
4.!For! purposes! of! freeze! order! and! bank! inquiry:!
related! and! materially/linked!
accounts.!!(2016!Revised!Implementing!Rules!
and!Regulations!of!Republic!Act!No.!9160,!as!
Amended,![September!21,!2016])!
!
!
Jurisdiction*over*Money*Laundering*Cases*
!
Regional*Trial*Courts*
have! the! jurisdiction! to! try! money! laundering! cases!
committed!by!private!individuals,!and!public!officers!not!
 MERCANTILE FOREIGN INVESTMENTS ACT
!
covered!by!the!jurisdiction!of!the!Sandiganbayan.|(2016! 3.! to!institute!civil!forfeiture!proceedings!and!all!
Revised! Implementing! Rules! and! Regulations! of! Republic! other!remedial!proceedings!through!the!Office!
Act!No.!9160,!as!Amended,![September!21,!2016])! of!the!Solicitor!General;!
* 4.! to! file! complaints! with! the! Department! of!
Sandiganbayan* Justice!or!the!Office!of!the!Ombudsman!for!the!
has! jurisdiction! to! try! money! laundering! cases! prosecution!of!money!laundering!offenses!and!
committed!by!public!officers!under!its!jurisdiction,!and! other!violations!under!the!AMLA;!
private!persons!who!are!in!conspiracy!with!such!public! 5.! to! investigate! suspicious! transactions! and!
officers.|(2016! Revised! Implementing! Rules! and! covered! transactions! deemed! suspicious! after!
Regulations! of! Republic! Act! No.! 9160,! as! Amended,! investigation! by! the! AMLC,! money! laundering!
[September!21,!2016])! activities!and!other!violations!of!the!AMLA;!!
! 6.! to! file! with! the! Court! of! Appeals,!ex! parte!
Independent*Proceedings* through!the!Office!of!the!Solicitor!General:!
The!prosecution!of!money!laundering!and!the!unlawful! a.! a! petition! for! the! freezing! of! any!
activity!shall!proceed!independently.!Any!person!may!be! monetary! instrument! or! property!
charged! with! and! convicted! of! both! money! laundering! that! is! in! any! way! related! to! an!
and! the! unlawful! activity.|(2016! Revised! Implementing! unlawful!activity;!or!!
Rules! and! Regulations! of! Republic! Act! No.! 9160,! as! b.! an!application!for!authority!to!inquire!
Amended,![September!21,!2016])! into! or! examine! any! particular!
! deposit! or! investment,! including!
Rules*of*Procedure* related! accounts,! with! any! banking!
The! Rules! of! Court! shall! govern! all! proceedings! institution! or! non/bank! financial!
concerning!the!prosecution!of!money!laundering.|!(2016! institution.!
Revised! Implementing! Rules! and! Regulations! of! Republic! 7.! to!formulate!and!implement!such!measures!as!
Act!No.!9160,!as!Amended,![September!21,!2016])! may! be! necessary! and! justified! under!
* the!AMLA!to!counteract!money!laundering.!
! 8.! to! receive! and! take! action! in! respect! of! any!
AntiJMoney*Laundering*Council*(AMLC)* request! from! foreign! states! for! assistance! in!
! their!own!anti/money!laundering!operations!as!
AntiJMoney*Laundering*Council,*definition* provided!in!the!AMLA.!
the! financial! intelligence! unit! of! the!Republic!of! the! 9.! to! develop! educational! programs,! including!
Philippines! which! is! the! government! agency! tasked! to! awareness!campaign!on!the!pernicious!effects,!
implement!the!AMLA!(2016!Revised!Implementing!Rules! the! methods! and! techniques! used,! and! the!
and! Regulations! of! Republic! Act! No.! 9160,! as! Amended,! viable! means! of! preventing! money! laundering!
[September!21,!2016])! and! the! effective! ways! of! prosecuting! and!
! punishing!offenders;!
AMLC,*Composition* 10.! to! enlist! the! assistance! of! any! branch,!
Chairperson!–!Governor!of!the!BSP! department,! bureau,! office,! agency! or!
Members:! instrumentality! of! the! government,! including!
a.! Commissioner!of!the!IC! government/owned! and! /controlled!
b.! Chairperson!of!the!SEC! 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,!
Functions*of*AMLC*
detection! and! investigation! of! money!
!
laundering! offenses! and! prosecution! of!
The!functions!of!the!AMLC!are:!
offenders.!
1.! to! require! and! receive! covered! or! suspicious!
11.! to! impose! administrative! sanctions! for! the!
transaction!reports!from!covered!persons;!
violation!of!laws,!rules,!regulations,!orders,!and!
2.! to! issue! orders! addressed! to! the! appropriate!
resolutions!issued!pursuant!thereto.!
Supervising!Authority!or!the!covered!person!to!
12.! to!require!the!Land!Registration!Authority!and!
determine!the!true!identity!of!the!owner!of!any!
all! its! Registries! of! Deeds! to! submit! to! the!
monetary! instrument! or! property! subject! of! a!
AMLC,! reports! on! all! real! estate! transactions!
covered! or! suspicious! transaction! report,! or!
involving!an!amount!in!excess!of!Five!hundred!
request! for! assistance! from! a! foreign! State,! or!
thousand! pesos! (P500,000.00)! within! fifteen!
believed! by! the! AMLC,! on! the! basis! of!
(15)! days! from! the! date! of! registration! of! the!
substantial!evidence,!to!be,!in!whole!or!in!part,!
transaction,! in! a! form! to! be! prescribed! by! the!
wherever! located,! representing,! involving,! or!
AMLC.! The! AMLC! may! also! require! the! Land!
related!to,!directly!or!indirectly,!in!any!manner!
Registration!Authority!and!all!its!Registries!of!
or!by!any!means,!the!proceeds!of!any!unlawful!
Deeds!to!submit!copies!of!relevant!documents!
activity;!
of! all! real! estate! transactions.! (2016! Revised!

#ToTheBarAndBeyond2018
 MERCANTILE FOREIGN INVESTMENTS ACT
!
Implementing!Rules!and!Regulations!of!Republic! The!use!of!Information!and!Communication!Technology!
Act! No.! 9160,! as! Amended,! [September! 21,! in! the! conduct! of! face/to/face! contact! may! be! allowed,!
2016])! provided!that!the!covered!person!is!in!possession!of!and!
! has! verified! the! identification! documents! submitted! by!
! the!prospective!client!prior!to!the!interview!and!that!the!
Scope* and* parameters* of* AMLC’s* investigatory* entire! procedure! is! documented.! (2016! Revised!
powers;* AMLC* does* not* exercise* quasiJjudicial* Implementing! Rules! and! Regulations! of! Republic! Act! No.!
functions* 9160,!as!Amended,![September!21,!2016])!
The!AMLC!shall!investigate:! !
1.! suspicious!transactions;! Minimum* Customer* Information* and* Identification*
2.! covered! transactions! deemed! suspicious! after! Documents*
an!investigation!conducted!by!the!AMLC;! See!Rule!9!of!2016!RIRR!of!AMLA!
3.! money!laundering!activities;!and! !
4.! other!violations!of!the!AMLA,!as!amended! Third*Party*Reliance*
|| A!covered!person!may!rely!on!a!third!party!to!perform!
! customer!identification,!including!face/to/face!contact.!
! The!third!party!shall!be:!
Obligations*of*Covered*Persons*(Preventive* 1.! A!covered!person;!or!
Measures)* 2.! A!financial!institution!or!DNFBP!operating!
! outside!the!Philippines!that!is!covered!by!
1.! Customer!Due!Diligence! equivalent!customer!identification!and!face/to/
2.! Record!Keeping! face!requirements.!
3.! Transaction!Reporting! Notwithstanding!the!foregoing,!the!ultimate!
! responsibility!for!identifying!the!customer!remains!with!
the!covered!person!relying!on!the!third!party.!
Customer*Due*Diligence*
!
! Provided!that,!in!cases!of!high!risk!customers,!the!
Covered! persons! shall! establish! and! record! the! true! covered!person!relying!on!the!third!person!shall!also!
identity! of! their! clients! based! on! official! documents,! as! conduct!enhanced!due!diligence!procedure.!!(2016!
defined!under!Rule!3.M!of!this!RIRR.!They!shall!maintain! Revised!Implementing!Rules!and!Regulations!of!Republic!
a! system! of! verifying! the! true! identity! of! their! clients! Act!No.!9160,!as!Amended,![September!21,!2016])!
based! on! reliable,! independent! source! data,! documents! !
of!information!and,!in!case!of!corporate!clients,!require!a! Outsourcing*the**Conduct*of*Customer*Identification*
system! of! verifying! their! legal! existence! and! Covered!persons!may!outsource!the!conduct!of!customer!
organizational! structure,! as! well! as! the! authority! and! identification,! including! face/to/face! contact,! to! a!
identification! of! all! persons! purporting! to!act!on! their! counter/party,! intermediary! or! agent.! The! outsource,!
behalf.! Covered! persons! shall! establish! appropriate! counter/party!or!intermediary!shall!be!regarded!as!agent!
systems! and! methods! and! adequate! internal! controls,!
of! the! covered! person! —! that! is,! the! processes! and!
compliant! with! the!AMLA,! this! RIRR,! other! AMLC!
documentation! are! those! of! the! covered! person! itself.!
issuances,! the! guidelines! issued! by! the! Supervising!
The!ultimate!responsibility!for!identifying!the!customer!
Authorities! and! internationally! accepted! anti/money!
and!keeping!the!identification!documents!remains!with!
laundering! standards,! for! verifying! and! recording! the!
the!covered!person.!
true!and!full!identity!of!their!customers.! !
! !The! covered! person! outsourcing! the! conduct! of!
In! conducting! customer! due! diligence,! a! risk/based! customer! identification,! including! face/to/face! contact,!
approach!shall!be!undertaken!depending!on!the!type!of! shall!ensure!that!the!employees!or!representatives!of!the!
customer,!business!relationship!or!nature!of!the!product,! counter/party,! intermediary! or! agent! undergo!
transaction!or!activity.!(2016!Revised!Implementing!Rules! equivalent! training! program! as! that! of! the! covered!
and! Regulations! of! Republic! Act! No.! 9160,! as! Amended,! person's! own! employees! undertaking! similar! activity.!
[September!21,!2016])! (2016! Revised! Implementing! Rules! and! Regulations! of!
! Republic!Act!No.!9160,!as!Amended,![September!21,!2016])!
Customer*Identification* *
* Identification*and*Verification*of*a*Beneficial*
FaceJtoJFace*Contact* Owner,*Trustee,*Nominee,*or*Agent*
Covered!persons!shall!conduct!face/to/face!contact!at!the! Where! an! account! is! opened! or! a! transaction! is!
commencement! of! the! relationship,! or! as! reasonably! conducted! by! any! person! in! behalf! of! another,! covered!
practicable!so!as!not!to!interrupt!the!normal!conduct!of! persons! shall! establish! and! record! the! true! and! full!
business,!taking!into!account!the!nature!of!the!product,! identity!and!existence!of!both!the!(1)!account!holder!or!
type! of! business! and! the! risks! involved;! provided! that! transactor! and! the! (2)beneficial! owner!or! person! on!
money!laundering!risks!are!effectively!managed.! whose!behalf!the!transaction!is!being!conducted.!!
! !

#ToTheBarAndBeyond2018
 MERCANTILE FOREIGN INVESTMENTS ACT
!
!The!covered!person!shall!determine!the!true!nature!of! Covered! persons! shall! examine! the! background! and!
the!parties'!capacities!and!duties!by!obtaining!a!copy!of! purpose!of!all!complex,!unusually!large!transactions,!all!
the!written!document!evidencing!their!relationship!and! unusual! patterns! of! transactions,! which! have!
apply! the! same! standards! for! assessing! the! risk! profile! no!apparent! economic! or! lawful! purpose,! and! other!
and! determining! the! standard! of! due! diligence! to! be! transactions!that!may!be!considered!suspicious.!
applied!to!both.!In!case!it!entertains!doubts!as!to!whether! !
the! account! holder! or! transactor! is! being! used! as! a! Where! the! risks! of! money! laundering! or! terrorist!
dummy!in!circumvention!of!existing!laws,!it!shall!apply! financing!are!higher,!covered!persons!should!be!required!
enhanced!due!diligence!or!file!a!Suspicious!Transaction! to!conduct!enhanced!due!diligence!measures,!consistent!
Report,!if!warranted.!(2016!Revised!Implementing!Rules! with!the!risks!identified.!
and! Regulations! of! Republic! Act! No.! 9160,! as! Amended,! !
[September!21,!2016])! For! this! purpose,! covered! persons! shall! perform! the!
! following:!
! i.! gather! additional! customer! information! and!
Risk*Assessment* identification! documents,! such! as,! but! not!
* limited! to,! occupation,! volume! of! assets!
Covered! persons! shall! develop! clear,! written! and! information! available! through! public!
graduated!customer!acceptance!policies!and!procedures! databases,! internet,! etc.,! and! updating! more!
including!a!set!of!criteria!for!customers!that!are!likely!to! regularly! the! identification! data! of! customer!
pose! low,! normal! or! high! risk! to! their! operations.! The! and!beneficial!owner;!
criteria! may! include:! (1)! the! nature! of! the! service! or! ii.! ii.!obtain! additional! information! on! the!
product! to! be! availed! of! by! the! customers;! (2)! the! intended! nature! of! the! business! relationship;!
purpose!of!the!account!or!transaction;!(3)!the!amount!of! the!source!of!funds!or!wealth!of!the!customer;!
funds! to! be! deposited! by! a! customer! or! the! size! of! and! the! reasons! for! intended! or! performed!
transactions! undertaken;! (4)! the! regularity! or! duration! transaction;!
of!the!transaction;!(5)!the!fact!that!a!customer!came!from! iii.! conduct!validation!procedures;!
a! high! risk! jurisdiction;! (6)! the! existence! of! suspicious! iv.! secure! the! approval! of! senior! management! to!
transaction! indicators;! and! (7)! such! other! factors! the! commence! or! continue! transacting! with! the!
covered! persons! may! deem! reasonable! or! necessary! to! customer;!
consider! in! assessing! the! risk! of! a! customer! to! money! v.! conduct! enhanced! ongoing! monitoring! of! the!
laundering.! business!relationship;!
! vi.! require! the! first! payment! to! be! carried! out!
!Covered! persons! shall! set! the! standards! in! applying! through! an! account! in! the! customer's! name!
reduced,!normal!and!enhanced!customer!due!diligence,! with! a! bank! subject! to! similar! CDD! standards,!
including! a! set! of! conditions! for! the! denial! of! account! where!applicable;!and!
opening! or! services.! (2016! Revised! Implementing! Rules! vii.! such! other! measures! as! the! covered! persons!
and! Regulations! of! Republic! Act! No.! 9160,! as! Amended,! may! deem! reasonable! or! necessary.! (2016!
[September!21,!2016])! Revised!Implementing!Rules!and!Regulations!of!
* Republic!Act!No.!9160,!as!Amended,![September!
Reduced*Due*Diligence* 21,!2016])!
Where! lower! risks! of! money! laundering! and! terrorist! !
financing! have! been! identified,! through! an! adequate! *
analysis! of! risk! by! the! covered! persons,! reduced! due! Ongoing*Monitoring*of*Customers,*Accounts*and*
diligence! procedures! may! be! applied.! The! reduced! due! Transactions*
diligence!procedures!should!be!commensurate!with!the! *
lower!risk!factors,!but!are!not!acceptable!whenever!there! Covered! persons! shall,! on! the! basis! of! materiality! and!
is!suspicion!of!money!laundering!or!terrorist!financing,! risk,!update!all!customer!information!and!identification!
or!specific!higher!risk!scenarios!apply.! documents!of!existing!customers!required!to!be!obtained!
!! under!the!AMLA,!as!amended,!and!this!RIRR.!
In! strictly! limited! circumstances! and! where! there! is! Covered!persons!shall!establish!a!system!that!will!enable!
proven! low! risk! of! money! laundering! and! terrorist! them!to!understand!the!normal!and!reasonable!account!
financing,! the! Supervising! Authorities! may! issue! or! business! activity! of! customers! to! ensure! that! the!
guidelines! allowing! certain! exemptions,! taking! into! customers'! accounts! and! transactions! are! consistent!
account!the!nature!of!the!product,!type!of!business!and! with! the! covered! person's! knowledge! of! its! customers,!
the!risks!involved;!provided!that!money!laundering!risks! and! the! latter's! commercial! activities,! risk! profile,! and!
are! effectively! managed.! (2016! Revised! Implementing! source!of!funds.!
Rules! and! Regulations! of! Republic! Act! No.! 9160,! as! !
Amended,![September!21,!2016])! Covered!persons!shall!apply!enhanced!due!diligence!on!
! the!customer!if!it!acquires!information!in!the!course!of!
Enhanced*Due*Diligence* its!customer!account!or!transaction!monitoring!that:!

#ToTheBarAndBeyond2018
 MERCANTILE FOREIGN INVESTMENTS ACT
!
a.! Raises! doubt! as! to! the! accuracy! of! any! Retention* of* Records* Where* the* Account* is* the*
information! or! document! provided! or! the! Subject*of*a*Case*
ownership!of!the!entity;! If! a! case! has! been! filed! in! court! involving! the! account,!
b.! Justifies! reclassification! of! the! customer! from! records!must!be!retained!and!safely!kept!beyond!the!five!
low! or! normal! risk! to! high! risk! pursuant! to! (5)/year! period,! until! it! is! officially! confirmed! by! the!
these!Rules;! AMLC! Secretariat! that! the! case! has! been! resolved,!
c.! Indicates!that!any!of!the!circumstances!for!the! decided! or! terminated! with! finality.|||!(2016! Revised!
filing!of!a!Suspicious!Transaction!Report!exists.! Implementing! Rules! and! Regulations! of! Republic! Act! No.!
! 9160,!as!Amended,![September!21,!2016])!
If!the!covered!person:! !
a.! fails! to! satisfactorily! complete! the! enhanced! Closed*Accounts*
due!diligence!procedures;!or! Covered! persons! shall! maintain! and! safely! store! for! at!
b.! reasonably! believes! that! performing! the! least! five! (5)! years! from! the! dates! the! accounts! were!
enhanced!due!diligence!process!will!tip/off!the! closed,! all! records! of! customer! identification! and!
customer,! transaction! documents.|||!(2016! Revised! Implementing!
it!shall!file!a!Suspicious!Transaction!Report,!and!closely! Rules! and! Regulations! of! Republic! Act! No.! 9160,! as!
monitor! the! account! and! review! the! business! Amended,![September!21,!2016])!
relationship.! *
! Form*of*Records*
Covered! persons! shall,! on! the! basis! of! materiality! and! Covered!persons!shall!retain!all!records!as!originals!or!in!
risk,!update,!no!later!than!once!every!three!(3)!years,!all! such! forms! as! are! admissible! in! court.|||!(2016! Revised!
customer! information! and! identification! documents,! Implementing! Rules! and! Regulations! of! Republic! Act! No.!
unless!enhanced!ongoing!monitoring!is!warranted.!(2016! 9160,!as!Amended,![September!21,!2016])!
Revised! Implementing! Rules! and! Regulations! of! Republic! *
Act!No.!9160,!as!Amended,![September!21,!2016])! Covered! persons! shall,! likewise,! keep! the! electronic!
! copies!of!all!covered!and!suspicious!transaction!reports!
! for,!at!least,!five!(5)!years!from!the!dates!of!submission!
Prohibited*Accounts* to!the!AMLC.!
! !
The! following! accounts! shall! be! prohibited! and! may! be! For! low! risk! customers,! it! is! sufficient! that! covered!
the!subject!of!the!Supervising!Authorities'!annual!testing! persons! shall! maintain! and! store,! in! whatever! form,! a!
for! the! sole! purpose! of! determining! the! existence! and! record!of!customer!information!and!transactions.!(2016!
true!identity!of!their!owners:|! Revised! Implementing! Rules! and! Regulations! of! Republic!
! Act!No.!9160,!as!Amended,![September!21,!2016])!
Anonymous*Accounts*and*Accounts*under*Fictitious* *
Names* *
Covered!persons!shall!maintain!customers'!account!only! Transaction*Reporting*
in!the!true!and!full!name!of!the!account!owner!or!holder.! *
Anonymous! accounts,! accounts! under! fictitious! names,! Covered! persons! shall! report! to! the! AMLC! all! covered!
and! all! other! similar! accounts! shall! be! absolutely! transactions!and!suspicious!transactions!within!five!(5)!
prohibited;!and! working! days,! unless! the! AMLC! prescribes! a! different!
period!not!exceeding!fifteen!(15)!working!days,!from!the!
Numbered*Accounts* occurrence!thereof.!!
Numbered! accounts,! except! non/checking! numbered! !
accounts,!shall!not!be!allowed.! For! suspicious! transactions,! "occurrence"! refers! to! the!
! date! of! determination! of! the! suspicious! nature! of! the!
Covered! and! suspicious! transaction! reports! involving! transaction,! which! determination! should! be! made! not!
non/checking!numbered!accounts!shall!contain!the!true! exceeding! ten! (10)! calendar! days! from! the! date! of!
name!of!the!account!holder.!(2016!Revised!Implementing! transaction.! However,! if! the! transaction! is! in! any! way!
Rules! and! Regulations! of! Republic! Act! No.! 9160,! as! related! to,! or! the! person! transacting! is! involved! in! or!
Amended,![September!21,!2016])! connected!to,!an!unlawful!activity!or!money!laundering!
offense,! the! 10/day! period! for! determination! shall! be!
Record*Keeping* reckoned! from! the! date! the! covered! person! knew! or!
! should!have!known!the!suspicious!transaction!indicator.!
Covered!persons!shall!maintain!and!safely!store!for!five! !
(5)! years! from! the! dates! of! transactions! all! records! of! Should!a!transaction!be!determined!to!be!both!a!covered!
customer! identification! and! transaction! documents! of! and!a!suspicious!transaction,!the!same!shall!be!reported!
their!customers.|||! as!a!suspicious!transaction.!(2016!Revised!Implementing!
! Rules! and! Regulations! of! Republic! Act! No.! 9160,! as!
Amended,![September!21,!2016])!
!

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 MERCANTILE FOREIGN INVESTMENTS ACT
!
Substance*and*Form*of*Reports* MateriallyJlinked*Accounts*
Covered! persons! shall! ensure! the! accuracy! and!
completeness!of!Covered!Transaction!Report!(CTR)!and! 1.!All! accounts! or! monetary! instruments! under! the!
Suspicious!Transaction!Report!(STR),which!shall!be!filed! name! of! the! person! whose! accounts,!
in! the! forms! prescribed! by! the! AMLC! and! shall! be! monetary!instruments!or!properties!are!the!
submitted!in!a!secured!manner!to!the!AMLC!in!electronic! subject! of! the! freeze! order! or! an! order! of!
form.|!(2016!Revised!Implementing!Rules!and!Regulations! inquiry;!
of! Republic! Act! No.! 9160,! as! Amended,! [September! 21,!
2.!All!accounts!or!monetary!instruments!held,!owned!
2016])!
or! controlled! by! the! owner! or! holder! of! the!
!
accounts,! monetary! instruments! or!
Confidentiality*of*Reporting*
properties! subject! of! the! freeze! order! or!
When! reporting! covered! or! suspicious! transactions,!
order!of!inquiry,!whether!such!accounts!are!
covered! persons! and! their! officers! and! employees! are!
held,! owned! or! controlled! singly! or! jointly!
prohibited!from!communicating,!directly!or!indirectly,!in!
with!another!person;!
any!manner!or!by!any!means,!to!any!person!or!entity,!or!
the! media,! the! fact! that! a! covered! or! suspicious! 3.!All!"In!Trust!For"!accounts!where!either!the!trustee!
transaction! has! been! or! is! about! to! be! reported,! the! or! the! trustor! pertains! to! a! person! whose!
contents! of! the! report,! or! any! other! information! in! accounts,! monetary! instruments! or!
relation!thereto.! properties!are!the!subject!of!the!freeze!order!
! or!order!of!inquiry;!
Any! information! about! such! reporting! shall! not! be!
published!or!aired,!in!any!manner!or!form,!by!the!mass! 4.!All!accounts!held!for!the!benefit!or!in!the!interest!of!
media,! or! through! electronic! mail,! or! other! similar! the! person! whose! accounts,! monetary!
devices.! instruments!or!properties!are!the!subject!of!
! the!freeze!order!or!order!of!inquiry;!and!
In! case! of! violation! thereof,! the! concerned! officer,! and!
employee,!of!the!covered!person!and!media!shall!be!held! 5.!All! other! accounts,! shares,! units! or! monetary!
criminally!liable.! instruments! that! are! similar,! analogous! or!
(2016! Revised! Implementing! Rules! and! Regulations! of! identical! to! any! of! the! foregoing.! ! (2016!
Republic!Act!No.!9160,!as!Amended,![September!21,!2016])! Revised! Implementing! Rules! and! Regulations!
* of! Republic! Act! No.! 9160,! as! Amended,!
Safe*Harbor*Provision* [September!21,!2016])!
No!administrative,!criminal!or!civil!proceedings!shall!lie!
!
against!any!person!for!having!made!a!CTR!or!STR!in!the!
regular! performance! of! his! duties! and! in! good! faith,!
Freeze*Order*(sec.*10,*RA*9160,*as*amended)*
whether! or! not! such! reporting! results! in! any! criminal!
prosecution! under! the!AMLA!or! any! other! Philippine! !
law.!(2016!Revised!Implementing!Rules!and!Regulations!of! Issuance*of*Freeze*Order;*Who*may*file*
Republic!Act!No.!9160,!as!Amended,![September!21,!2016])! Upon! verified!ex! parte!petition! by! the! AMLC! and! after!
! determination! that! probable! cause! exists! that! any!
Enrollment*with*the*AMLC’s*Reporting*System* monetary!instrument!or!property!is!in!any!way!related!
All! covered! persons! shall! register! with! the! AMLC's! to!an!unlawful!activity,!the!Court!of!Appeals!may!issue!a!
electronic!reporting!system!within!ninety!(90)!days!from! freeze! order,! which! shall! be! effective! immediately,!
the!effectivity!of!this!RIRR.!(2016!Revised!Implementing! directing! the! concerned! covered! persons! and!
Rules! and! Regulations! of! Republic! Act! No.! 9160,! as! government! agency! to! desist! from! allowing! any!
Amended,![September!21,!2016])! transaction,! withdrawal,! transfer,! removal,! conversion,!
* concealment,! or! other! disposition! of! the! subject!
See!Rule!IX'A!of!the!2016!RIRR!of!AMLA!for!the!Preventive! monetary! instrument! or! property|||!(2016! Revised!
Measures!for!Specific!Customers!and!Activities! Implementing! Rules! and! Regulations! of! Republic! Act! No.!
! 9160,!as!Amended,![September!21,!2016])!
! *
Probable*cause*required*for*the*issuance*of*Freeze*
Freezing*of*Monetary*Instrument*or*Property*
Order*is*different*from*that*required*for*the*
! institution*of*criminal*action*
Related*Accounts,*definition* *
refers!to!those!accounts,!the!funds!and!sources!of!which!
Ligot*v.*Republic,*G.R.*No.*176944,*[March*6,*2013]*
originated! from! and/or! are! materially/linked! to! the!
*
monetary!instruments!or!properties!subject!of!the!freeze!
The! legal! basis! for! the! issuance! of! a! freeze! order! is!
order! or! an! order! of! inquiry|||!(2016! Revised!
Section!10!of!RA!No.!9160,!as!amended!by!RA!No.!9194,!
Implementing! Rules! and! Regulations! of! Republic! Act! No.!
which!states:!
9160,!as!Amended,![September!21,!2016])!
!
*

#ToTheBarAndBeyond2018
 MERCANTILE FOREIGN INVESTMENTS ACT
!

Section! 10.!Freezing! of! Monetary! Instrument! or! Considering!the!intricate!and!diverse!web!of!interlocking!

Property.!—! The! Court! of! Appeals,! upon! application!ex! accounts! that! a! person! may! create! in! different! covered!
parte!by!the!AMLC!and!after!determination!that!probable! persons,!and!the!high!probability!that!these!accounts!are!
cause!exists!that!any!monetary!instrument!or!property!is! utilized! to! divert,! move,! conceal,! and! disguise! the!
in!any!way!related!to!an!unlawful!activity!as!defined!in! monetary! instrument! or! property! subject! of! the! freeze!
Section!3(i)!hereof,!may!issue!a!freeze!order!which!shall! order,!the!AMLC!may!include!in!its!petition!the!freezing!
be!effective!immediately.!The!freeze!order!shall!be!for!a! of!related!and!materially/linked!accounts.|(2016!Revised!
period!of!twenty!(20)!days!unless!extended!by!the!court.! Implementing! Rules! and! Regulations! of! Republic! Act! No.!
[italics!supplied]! 9160,!as!Amended,![September!21,!2016])!
! !
The! Ligots! claim! that! the! CA! erred! in! extending! the! Period*to*Resolve*Petition*
effectivity!period!of!the!freeze!order!against!them,!given! The!Court!of!Appeals!shall!resolve!the!petition!to!freeze!
that!they!have!not!yet!been!convicted!of!committing!any! within!24!hours!from!filing!thereof.!
of! the! offenses! enumerated! under! RA! No.! 9160! that! !
would! support! the! AMLC's! accusation! of! money/ Effectivity*of*Freeze*Order*
laundering!activity.! The!freeze!order!shall!be!effective!immediately!and!shall!
! not! exceed! six! (6)! months 1 !depending! upon! the!
We! do! not! see! any! merit! in! this! claim.! The! Ligots'! circumstances!of!the!case.!!
argument! is! founded! on! a! flawed! understanding! of! !
probable! cause! in! the! context! of! a! civil! forfeiture! A!freeze!order!cannot!be!issued!for!an!indefinite!period!
proceeding!or!freeze!order!application.!!! !
! Ligot*v.*Republic,*G.R.*No.*176944,*[March*6,*2013]*
Based! on! Section! 10! quoted! above,! there! are! only! two!
requisites! for! the! issuance! of! a! freeze! order:! (1)! the! A! freeze! order! is! an!extraordinary+ and+ interim+ relief!
application!ex! parte!by! the! AMLC! and! (2)! the! issued!by!the!CA!to!prevent!the!dissipation,!removal,!or!
determination!of!probable!cause!by!the!CA.!The!probable! disposal! of! properties! that! are! suspected! to! be! the!
cause!required!for!the!issuance!of!a!freeze!order!differs! proceeds!of,!or!related!to,!unlawful!activities!as!defined!
from!the!probable!cause!required!for!the!institution!of!a! in!Section!3!(i)!of!RA!No.!9160,!as!amended.!The!primary!
criminal!action,!and!the!latter!was!not!an!issue!before!the! objective! of! a! freeze! order! is! to*temporarily*
CA!nor!is!it!an!issue!before!us!in!this!case.! preserve*monetary!instruments!or!property!that!are!in!
! any! way! related! to! an! unlawful! activity! or! money!
As!defined!in!the!law,!the!probable!cause!required!for!the! laundering,!by!preventing!the!owner!from!utilizing!them!
issuance! of! a! freeze! order! refers! to! "such! facts! and! during!the!duration!of!the!freeze!order.!!The!relief!is!preJ
circumstances! which! would! lead! a! reasonably! discreet,! emptive!in!character,!meant!to!prevent!the!owner!from!
prudent! or! cautious! man! to! believe! that! an! unlawful! disposing!his!property!and!thwarting!the!State's!effort!in!
activity! and/or! a! money! laundering! offense! is! about! to! building! its! case! and! eventually! filing! civil! forfeiture!
be,!is!being!or!has!been!committed!and!that!the!account! proceedings!and/or!prosecuting!the!owner.!
or!any!monetary!instrument!or!property!subject!thereof! Our!examination!of!the!AntiJMoney*Laundering*Act*of*
sought!to!be!frozen!is!in!any!way!related!to!said!unlawful! 2001,!as!amended,!from!the!point!of!view!of!the!freeze!
activity!and/or!money!laundering!offense."!!! order!that!it!authorizes,!shows!that!the!law!is!silent!on!the!
! maximum! period! of! time! that! the! freeze! order! can! be!
In! other! words,! in! resolving! the! issue! of! whether! extended! by! the! CA.!The! final! sentence! of! Section! 10! of!
probable! cause! exists,! the! CA's! statutorily/guided! the!Anti/Money!Laundering!Act!of!2001!provides,!"[t]he!
determination's!focus!is!not!on!the!probable!commission! freeze! order! shall! be! for! a! period! of! twenty! (20)! days!
of! an! unlawful! activity! (or! money! laundering)! that! the! unless!extended!by!the!court."!In!contrast,!Section!55!of!
Office! of! the! Ombudsman! has! already! determined! to! the! Rule! in! Civil! Forfeiture! Cases! qualifies!the! grant! of!
exist,!but!on!whether!the!bank!accounts,!assets,!or!other! extension!"for! a! period! not! exceeding! six! months"!"for!
monetary!instruments!sought!to!be!frozen!are!in!any!way!
good!cause"!shown.!
related!to!any!of!the!illegal!activities!enumerated!under!
RA! No.! 9160,! as! amended.!Otherwise! stated,! probable! We!observe!on!this!point!that!nothing!in!the!law!grants!
cause!refers!to!the!sufficiency!of!the!relation!between!an! the!owner!of!the!"frozen"!property!any!substantive!right!
unlawful! activity! and! the! property! or! monetary! to! demand! that! the! freeze! order! be! lifted,! except! by!
instrument!which!is!the!focal!point!of!Section!10!of!RA! implication,!i.e.,!if! he! can! show! that! no! probable! cause!
No.!9160,!as!amended.! exists!or!if!the!20/day!period!has!already!lapsed!without!
* any!extension!being!requested!from!and!granted!by!the!
Freezing*of*Related*Accounts*and*MateriallyJLinked* CA.! Notably,! the! Senate! deliberations! on! RA! No.! 9160!
Accounts* even!suggest!the!intent!on!the!part!of!our!legislators!to!

1
Before, under the AMLA of 2001 and RA 9194, a freeze order issued In 2005, the Rule in Civil Forfeiture Cases took effect which provided
by the AMLC was effective for only a period not exceeding 15 days that a Freeze Order could be extended for a maximum of six (6)
and 20 days, respectively, unless extended “upon order of the court”. months.

#ToTheBarAndBeyond2018
 MERCANTILE FOREIGN INVESTMENTS ACT
!
make!the!freeze!order!effective!until!the!termination!of!
the!case,!when!necessary.!!!
The! silence! of! the! law,! however,! does! not! in! any! way!
affect! the! Court's! own! power!under! the! Constitution!to!
"promulgate! rules! concerning! the! protection! and!
enforcement!of!constitutional!rights!.!.!.!and!procedure!in!
all!courts."!!Pursuant!to!this!power,!the!Court!issued!A.M.!
No.! 05/11/04! SC,! limiting! the! effectivity! of! an! extended!
freeze! order! to! six! months! —! to! otherwise! leave! the!
grant! of! the! extension! to! the! sole! discretion! of! the! CA,!
which! may! extend! a! freeze! order! indefinitely! or! to! an!
unreasonable! amount! of! time! —! carries! serious!
implications!on!an!individual's!substantive!right!to!due!
process.!!This! right! demands! that! no! person! be! denied!
his!right!to!property!or!be!subjected!to!any!governmental!
action!that!amounts!to!a!denial.!!The!right!to!due!process,!
under! these! terms,! requires! a! limitation! or! at! least! an!
inquiry! on! whether! sufficient! justification! for! the!
governmental!action.!!!
In! this! case,! the! law! has! left! to! the! CA! the! authority! to!
resolve!the!issue!of!extending!the!freeze!order!it!issued.!
Without!doubt,!the!CA!followed!the!law!to!the!letter,!but!
it! did! so! by! avoiding! thefundamental! law's!command!
under!its!Section!1,!Article!III.!This!command,!the!Court!
—!under!its!constitutional!rule/making!power!—!sought!
to!implement!through!Section!53!(b)!of!the!Rule!in!Civil!
Forfeiture!Cases!which!the!CA!erroneously!assumed!does!
not!apply.!
The! Ligots'! case! perfectly! illustrates! the! inequity! that!
would! result! from! giving! the! CA! the! power! to! extend!
freeze!orders!without!limitations.!As!narrated!above,!the!
CA,!via!its!September!20,!2005!resolution,!extended!the!
freeze!order!over!the!Ligots'!various!bank!accounts!and!
personal! properties!"until! after! all! the! appropriate!
proceedings! and/or! investigations! being! conducted! are!
terminated."! By! its! very! terms,! the! CA! resolution!
effectively!bars!the!Ligots!from!using!any!of!the!property!
covered!by!the!freeze!order!until*after!an!eventual!civil*
forfeiture* proceeding* is* concluded!in! their!
favor!and!after!they!shall!have!been!adjudged!not!guilty!
of! the! crimes! they! are! suspected! of! committing.! These!
periods! of! extension! are! way! beyond! the! intent! and!
purposes! of! a! freeze! order! which! is! intended! solely! as!
an!interim*relief;!the!civil!and!criminal!trial!courts!can!
very!well!handle!the!disposition!of!properties!related!to!
a!forfeiture!case!or!to!a!crime!charged!and!need!not!rely!
on!the!interim!relief!that!the!appellate!court!issued!as!a!
guarantee!against!loss!of!property!while!the!government!
is!preparing!its!full!case.!The!term!of!the!CA's!extension,!
too,!borders!on!inflicting!a!punishment!to!the!Ligots,!in!
violation! of! their! constitutionally! protected! right! to! be!
presumed!innocent,!because!the!unreasonable!denial!of!
their!property!comes!before!final!conviction.!DASEac!
In!more!concrete!terms,!the!freeze!order!over!the!Ligots'!
properties!has!been!in!effect!since!2005,!while!the!civil!
forfeiture! case! —! per! the! Republic's! manifestation! —!
was!filed!only!in!2011!and!the!forfeiture!case!under!RA!
No.! 1379!—! per! the! petitioners'! manifestation! —! was!
#ToTheBarAndBeyond2018
filed!only!in!2012.!This!means!that!the*Ligots*have*not*
been* able* to* access* the* properties* subject* of* the*
freeze*order*for*six*years*or*so*simply*on*the*basis*of*
the* existence* of* probable* cause*to+ issue+ a+ freeze+
order,* which* was* intended* mainly* as* an* interim*
preemptive*remedy.!
As! correctly! noted! by! the! petitioners,! a! freeze! order! is!
meant!to!have!a!temporary!effect;!it!was!never!intended!
to!supplant!or!replace!the!actual!forfeiture!cases!where!
the!provisional!remedy!—!which!means,!the!remedy!is!an!
adjunct!of!or!an!incident!to!the!main!action!—!of!asking!
for!the!issuance!of!an!asset!preservation!order!from!the!
court!where!the!petition!is!filed!is!precisely!available.!For!
emphasis,! a! freeze! order! is! both!
a+preservatory!and+preemptive!remedy.!THCSAE!
To! stress,! the! evils! caused! by! the! law's! silence! on! the!
freeze!order's!period!of!effectivity!compelled!this!Court!
to!issue!the!Rule!in!Civil!Forfeiture!Cases.!Specifically,!the!
Court! fixed! the! maximum! allowable! extension! on! the!
freeze!order's!effectivity!at!six!months.!In!doing!so,!the!
Court!sought!to!balance!the!State's!interest!in!going!after!
suspected! money! launderers! with! an! individual's!
constitutionally/protected!right!not!to!be!deprived!of!his!
property! without! due! process! of! law,! as! well! as! to! be!
presumed!innocent!until!proven!guilty.!
To! our! mind,! the! six/month! extension! period!
is!ordinarily!sufficient!for!the!government!to!act!against!
the! suspected! money! launderer! and! to! file! the!
appropriate! forfeiture! case! against! him,! and! is! a!
reasonable! period! as! well! that! recognizes! the! property!
owner's!right!to!due!process.!In+this+case,+the+period+of+
inaction+of+six+years,+under+the+circumstances,+already+
far+exceeded+what+is+reasonable.!
Who*may*extend*the*effectivity*of*the*Freeze*Order*
On!motion!of!the!AMLC!filed!before!the!expiration!of!the!
original!period!of!the!freeze!order,!the!Court!of!Appeals!
may,!for!good!cause!shown,!extend!its!effectivity.!Upon!
the!timely!filing!of!such!motion!and!pending!resolution!
by! the! Court! of! Appeals,! the! freeze! order! shall! remain!
effective.||(2016! Revised! Implementing! Rules! and!
Regulations! of! Republic! Act! No.! 9160,! as! Amended,!
[September!21,!2016])!
!
No*prior*criminal*charge,*pendency*of*or*conviction*
necessary*
No!prior!criminal!charge,!pendency!of!or!conviction!for!
an! unlawful! activity! or! money! laundering! offense! is!
necessary!for!the!commencement!or!the!resolution!of!a!
petition! for! freeze! order.|!(2016! Revised! Implementing!
Rules! and! Regulations! of! Republic! Act! No.! 9160,! as!
Amended,![September!21,!2016])!
!
Freeze! order! is! not! dependent! on! a! separate! criminal!
charge,!much!less!does!it!depend!on!a!conviction!
*
Ligot*v.*Republic,*G.R.*No.*176944,*[March*6,*2013]*
 MERCANTILE FOREIGN INVESTMENTS ACT
!
Section!10!of!RA!No.!9160!(allowing!the!extension!of!the!
freeze! order)! and! Section! 28! (allowing! a! separate!
petition! for! the! issuance! of! a! freeze! order! to! proceed!
independently)!of!the!Rule!in!Civil!Forfeiture!Cases!are!
only!consistent!with!the!very!purpose!of!the!freeze!order,!
which! specifically! is! to! give! the! government! the!
necessary! time! to! prepare! its! case! and! to! file! the!
appropriate!charges!without!having!to!worry!about!the!
possible! dissipation! of! the! assets! that! are! in! any! way!
related!to!the!suspected!illegal!activity.!Thus,!contrary!to!
the! Ligots'! claim,! a! freeze! order! is! not! dependent! on! a!
separate!criminal!charge,!much!less!does!it!depend!on!a!
conviction.!
That! a! freeze! order! can! be! issued! upon! the! AMLC's!ex!
parte!application! further! emphasizes! the! law's!
consideration! of! how! critical! time! is! in! these!
proceedings.! As! we! previously! noted! in!Republic! v.!
Eugenio,!Jr.,!"[t]o!make!such!freeze!order!anteceded!by!a!
judicial! proceeding! with! notice! to! the! account! holder!
would!allow!for!or!lead!to!the!dissipation!of!such!funds!
even!before!the!order!could!be!issued."!
It! should! be! noted! that! the! existence! of! an! unlawful!
activity!that!would!justify!the!issuance!and!the!extension!
of!the!freeze!order!has!likewise!been!established!in!this!
case.!
From! the!ex! parte!application! and! the! Ombudsman's!
complaint,!we!glean!that!Lt.!Gen.!Ligot!himself!admitted!
that!his!income!came!from!his!salary!as!an!officer!of!the!
AFP.! Yet,! the! Ombudsman's! investigation! revealed! that!
the! bank! accounts,! investments! and! properties! in! the!
name! of! Lt.! Gen.! Ligot! and! his! family! amount! to! more!
than! Fifty/Four! Million! Pesos! (P54,000,000.00).! Since!
these! assets! are! grossly! disproportionate! to! Lt.! Gen.!
Ligot's! income,! as! well! as! the! lack! of! any! evidence! that!
the!Ligots!have!other!sources!of!income,!the!CA!properly!
found! that! probable! cause! exists! that! these! funds! have!
been! illegally! acquired.! On! the! other! hand,! the! AMLC's!
verified! allegations! in! its!ex! parte!application,! based! on!
the!complaint!filed!by!the!Ombudsman!against!Ligot!and!
his! family! for! violations! of! the!Anti/Graft! and! Corrupt!
Practices! Act,! clearly! sustain! the! CA's! finding! that!
probable! cause! exists! that! the! monetary! instruments!
subject! of! the! freeze! order! are! related! to,! or! are! the!
product!of,!an!unlawful!activity.!!
*
Rule*of*Procedure*
Proceedings! for! the! issuance! of! freeze! order! shall! be!
governed! by! the!"Rule! of! Procedure! in! Cases! of! Civil!
Forfeiture,! Asset! Preservation,! and! Freezing! of! Monetary!
Instrument,!Property,!or!Proceeds!Representing,!Involving,!
or!Relating!to!an!Unlawful!Activity!or!Money!Laundering!
Offense! under!Republic! Act! No.! 9160,! as! Amended"!(A.M.!
No.!05/11/04/SC).!(2016!Revised!Implementing!Rules!and!
Regulations! of! Republic! Act! No.! 9160,! as! Amended,!
[September!21,!2016])!
*
*
Motion*to*Lift*Freeze*Order*
#ToTheBarAndBeyond2018
*
A! person! whose! monetary! instrument! or! property! has!
been!frozen!may!file!a!motion!to!lift!the!freeze!order.!The!
court! must! resolve! the! motion! before! the! expiration! of!
the!freeze!order.|||(2016!Revised!Implementing!Rules!and!
Regulations! of! Republic! Act! No.! 9160,! as! Amended,!
[September!21,!2016])!
!
!
Lifting*the*Effects*of*the**Freeze*Order*
!
The! freeze! order! shall! be! deemed!ipso! facto!lifted! after!
its! expiration,! unless! a! money! laundering! complaint!
against! the! person! whose! monetary! instrument! or!
property! was! frozen,! or! a! petition! for! civil! forfeiture!
against!the!frozen!monetary!instrument!or!property,!has!
been! filed,! in! which! case! the! freeze! order! shall! remain!
effective!until!the!money!laundering!case!is!terminated!
or!an!asset!preservation!order!is!issued,!respectively.!
!
Upon! the! expiration! of! the! freeze! order,! the! covered!
person! shall! secure! a! written! confirmation! from! the!
AMLC! Secretariat! to! ascertain! if! a! petition! for! civil!
forfeiture!or!money!laundering!complaint!has!been!filed.!
(2016! Revised! Implementing! Rules! and! Regulations! of!
Republic!Act!No.!9160,!as!Amended,![September!21,!2016])!
!
Injunction*against*Freeze*Order*
No!court!shall!issue!a!temporary!restraining!order!or!a!
writ! of! injunction! against! any! freeze! order,! except! the!
Supreme!Court.|||!(2016!Revised!Implementing!Rules!and!
Regulations! of! Republic! Act! No.! 9160,! as! Amended,!
[September!21,!2016])!
*
*
*
Duties*of*Covered*Persons*and*Concerned*
Government*Agencies*upon*Receipt*of*Freeze*Order*
*
1.! Implement* Freeze* Order.—! Upon! receipt! of!
the! notice! of! the! freeze! order,! the! covered!
person! and! government! agency! concerned!
shall! immediately! freeze! the! monetary!
instrument! or! property! subject! thereof,! and!
shall!immediately!desist!from!and!not!allow!any!
transaction,! withdrawal,! transfer,! removal,!
conversion,! other! movement! or! concealment!
thereof.!
!
2.! Freeze* Related* Accounts.—! Upon! receipt! of!
the! freeze! order! and! upon! verification! by! the!
covered!person!that!there!are!accounts!related!
to!the!monetary!instrument!or!property!subject!
of! the! freeze! order,! the! covered! person! shall!
immediately! freeze! these! related! accounts!
wherever!these!may!be!found.!
!
If! the! related! accounts! cannot! be! determined!
within!twenty/four!(24)!hours!from!receipt!of!
the! freeze! order! due! to! the! volume! and/or!
 MERCANTILE FOREIGN INVESTMENTS ACT
!
complexity! of! the! transactions! or! any! other!
justifiable! factors,! the! covered! person! shall!
effect! the! freezing! of! the! related! accounts!
within!a!reasonable!period!and!shall!submit!a!
supplemental! return! thereof! to! the! Court! of!
Appeals!and!the!AMLC!within!twenty/four!(24)!
hours! from! the! freezing! of! said! related!
accounts.!
! capable!of!manual!delivery.!
3.! Furnish* Copy* of* Freeze* Order* to* Owner* or*
Holder.—! The! covered! person! and!
government! agency! concerned! shall! likewise!
immediately!furnish!a!copy!of!the!notice!of!the!
freeze! order! upon! the! owner! or! holder! of! the!
monetary! instrument! or! property! or! related!
accounts!subject!thereof.!
! property,!or!proceeds!as!of!the!time!the!
4.! Submit* Detailed* Return.—! Within! twenty/
four!(24)!hours!from!receipt!of!the!freeze!order,!
the! covered! person! and! government! agency!
concerned!shall!submit,!by!personal!delivery,!to!
the!Court!of!Appeals!and!to!the!AMLC,!a!written!
detailed!return!on!the!freeze!order.!
! v.! The! basis! for! the! identification! of! the!
The! covered! persons! shall! also! submit! to! the!
AMLC,! through! the! internet,! an! electronic!
detailed!return!in!a!format!to!be!prescribed!by!
the!latter.!
! !
5.! Contents* of* the* Detailed* Return.—! The!
detailed!return!on!the!freeze!order!shall!specify!
all! the! pertinent! and! relevant! information,!
which!shall!include!the!following:!
!
a.! For! covered! persons:! The! account! numbers!
and/or! description! of! the! monetary!
instrument,!property,!or!proceeds!involved;!
b.! For!concerned!government!agencies:!
i.! Certificates! of! title! numbers! of!
registered! real! property! and! the!
volumes! and! pages! of! the! registration!
books! of! the! Register! of! Deeds! where!
the!same!are!registered;!
ii.! Registration!in!the!Primary!Entry!Book!
and!corresponding!Registration!Book!in!
the! Register! of! Deeds! for! unregistered!
real!property;!!
iii.! Registration!with!the!Register!of!Deeds!
of! the! enabling! or! master! deed! for! a!
condominium! project,! declaration! of!
restrictions! relating! to! such!
condominium!project,!certificate!of!title!
conveying!a!condominium!and!notice!of!
assessment!upon!any!condominium;!
iv.! Tax! declarations! for! improvements!
built!on!land!owned!by!a!different!party,!
together! with! the! annotation! of! the!
contract! of! lease! on! the! title! of! the!
owner! of! the! land! as! registered! in! the!
Register!of!Deeds;!
#ToTheBarAndBeyond2018
v.! Certificates! of! registration! for! motor!
vehicles! and! heavy! equipment!
indicating! the! engine! numbers,! chassis!
numbers!and!plate!numbers;!
vi.! Certificates!of!numbers!for!seacraft;!
vii.! Registration!certificates!for!aircraft;!or!
viii.! Commercial! invoices! or! notarial!
identification! for! personal! property!
c.! For!covered!persons!and!government!agencies,!
whichever!are!applicable:!
i.! The! names! of! the! account! holders,!
personal! property! owners! or!
possessors,!or!real!property!owners!or!
occupants;!
ii.! The! value! of! the! monetary! instrument,!
assets!were!ordered!frozen;!
iii.! All!relevant!information!as!to!the!status!
and!nature!of!the!monetary!instrument,!
property,!or!proceeds;!
iv.! The! date! and! time! when! the! freeze!
order!was!served;!and!
related! accounts.! (2016! Revised!
Implementing! Rules! and! Regulations! of!
Republic! Act! No.! 9160,! as! Amended,!
[September!21,!2016])!
!
Authority*to*Inquire*into*Bank*Deposits*(sec.*11,*RA*
9160,*as*amended)*
!
Bank*Inquiry*with*Court*Order**
!
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!account,!including!related!accounts,!with!any!
banking! institution! or! non/bank! financial! institution,!
upon! order! by! the! Court! of! Appeals! based! on! an!ex!
parte!application!in!cases!of!violation!of!the!AMLA!when!
it!has!been!established!that!probable!cause!exists!that!the!
deposits! or! investments! involved,! including! related!
accounts,!are!in!any!way!related!to!an!unlawful!activity!
or! a! money! laundering! offense.! !(2016! Revised!
Implementing! Rules! and! Regulations! of! Republic! Act! No.!
9160,!as!Amended,![September!21,!2016])!
*
Elements* of* the* aboveJcited* provision* (sec.* 11,* RA*
9160)*
1.! Ex!parte!application!by!the!AMLC;!
2.! Determination!of!probable!cause!by!the!CA;!and!
3.! Exception! of! court! order! in! cases! involving!
unlawful!activities!defined!in!sections!3!(i)!(1),!
(2),!and!(12).!
!
Constitutionality* of* sec.* 11,* RA* 9160* visJàJvis*
Constitutional*due*process;*scope*and*parameters*of*
 MERCANTILE FOREIGN INVESTMENTS ACT
!
the* AMLC’s* investigatory* powers;* AMLC* does* not* into! and! approximates! a! quasi/judicial! agency's!
exercise*a*quasiJjudicial*function* inquisitorial!powers!lies!in!the!AMLC's!investigation!and!
! consequent! initial! determination! of! whether! certain!
Subido* Pagente* Certeza* Mendoza* and* Binay* Law* activities! are! constitutive! of! anti/money! laundering!
Offices* v.* Court* of* Appeals,* G.R.* No.* 216914,* offenses.!
[December*6,*2016])* !
! The! enabling! law! itself,! the!AMLA,! specifies! the!
Succinctly,! Section! 11! of! the!AMLA!providing! for!ex/ jurisdiction!of!the!trial!courts,!RTC!and!Sandiganbayan,!
parte!application! and! inquiry! by! the! AMLC! into! certain! over! money! laundering! cases,! and! delineates! the!
bank! deposits! and! investments! does! not! violate! investigative!powers!of!the!AMLC.!
substantive!due!process,!there!being!no!physical!seizure! !
of! property! involved! at! that! stage.! It! is! the! preliminary! Textually,! the!AMLA!is! the! first! line! of! defense! against!
and!actual!seizure!of!the!bank!deposits!or!investments!in! money!laundering!in!compliance!with!our!international!
question!which!brings!these!within!reach!of!the!judicial! obligation.!There!are!three!(3)!stages!of!determination,!
process,! specifically! a! determination! that! the! seizure! two! (2)! levels! of! investigation,! falling! under! three! (3)!
violated! due! process.!14!In! fact,!Eugenio!delineates! a! jurisdictions:!
bank!inquiry!order!under!Section!11!from!a!freeze!order! !
under!Section!10!on!both!remedies'!effect!on!the!direct! 1.!The! AMLC! investigates! possible! money! laundering!
objects,!i.e.,!the!bank!deposits!and!investments:! offences! and! initially! determines! whether! there! is!
! probable! cause! to! charge! any! person! with! a! money!
On!the!other!hand,!a!bank!inquiry!order!under!Section!11! laundering! offence! under! Section! 4! of! the!AMLA,!
does! not! necessitate! any! form! of! physical! seizure! of! resulting!in!the!filing!of!a!complaint!with!the!Department!
property! of! the! account! holder.! What! the! bank! inquiry! of!Justice!or!the!Office!of!the!Ombudsman;!!!
order! authorizes! is! the! examination! of! the! particular! !
deposits!or!investments!in!banking!institutions!or!non/ 2.!The!DOJ!or!the!Ombudsman!conducts!the!preliminary!
bank!financial!institutions.!The!monetary!instruments!or! investigation! proceeding! and! if! after! due! notice! and!
property! deposited! with! such! banks! or! financial! hearing! finds! probable! cause! for! money! laundering!
institutions! are! not! seized! in! a! physical! sense,! but! are! offences,!shall!file!the!necessary!information!before!the!
examined! on! particular! details! such! as! the! account! Regional!Trial!Courts!or!the!Sandiganbayan;!!
holder's!record!of!deposits!and!transactions.!Unlike!the! !
assets! subject! of! the! freeze! order,! the! records! to! be! !3.!The!RTCs!or!the!Sandiganbayan!shall!try!all!cases!on!
inspected! under! a! bank! inquiry! order! cannot! be! money!laundering,!as!may!be!applicable.!!
physically!seized!or!hidden!by!the!account!holder.!Said! !
records!are!in!the!possession!of!the!bank!and!therefore! Nowhere!from!the!text!of!the!law!nor!its!Implementing!
cannot!be!destroyed!at!the!instance!of!the!account!holder! Rules! and! Regulations! can! we! glean! that! the! AMLC!
alone! as! that! would! require! the! extraordinary! exercises! quasi/judicial! functions! whether! the! actual!
cooperation!and!devotion!of!the!bank.!! preliminary!investigation!is!done!simply!at!its!behest!or!
!! conducted! by! the! Department! of! Justice! and! the!
At!the!stage!in!which!the!petition!was!filed!before!us,!the! Ombudsman.!
inquiry! into! certain! bank! deposits! and! investments! by! Again,! we! hark! back! to!Lantion!citing!Ruperto! v.!
the!AMLC!still!does!not!contemplate!any!form!of!physical! Torres,!23/a!where!the!Court!had!occasion!to!rule!on!the!
seizure! of! the! targeted! corporeal! property.! From! this! functions!of!an!investigatory!body!with!the!sole!power!of!
cite,! we! proceed! to! examine! whether! Section! 11! of! the! investigation:!
law!violates!procedural!due!process.! !
! [Such!a!body]!does!not!exercise!judicial!functions!and!its!
As!previously!stated,!the!AMLA!now!specifically!provides! power!is!limited!to!investigating!facts!and!making!findings!
for! an!ex/parte! application! for! an! order! authorizing! in! respect! thereto.! The! Court! laid! down! the! test! of!
inquiry! or! examination! into! bank! deposits! or! determining!whether!an!administrative!body!is!exercising!
investments! which! continues! to! pass! constitutional! judicial! functions! or! merely! investigatory! functions:!
muster.!! Adjudication!signifies!the!exercise!of!power!and!authority!
! to!adjudicate!upon!the!rights!and!obligations!of!the!parties!
Procedural!due!process!is!essentially!the!opportunity!to! before!it.!Hence,!if!the!only!purpose!for!investigation!is!to!
be!heard.!16!In!this!case,!at!the!investigation!stage!by!the! evaluate! evidence! submitted! before! it! based! on! the! facts!
AMLC! into! possible! money! laundering! offenses,! SPCMB! and!circumstances!presented!to!it,!and!if!the!agency!is!not!
demands! that! it! have! notice! and! hearing! of! AMLC's! authorized! to! make! a! final! pronouncement! affecting! the!
investigation!into!its!bank!accounts.! parties,!then!there!is!an!absence!of!judicial!discretion!and!
! judgment.!
xxxx! !
! n! adjudicate! in! regard! to! the! rights! and! obligations! of!
The! confusion! on! the! scope! and! parameters! of! the! both!the!Requesting!State!and!the!prospective!extraditee.!
AMLC's! investigatory! powers! and! whether! such! seeps! Its! only! power! is! to! determine! whether! the! papers!

#ToTheBarAndBeyond2018
 MERCANTILE FOREIGN INVESTMENTS ACT
!
comply!with!the!requirements!of!the!law!and!the!treaty!
and,!therefore,!sufficient!to!be!the!basis!of!an!extradition!
petition.!Such!finding!is!thus!merely!initial!and!not!final.!
The!body!has!no!power!to!determine!whether!or!not!the!
extradition! should! be! effected.! That! is! the! role! of! the!
court.!The!body's!power!is!limited!to!an!initial!finding!of!
whether! or! not! the! extradition! petition! can! be! filed! in!
court.!
! Investigation!(NBI).!
It! is! to! be! noted,! however,! that! in! contrast! to! ordinary!
investigations,!the!evaluation!procedure!is!characterized!
by!certain!peculiarities.!Primarily,!it!sets!into!motion!the!
wheels! of! the! extradition! process.! Ultimately,! it! may!
result! in! the! deprivation! of! liberty! of! the! prospective!
extraditee.! This! deprivation! can! be! effected! at! two!
stages:!First,! the! provisional! arrest! of! the! prospective!
extraditee!pending!the!submission!of!the!request.!This!is!
so!because!the!Treaty!provides!that!in!case!of!urgency,!a!
contracting!party!may!request!the!provisional!arrest!of!
the! person! sought! pending! presentation! of! the! request!
(Paragraph![1],!Article!9,!RP/US!Extradition!Treaty),!but!
he!shall!be!automatically!discharged!after!60!days!if!no!
request!is!submitted!(Paragraph!4).!Presidential!Decree!
No.!1069!provides!for!a!shorter!period!of!20!days!after!
which!the!arrested!person!could!be!discharged!(Section!
20[d]).!Logically,!although!the!Extradition!Law!is!silent!
on! this! respect,! the! provisions! only! mean! that! once! a!
request! is! forwarded! to! the! Requested! State,! the!
prospective!extraditee!may!be!continuously!detained,!or!
if!not,!subsequently!rearrested!(Paragraph![5],!Article!9,!
RP/US!Extradition!Treaty),!for!he!will!only!be!discharged!
if!no!request!is!submitted.!Practically,!the!purpose!of!this!
detention! is! to! prevent! his! possible! flight! from! the!
Requested! State.!Second,the! temporary! arrest! of! the!
prospective! extraditee! during! the! pendency! of! the!
extradition! petition! in! court! (Section! 6,! Presidential!
Decree!No.!1069).!Clearly,!there!is!an!impending!threat!
to!a!prospective!extraditee's!liberty!as!early!as!during!the!
evaluation!stage.!It!is!not!only!an!imagined!threat!to!his!
liberty,!but!a!very!imminent!one.!
! right!could!have!taken!place;!the!NBI's!findings!were!still!
Because! of! these! possible! consequences,! we! conclude!
that!the!evaluation!process!is!akin!to!an!administrative!
agency! conducting! an! investigative! proceeding,! the!
consequences! of! which! are! essentially! criminal! since!
such! technical! assessment! sets! off! or! commences! the!
procedure!for,!and!ultimately,!the!deprivation!of!liberty!
of! a! prospective! extraditee.! As! described! by! petitioner!
himself,!this!is!a!"tool"!for!criminal!law!enforcement.!In!
essence,!therefore,!the!evaluation!process!partakes!of!the!
nature!of!a!criminal!investigation.!In!a!number!of!cases,!
we!had!occasion!to!make!available!to!a!respondent!in!an!
administrative! case! or! investigation! certain!
constitutional!rights!that!are!ordinarily!available!only!in!
criminal! prosecutions.! Further,! as! pointed! out! by! Mr.!
Justice! Mendoza! during! the! oral! arguments,! there! are!
rights!formerly!available!only!at!the!trial!stage!that!had!
been! advanced! to! an! earlier! stage! in! the! proceedings,!
such! as! the! right! to! counsel! and! the! right! against! self/
incrimination.!24!(Citations!omitted)!
! the!investigation!of!the!alleged!crime!of!falsification.!The!
#ToTheBarAndBeyond2018
In! contrast! to! the! disposition! in!Lantion!that! the!
evaluation! process! before! the! Department! of! Foreign!
Affairs! is! akin! to! an! administrative! agency! conducting!
investigative! proceedings! with! implications! on! the!
consequences! of! criminal! liability,i.e.,! deprivation! of!
liberty!of!a!prospective!extraditee,!the!sole!investigative!
functions! of! the! AMLC! finds! more! resonance! with! the!
investigative! functions! of! the! National! Bureau! of!
!
That! the! AMLC! does! not! exercise! quasi/judicial! powers!
and!is!simply!an!investigatory!body!finds!support!in!our!
ruling! in!Shu! v.! Dee.!25!In! that! case,! petitioner! Shu! had!
filed! a! complaint! before! the! NBI! charging! respondents!
therein!with!falsification!of!two!(2)!deeds!of!real!estate!
mortgage!submitted!to!the!Metropolitan!Bank!and!Trust!
Company!(Metrobank).! After! its! investigation,! the! NBI!
came!up!with!a!Questioned!Documents!Report!No.!746/
1098! finding! that! the! signatures! of! petitioner! therein!
which!appear!on!the!questioned!deeds!are!not!the!same!
as! the! standard! sample! signatures! he! submitted! to! the!
NBI.! Ruling! on! the! specific! issue! raised! by! respondent!
therein!that!they!had!been!denied!due!process!during!the!
NBI!investigation,!we!stressed!that!the!functions!of!this!
agency! are! merely! investigatory! and! informational! in!
nature:!!
!
[The!NBI]!has!no!judicial!or!quasi/judicial!powers!and!is!
incapable! of! granting! any! relief! to! any! party.! It! cannot!
even! determine! probable! cause.! The! NBI! is! an!
investigative! agency! whose! findings! are! merely!
recommendatory.! It! undertakes! investigation! of! crimes!
upon!its!own!initiative!or!as!public!welfare!may!require!
in! accordance! with! its! mandate.! It! also! renders!
assistance! when! requested! in! the! investigation! or!
detection! of! crimes! in! order! to! prosecute! the! persons!
responsible!
!
Since!the!NBI's!findings!were!merely!recommendatory,!
we! find! that! no! denial! of! the! respondent's! due! process!
subject!to!the!prosecutor's!and!the!Secretary!of!Justice's!
actions!for!purposes!of!finding!the!existence!of!probable!
cause.!We!find!it!significant!that!the!specimen!signatures!
in! the! possession! of! Metrobank! were! submitted! by! the!
respondents!for!the!consideration!of!the!city!prosecutor!
and! eventually! of! the! Secretary! of! Justice! during! the!
preliminary! investigation! proceedings.! Thus,! these!
officers!had!the!opportunity!to!examine!these!signatures.!
!
The!respondents!were!not!likewise!denied!their!right!to!
due! process! when! the! NBI! issued! the! questioned!
documents!report.!We!note!that!this!report!merely!stated!
that!the!signatures!appearing!on!the!two!deeds!and!in!the!
petitioner's! submitted! sample! signatures! were! not!
written!by!one!and!the!same!person.!Notably,!there!was!
no! categorical! finding! in! the! questioned! documents!
report!that!the!respondents!falsified!the!documents.!This!
report,!too,!was!procured!during!the!conduct!of!the!NBI's!
investigation!at!the!petitioner's!request!for!assistance!in!
 MERCANTILE FOREIGN INVESTMENTS ACT
!
report! is! inconclusive! and! does! not! prevent! the! Bank* inquiry* order* not* dependent* on* the* preJ
respondents! from! securing! a! separate! documents! existence*of*a*money*laundering*offense*
examination!by!handwriting!experts!based!on!their!own! *
evidence.! On! its! own,! the! NBI's! questioned! documents! Republic* v.* Eugenio,* Jr.,* G.R.* No.* 174629,* [February*
report! does! not! directly! point! to! the! respondents'! 14,*2008]*
involvement!in!the!crime!charged.!Its!significance!is!that,!
taken! together! with! the! other! pieces! of! evidence! Respondents! posit! that! a! bank! inquiry! order! under!
submitted! by! the! parties! during! the! preliminary! Section!11!may!be!obtained!only!upon!the!pre/existence!
investigation,! these! evidence! could! be! sufficient! for! of!a!money!laundering!offense!case!already!filed!before!
purposes!of!finding!probable!cause!—!the!action!that!the! the!courts.!The!conclusion!is!based!on!the!phrase!"upon!
Secretary!of!Justice!undertook!in!the!present!case.! order!of!any!competent!court!in!cases!of!violation!of!this!
! Act,"!the!word!"cases"!generally!understood!as!referring!
As! carved! out! in!Shu,! the! AMLC! functions! solely! as! an! to!actual!cases!pending!with!the!courts.!
investigative! body! in! the! instances! mentioned! in! Rule!
We! are! unconvinced! by! this! proposition,! and! agree!
5.b.!26!Thereafter,!the!next!step!is!for!the!AMLC!to!file!a!
instead! with! the! then! Solicitor! General! who! conceded!
Complaint! with! either! the! DOJ! or! the! Ombudsman!
that!the!use!of!the!phrase!"in!cases!of"!was!unfortunate,!
pursuant!to!Rule!6.b.!
yet!submitted!that!it!should!be!interpreted!to!mean!"in!
!
the!event!there!are!violations"!of!the!AMLA,!and!not!that!
Plainly,! the! AMLC's! investigation! of! money! laundering!
there!are!already!cases!pending!in!court!concerning!such!
offenses! and! its! determination! of! possible! money!
violations.!If! the! contrary! position! is! adopted,! then! the!
laundering! offenses,! specifically! its! inquiry! into! certain!
bank!inquiry!order!would!be!limited!in!purpose!as!a!tool!
bank! accounts! allowed! by! court! order,! does! not!
in! aid! of! litigation! of! live! cases,! and! wholly! inutile! as! a!
transform!it!into!an!investigative!body!exercising!quasi/
means!for!the!government!to!ascertain!whether!there!is!
judicial! powers.! Hence,! Section! 11! of! the!AMLA,!
sufficient!evidence!to!sustain!an!intended!prosecution!of!
authorizing!a!bank!inquiry!court!order,!cannot!be!said!to!
the!account!holder!for!violation!of!the!AMLA.!Should!that!
violate! SPCMB's! constitutional! right! to! procedural! due!
be! the! situation,! in! all! likelihood! the! AMLC! would! be!
process.!
virtually!deprived!of!its!character!as!a!discovery!tool,!and!
thus!would!become!less!circumspect!in!filing!complaints!
! against!suspect!account!holders.!After!all,!under!such!set/
! up! the! preferred! strategy! would! be! to! allow! or! even!
Period*to*Resolve*Application* encourage!the!indiscriminate!filing!of!complaints!under!
The!Court!of!Appeals!shall!resolve!the!application!within! the!AMLA!with!the!hope!or!expectation!that!the!evidence!
twenty/four!(24)!hours!from!filing!thereof.! of!money!laundering!would!somehow!surface!during!the!
* trial.! Since! the! AMLC! could! not! make! use! of! the! bank!
Inquiry*into*or*Examination*of*Related*Accounts* inquiry!order!to!determine!whether!there!is!evidentiary!
A!court!order!ex!parte!must!be!obtained!before!the!AMLC! basis! to! prosecute! the! suspected! malefactors,! not! filing!
can!inquire!into!the!related!accounts.!The!procedure!for! any! case! at! all! would! not! be! an! alternative.! Such!
the!ex!parte!application!for!an!order!of!inquiry!into!the! unwholesome! set/up! should! not! come! to! pass.! Thus!
principal!account!shall!be!the!same!for!that!of!the!related! Section! 11! cannot! be! interpreted! in! a! way! that! would!
accounts.! emasculate!the!remedy!it!has!established!and!encourage!
* the! unfounded! initiation! of! complaints! for! money!
Compliance* with* Article* III,* sections* 2* and* 3* of* the* laundering.!
Constitution*
The! authority! to! inquire! into! or! examine! the! main! Still,! even! if! the! bank! inquiry! order! may! be! availed! of!
account!and!the!related!accounts!shall!comply!with!the! without! need! of! a! pre/existing! case! under! the! AMLA,! it!
requirements!of!Article!III,!Sections!2!and!3!of!the!1987! does! not! follow! that! such! order! may! be! availed! of!ex!
Constitution.! parte.!There!are!several!reasons!why!the!AMLA!does!not!
* generally!sanction!ex!parte!applications!and!issuances!of!
* the!bank!inquiry!order.!
No*prior*criminal*charge,*pendency*of*or*conviction*
necessary* !
No!prior!criminal!charge,!pendency!of!or!conviction!for! BEFORE:* Ex* parte* application* is* only* available* in*
an! unlawful! activity! or! money! laundering! offense! is! Freeze*Order*and*not*in*Bank*Deposit*Inquiry*Order2*
necessary!for!the!commencement!or!the!resolution!of!an! *
application!for!bank!inquiry.! Republic* v.* Eugenio,* Jr.,* G.R.* No.* 174629,* [February*
! 14,*2008]*
!

2
Now, pursuant to RA 10167 of 2012, amending the AMLA, and under
the 2016 RIRR of RA 9160, the AMLC may now file an ex parte
application for both Freeze Order and Bank Deposit Inquiry.

#ToTheBarAndBeyond2018
 MERCANTILE FOREIGN INVESTMENTS ACT
!
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.!
! such!ex!parte!applications.!
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.!
! inquiry!order!under!Section!11!from!a!freeze!order!under!
That! the! AMLA! does! not! contemplate!ex!
parte!proceedings! in! applications! for! bank! inquiry!
orders! is! confirmed! by! the! present! implementing! rules!
and! regulations! of! the! AMLA,! promulgated! upon! the!
passage! of!R.A.! No.! 9194.! With! respect! to! freeze! orders!
under! Section! 10,! the! implementing! rules! do! expressly!
provide!that!the!applications!for!freeze!orders!be!filed!ex!
parte,!75!but!no!similar!clearance!is!granted!in!the!case!
of! inquiry! orders! under! Section! 11.!76!These!
implementing! rules! were! promulgated! by! the! Bangko!
Sentral!ng!Pilipinas,!the!Insurance!Commission!and!the!
#ToTheBarAndBeyond2018
Securities!and!Exchange!Commission,!77!and!if!it!was!the!
true!belief!of!these!institutions!that!inquiry!orders!could!
be! issued!ex! parte!similar! to! freeze! orders,! language! to!
that! effect! would! have! been! incorporated! in! the! said!
Rules.! This! is! stressed! not! because! the! implementing!
rules! could! authorize!ex! parte! applications! for! inquiry!
orders!despite!the!absence!of!statutory!basis,!but!rather!
because!the!framers!of!the!law!had!no!intention!to!allow!
!
Even! the! Rules! of! Procedure! adopted! by! this! Court!
in!A.M.! No.! 05/11/04/SC!78!to! enforce! the! provisions! of!
the! AMLA! specifically! authorize!ex! parte!applications!
with! respect! to! freeze! orders! under! Section! 10!79!but!
make! no! similar! authorization! with! respect! to! bank!
inquiry!orders!under!Section!11.!
!
The! Court! could! divine! the! sense! in! allowing!ex!
parte!proceedings! under! Section! 10! and! in! proscribing!
the!same!under!Section!11.!A!freeze!order!under!Section!
10! on! the! one! hand! is! aimed! at! preserving! monetary!
instruments! or! property! in! any! way! deemed! related! to!
unlawful!activities!as!defined!in!Section!3!(i)!of!the!AMLA.!
The! owner! of! such! monetary! instruments! or! property!
would!thus!be!inhibited!from!utilizing!the!same!for!the!
duration!of!the!freeze!order.!To!make!such!freeze!order!
anteceded! by! a! judicial! proceeding! with! notice! to! the!
account!holder!would!allow!for!or!lead!to!the!dissipation!
of!such!funds!even!before!the!order!could!be!issued.!
*
Sec.* 11* of* the* AMLA* does* not* violate* the*
constitutional* right* to* due* process;* AMLC* does* not*
exercise* quasiJjudicial* powers,* only* investigatory*
powers*
*
Subido* Pagente* Certeza* Mendoza* and* Binay* Law*
Offices* v.* Court* of* Appeals,* G.R.* No.* 216914,*
[December*6,*2016]*
*
Succinctly,! Section! 11! of! the!AMLA!providing! for!ex/
parte!application! and! inquiry! by! the! AMLC! into! certain!
bank! deposits! and! investments! does! not! violate!
substantive!due!process,!there!being!no!physical!seizure!
of! property! involved! at! that! stage.! It! is! the! preliminary!
and!actual!seizure!of!the!bank!deposits!or!investments!in!
question!which!brings!these!within!reach!of!the!judicial!
process,! specifically! a! determination! that! the! seizure!
violated! due! process.!In! fact,!Eugenio!delineates! a! bank!
Section! 10! on! both! remedies'! effect! on! the! direct!
objects,!i.e.,!the!bank!deposits!and!investments:*
*
On!the!other!hand,!a!bank!inquiry!order!under!Section!11!
does! not! necessitate! any! form! of! physical! seizure! of!
property! of! the! account! holder.! What! the! bank! inquiry!
order! authorizes! is! the! examination! of! the! particular!
deposits! or! investments! in! banking! institutions! or! non'
bank!financial!institutions.!The!monetary!instruments!or!
property! deposited! with! such! banks! or! financial!
institutions! are! not! seized! in! a! physical! sense,! but! are!
 MERCANTILE FOREIGN INVESTMENTS ACT
!
examined! on! particular! details! such! as! the! account! requirement,!yet!we!fail!to!see!any!unreasonable!burden!
holder's! record! of! deposits! and! transactions.! Unlike! the! cast! by! such! circumstance.! After! all,! as! earlier! stated,!
assets! subject! of! the! freeze! order,! the! records! to! be! requiring!notice!to!the!account!holder!should!not,!in!any!
inspected!under!a!bank!inquiry!order!cannot!be!physically! way,! compromise! the! integrity! of! the! bank! records!
seized!or!hidden!by!the!account!holder.!Said!records!are!in! subject!of!the!inquiry!which!remain!in!the!possession!and!
the! possession! of! the! bank! and! therefore! cannot! be! control!of!the!bank.!(Emphasis!supplied)!
destroyed! at! the! instance! of! the! account! holder! alone! as! !
that! would! require! the! extraordinary! cooperation! and! On! that! score,! the! SPCMB! points! out! that! the! AMLC's!
devotion!of!the!bank.!! bank! inquiry! is! preliminary! to! the! seizure! and!
! deprivation! of! its! property! as! in! a! freeze! order! under!
At!the!stage!in!which!the!petition!was!filed!before!us,!the! Section!10!of!the!AMLA!which!peculiarity!lends!itself!to!
inquiry! into! certain! bank! deposits! and! investments! by! a!sui!generis!proceeding!akin!to!the!evaluation!process!in!
the!AMLC!still!does!not!contemplate!any!form!of!physical! extradition! proceedings! pronounced! in!Secretary! of!
seizure! of! the! targeted! corporeal! property.! From! this! Justice! v.! Hon.! Lantion.!! Under! the! extradition! law,! the!
cite,! we! proceed! to! examine! whether! Section! 11! of! the! Secretary!of!Foreign!Affairs!is!bound!to!make!a!finding!
law!violates!procedural!due!process.! that! the! extradition! request! and! its! supporting!
! documents! are! sufficient! and! complete! in! form! and!
As!previously!stated,!the!AMLA!now!specifically!provides! substance!before!delivering!the!same!to!the!Secretary!of!
for! an!ex/parte!application! for! an! order! authorizing! Justice.!We!ruled:!
inquiry! or! examination! into! bank! deposits! or! !
investments! which! continues! to! pass! constitutional! [L]ooking! at! the! factual! milieu! of! the! case! before! us,! it!
muster.!! would! appear! that! there! was! failure! to! abide! by! the!
! provisions!of!Presidential!Decree!No.!1069.!For!while!it!is!
Procedural!due!process!is!essentially!the!opportunity!to! true! that! the! extradition! request! was! delivered! to! the!
be! heard.! In! this! case,! at! the! investigation! stage! by! the! Department! of! Foreign! Affairs! on! June! 17,! 1999,! the!
AMLC! into! possible! money! laundering! offenses,! SPCMB! following!day!or!less!than!24!hours!later,!the!Department!
demands! that! it! have! notice! and! hearing! of! AMLC's! of! Justice! received! the! request,! apparently! without! the!
investigation!into!its!bank!accounts.! Department! of! Foreign! affairs! discharging! its! duty!
! thoroughly! evaluating! the! same! and! its! accompanying!
We!are!not!unaware!of!the!obiter!in!Eugenio!and!cited!by! documents.!.!.!.!!
SPCMB,! voicing! misgivings! on! an! interpretation! of! the! !
former! Section! 11! of! the!AMLA!allowing! for!ex/ xxx!xxx!xxx!
parte!proceedings!in!bank!inquiry!orders,!to!wit:! !
! [T]he!record!cannot!support!the!presumption!of!regularity!
There!certainly!is!fertile!ground!to!contest!the!issuance!of! that! the! Department! of! Foreign! Affairs! thoroughly!
an!ex'parte!order.! Section! 11! itself! requires! that! it! be! reviewed! the! extradition! request! and! supporting!
established!that!"there!is!probable!cause!that!the!deposits! documents!and!that!it!arrived!at!a!well'founded!judgment!
or! investments! are! related! to! unlawful! activities,"! and! it! that! the! request! and! its! annexed! documents! satisfy! the!
obviously! is! the! court! which! stands! as! arbiter! whether! requirements!of!law.!.!.!.!.!
there! is! indeed! such! probable! cause.! The! process! of! !
inquiring! into! the! existence! of! probable! cause! would! The! evaluation! process,! just! like! the! extradition!
involve!the!function!of!determination!reposed!on!the!trial! proceedings,! proper! belongs! to! a! class! by! itself.! It! is!sui!
court.! Determination! clearly! implies! a! function! of! generis.! It! is! not! a! criminal! investigation,! but! it! is! also!
adjudication! on! the! part! of! the! trial! court,! and! not! a! erroneous!to!say!that!it!is!purely!an!exercise!of!ministerial!
mechanical! application! of! a! standard! pre'determination! functions.! At! such! stage,! the! executive! authority! has! the!
by! some! other! body.! The! word! "determination"! implies! power:! (a)! to! make! a! technical! assessment! of! the!
deliberation! and! is,! in! normal! legal! contemplation,! completeness!and!sufficiency!of!the!extradition!papers;!(b)!
equivalent!to!"the!decision!of!a!court!of!justice."! to!outrightly!deny!the!request!if!on!its!face!and!on!the!face!
! of!the!supporting!documents!the!crimes!indicated!are!not!
The! court! receiving! the! application! for! inquiry! order! extraditable;!and!(c)!to!make!a!determination!whether!or!
cannot!simply!take!the!AMLC's!word!that!probable!cause! not!the!request!is!politically!motivated,!or!that!the!offense!
exists!that!the!deposits!or!investments!are!related!to!an! is! a! military! one! which! is! not! punishable! under! non'
unlawful! activity.! It! will! have! to! exercise! its! own! military! penal! legislation.! Hence,! said! process! may! be!
determinative!function!in!order!to!be!convinced!of!such! characterized!as!an!investigative!or!inquisitorial!process!
fact.!The! account! holder! would! be! certainly! capable! of! in!contrast!to!a!proceeding!conducted!in!the!exercise!of!an!
contesting!such!probable!cause!if!given!the!opportunity! administrative!body's!quasi'judicial!power.!
to!be!apprised!of!the!pending!application!to!inquire!into! !
his!account;!hence!a!notice!requirement!would!not!be!an! In! administrative! law,! a! quasi/judicial! proceeding!
empty! spectacle.! It! may! be! so! that! the! process! of! involves:! (a)! taking! and! evaluation! of! evidence;! (b)!
obtaining! the! inquiry! order! may! become! more! determining! facts! based! upon! the! evidence! presented;!
cumbersome! or! prolonged! because! of! the! notice! and!(c)!rendering!an!order!or!decision!supported!by!the!

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 MERCANTILE FOREIGN INVESTMENTS ACT
!
facts!proved.!Inquisitorial!power,!which!is!also!known!as! !
examining! or! investigatory! power,! is! one! of! the! The! enabling! law! itself,! the!AMLA,! specifies! the!
determinative! powers! of! an! administrative! body! which! jurisdiction!of!the!trial!courts,!RTC!and!Sandiganbayan,!
better!enables!it!to!exercise!its!quasi/judicial!authority.! over! money! laundering! cases,! and! delineates! the!
This!power!allows!the!administrative!body!to!inspect!the! investigative!powers!of!the!AMLC.!
records! and! premises,! and! investigate! the! activities,! of! !
persons! or! entities! coming! under! its! jurisdiction,! or! to! Textually,! the!AMLA!is! the! first! line! of! defense! against!
require!disclosure!of!information!by!means!of!accounts,! money!laundering!in!compliance!with!our!international!
records,! reports,! testimony! of! witnesses,! production! of! obligation.!There!are!three!(3)!stages!of!determination,!
documents,!or!otherwise.! two! (2)! levels! of! investigation,! falling! under! three! (3)!
! jurisdictions!
The! power! of! investigation! consists! in! gathering,! !
organizing,!and!analyzing!evidence,!which!is!a!useful!aid! 1.!The! AMLC! investigates! possible! money! laundering!
or!tool!in!an!administrative!agency's!performance!of!its! offences! and! initially! determines! whether! there! is!
rule/making! or! quasi/judicial! functions.! Notably,! probable! cause! to! charge! any! person! with! a! money!
investigation!is!indispensable!to!prosecution.!(Emphasis! laundering! offence! under! Section! 4! of! the!AMLA,!
supplied,!citations!omitted)! resulting!in!the!filing!of!a!complaint!with!the!Department!
! of!Justice!or!the!Office!of!the!Ombudsman;!!!
The! submission! of! AMLC! requires! a! determination! !
whether!the!AMLC!is!an!administrative!body!with!quasi/ 2.!The!DOJ!or!the!Ombudsman!conducts!the!preliminary!
judicial!powers;!corollary!thereto,!a!determination!of!the! investigation! proceeding! and! if! after! due! notice! and!
jurisdiction!of!the!AMLC.! hearing! finds! probable! cause! for! money! laundering!
! offences,!shall!file!the!necessary!information!before!the!
Lim! v.! Gamosa!!is! enlightening! on! jurisdiction! and! the! Regional!Trial!Courts!or!the!Sandiganbayan;!!!
requirement! of! a! specific! grant! thereof! in! the! enabling! !
law.! We! declared! that! the! creation! of! the! National! 3.!The!RTCs!or!the!Sandiganbayan!shall!try!all!cases!on!
Commission! on! Indigenous! Peoples! (NCIP)! by! money!laundering,!as!may!be!applicable.!!!
the!Indigenous!Peoples!Rights!Act!(IPRA)!did!not!confer! !
it!exclusive!and!original,!nor!primary!jurisdiction,!in!all! Nowhere!from!the!text!of!the!law!nor!its!Implementing!
claims! and! disputes! involving! rights! of! IPs! and! ICCs! Rules! and! Regulations! can! we! glean! that! the! AMLC!
where!no!such!specific!grant!is!bestowed.!! exercises! quasi/judicial! functions! whether! the! actual!
! preliminary!investigation!is!done!simply!at!its!behest!or!
In! this! instance,! the! grant! of! jurisdiction! over! cases! conducted! by! the! Department! of! Justice! and! the!
involving!money!laundering!offences!is!bestowed!on!the! Ombudsman.!
Regional!Trial!Courts!and!the!Sandiganbayan!as!the!case! !
may!be.!In!fact,!Rule!5!of!the!IRR!is!entitled!Jurisdiction! Plainly,! the! AMLC's! investigation! of! money! laundering!
of! Money! Laundering! Cases! and! Money! Laundering! offenses! and! its! determination! of! possible! money!
Investigation!Procedures:! laundering! offenses,! specifically! its! inquiry! into! certain!
! bank! accounts! allowed! by! court! order,! does! not!
Rule!5.a.!Jurisdiction!of!Money!Laundering!Cases.!—!The! transform!it!into!an!investigative!body!exercising!quasi/
Regional!Trial!Courts!shall!have!the!jurisdiction!to!try!all! judicial! powers.! Hence,! Section! 11! of! the!AMLA,!
cases!on!money!laundering.!Those!committed!by!public! authorizing!a!bank!inquiry!court!order,!cannot!be!said!to!
officers!and!private!persons!who!are!in!conspiracy!with! violate! SPCMB's! constitutional! right! to! procedural! due!
such!public!officers!shall!be!under!the!jurisdiction!of!the! process.|!
Sandiganbayan.! !
! !
Rule!5.b.!Investigation!of!Money!Laundering!Offenses.!—! There*is*a*right*to*privacy*concerning*bank*accounts*
The!AMLC!shall!investigate:! in* the* Philippines* (Bank* Secrecy* Act);* AMLA*
(1)!suspicious!transactions;! provides*for*exceptions*to*the*confidentiality*of*bank*
(2)!covered! transactions! deemed! suspicious! after! an! deposits;* Owner* of* bank* account* is* not* precluded*
investigation!conducted!by!the!AMLC;! from*assailing*the*Order*
(3)!money!laundering!activities;!and! !
(4)!other!violations!of!the!AMLA,!as!amended.! Subdio* Pagente* Certeza* Mendoza* and* Binay* Law*
! Offices* v.* Court* of* Appeals,* G.R.* No.* 216914,*
The! confusion! on! the! scope! and! parameters! of! the! [December*6,*2016]*
AMLC's! investigatory! powers! and! whether! such! seeps! *
into! and! approximates! a! quasi/judicial! agency's! We!now!come!to!a!determination!of!whether!Section!11!
inquisitorial!powers!lies!in!the!AMLC's!investigation!and! is! violative! of! the! constitutional! right! to! privacy!
consequent! initial! determination! of! whether! certain! enshrined! in! Section! 2,! Article! III! of! the!Constitution.!
activities! are! constitutive! of! anti/money! laundering! SPCMB!is!adamant!that!the!CA's!denial!of!its!request!to!
offenses.! be!furnished!copies!of!AMLC's!ex/parte!application!for!a!

#ToTheBarAndBeyond2018
 MERCANTILE FOREIGN INVESTMENTS ACT
!
bank! inquiry! order! and! all! subsequent! pleadings,!
documents! and! orders! filed! and! issued! in! relation!
thereto,!constitutes!grave!abuse!of!discretion!where!the!
purported! blanket! authority! under! Section! 11:! (1)!
partakes! of! a! general! warrant! intended! to! aid! a! mere!
fishing! expedition;! (2)! violates! the! attorney/client!
privilege;! (3)! is! not! preceded! by! predicate! crime!
charging!SPCMB!of!a!money!laundering!offense;!and!(4)!
is!a!form!of!political!harassment![of!SPCMB's]!clientele.!
! peculiar!to!bank!deposits.!
We! shall! discuss! these! issues! jointly! since! the! assailed!
Section! 11! incorporates! by! reference! that! "[t]he!
authority! to! inquire! into! or! examine! the! main! and! the!
related!accounts!shall!comply!with!the!requirements!of!
Article!III,!Sections!2!and!3!of!the!1987!Constitution."!On!
this! point,! SPCMB! asseverates! that! "there! is! nothing! in!
the!AMLA!that! allows! or! justifies! the! withholding! of!
information! and/or! any! court! records! or! proceedings!
pertaining! to! an! examination! of! a! bank! account,!
especially!if!the!court!has!already!granted!the!authority!
to!conduct!the!examination."!
! investments! in! bonds! issued! by! the! Government! of! the!
The! theme! of! playing! off! privacy! rights! and! interest!
against! that! of! the! state's! interest! in! curbing! money!
laundering!offenses!is!recurring.!!
The!invoked!constitutional!provisions!read:!
! bureau! or! office,! except! upon! written! permission! of! the!
SEC.!2.!The!right!of!the!people!to!be!secure!in!their!persons,!
houses,!papers,!and!effects!against!unreasonable!searches!
and!seizures!of!whatever!nature!and!for!any!purpose!shall!
be!inviolable,!and!no!search!warrant!or!warrant!of!arrest!
shall! issue! except! upon! probable! cause! to! be! determined!
personally! by! the! judge! after! examination! under! oath! or!
affirmation!of!the!complainant!and!the!witnesses!he!may!
produce,! and! particularly! describing! the! place! to! be!
searched!and!the!person!or!things!to!be!seized.!
SEC.! 3.!(1)! The! privacy! of! communication! and!
correspondence! shall! be! inviolable! except! upon! lawful!
order!of!the!court,!or!when!public!policy!or!order!requires!
otherwise!as!prescribed!by!law.!
(2)! Any! evidence! obtained! in! violation! of! this! or! the!
preceding!section!shall!be!inadmissible!for!any!purpose!in!
any!proceeding.!
! repealed! or! amended,! the! legal! order! is! obliged! to!
Once!again,!Eugenio!offers!guidance:!
The! Court's! construction! of! Section! 11! of! the!AMLA!is!
undoubtedly! influenced! by! right! to! privacy!
considerations.!If!sustained,!petitioner's!argument!that!a!
bank! account! may! be! inspected! by! the! government!
following! an! ex! parte! proceeding! about! which! the!
depositor! would! know! nothing! would! have! significant!
implications! on! the! right! to! privacy,! a! right! innately!
cherished!by!all!notwithstanding!the!legally!recognized!
exceptions! thereto.! The! notion! that! the! government!
could! be! so! empowered! is! cause! for! concern! of! any!
individual!who!values!the!right!to!privacy!which,!after!all,!
embodies! even! the! right! to! be! "let! alone,"! the! most!
comprehensive! of! rights! and! the! right! most! valued! by!
civilized!people.!
! Court!as!constituting!an!additional!exception!to!the!rule!
#ToTheBarAndBeyond2018
One! might! assume! that! the! constitutional! dimension! of!
the!right!to!privacy,!as!applied!to!bank!deposits,!warrants!
our!present!inquiry.!We!decline!to!do!so.!Admittedly,!that!
question! has! proved! controversial! in! American!
jurisprudence.!Notably,!the!United!States!Supreme!Court!
in!U.S.! v.! Miller!held! that! there! was! no! legitimate!
expectation! of! privacy! as! to! the! bank! records! of! a!
depositor.!Moreover,!the!text!of!our!Constitution!has!not!
bothered! with! the! triviality! of! allocating! specific! rights!
!
However,!sufficient!for!our!purposes,!we!can!assert!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,!to!wit:!!
!
SECTION!2.!All!deposits!of!whatever!nature!with!banks!or!
banking! institutions! in! the! Philippines! including!
Philippines,! its! political! subdivisions! and! its!
instrumentalities,! are! hereby! considered! as! of! an!
absolutely!confidential!nature!and!may!not!be!examined,!
inquired!or!looked!into!by!any!person,!government!official,!
depositor,!or!in!cases!of!impeachment,!or!upon!order!of!a!
competent!court!in!cases!of!bribery!or!dereliction!of!duty!
of!public!officials,!or!in!cases!where!the!money!deposited!
or!invested!is!the!subject!matter!of!the!litigation.!
!
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!
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! this!
 MERCANTILE FOREIGN INVESTMENTS ACT
!
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,! certain! violations! of!
the! Comprehensive! Dangerous! Drugs! Act! of! 2002,!
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.!
! and!authorization!to!AMLC!to!undertake!an!inquiry!into!
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.!
! that! the! deposits! or! investments! are! related! to! an!
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! .! .! .! 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.! (Citations! omitted,! emphasis!
supplied)!
! we!specifically!discuss!the!CA's!denial!of!SPCMB's!letter!
From!the!foregoing!disquisition,!we!extract!the!following!
principles:!
1.!The!Constitution!did! not! allocate! specific! rights!
peculiar!to!bank!deposits;!
! required! to! demonstrate! and! ascertain! probable!
2.!The! general! rule! of! absolute! confidentiality! is! simply!
statutory,!i.e.,!not!specified!in!the!Constitution,!which!has!
been!affirmed!in!jurisprudence;!!
! defined!probable!cause,!thus:!
#ToTheBarAndBeyond2018
3.!Exceptions! to! the! general! rule! of! absolute!
confidentiality!have!been!carved!out!by!the!Legislature!
which!legislation!have!been!sustained,!albeit!subjected!to!
heightened!scrutiny!by!the!courts;!and!
!
4.!One! such! legislated! exception! is! Section! 11! of!
the!AMLA.!
!
The! warning! in!Eugenio!that! an!ex/parte!proceeding!
authorizing! the! government! to! inspect! certain! bank!
accounts!or!investments!without!notice!to!the!depositor!
would! have! significant! implications! on! the! right! to!
privacy!still!does!not!preclude!such!a!bank!inquiry!order!
to!be!allowed!by!specific!legislation!as!an!exception!to!the!
general!rule!of!absolute!confidentiality!of!bank!deposits.!
We!thus!subjected!Section!11!of!the!AMLA!to!heightened!
scrutiny! and! found! nothing! arbitrary! in! the! allowance!
certain!bank!accounts!or!deposits.!Instead,!we!found!that!
it! provides! safeguards! before! a! bank! inquiry! order! is!
issued,!ensuring!adherence!to!the!general!state!policy!of!
preserving! the! absolutely! confidential! nature! of!
Philippine!bank!accounts:!!
(1)!The!AMLC!is!required!to!establish!probable!cause!as!
basis!for!its!ex/parte!application!for!bank!inquiry!order;!
(2)!The!CA,!independent!of!the!AMLC's!demonstration!of!
probable!cause,!itself!makes!a!finding!of!probable!cause!
unlawful! activity! under! Section! 3! (i)! or! a! money!
laundering!offense!under!Section!4!of!the!AMLA;!
(3)!A! bank! inquiry! court! order!ex/parte!for! related!
accounts! is! preceded! by! a! bank! inquiry! court! order!ex/
parte!for! the! principal! account! which! court! order!ex/
parte!for! related! accounts! is! separately! based! on!
probable! cause! that! such! related! account! is! materially!
linked!to!the!principal!account!inquired!into;!and!
(4)!The!authority!to!inquire!into!or!examine!the!main!or!
principal!account!and!the!related!accounts!shall!comply!
with!the!requirements!of!Article!III,!Sections!2!and!3!of!
the!Constitution.!
!
The! foregoing! demonstrates! that! the! inquiry! and!
examination! into! the! bank! account! are! not! undertaken!
whimsically! and! solely! based! on! the! investigative!
discretion!of!the!AMLC.!In!particular,!the!requirement!of!
demonstration! by! the! AMLC,! and! determination! by! the!
CA,! of! probable! cause! emphasizes! the! limits! of! such!
governmental!action.!
!
We! will! revert! to! these! safeguards! under! Section! 11! as!
request! for! information! concerning! the! purported!
issuance!of!a!bank!inquiry!order!involving!its!accounts!
!
First.!The!AMLC!and!the!appellate!court!are!respectively!
cause.!Ret.! Lt.! Gen.! Ligot,! et! al.! v.! Republic! of! the!
Philippines,! which! dealt! with! the! adjunct! provisional!
remedy! of! freeze! order! under! Section! 10! of! the!AMLA,!
 MERCANTILE FOREIGN INVESTMENTS ACT
!
The!probable!cause!required!for!the!issuance!of!a!freeze!
order! differs! from! the! probable! cause! required! for! the!
institution!of!a!criminal!action,!.!.!.!.!
! trial.! Since! the! AMLC! could! not! make! use! of! the! bank!
As!defined!in!the!law,!the!probable!cause!required!for!the!
issuance! of! a! freeze! order! refers! to! "such! facts! and!
circumstances! which! would! lead! a! reasonably! discreet,!
prudent! or! cautious! man! to! believe! that! an! unlawful!
activity!and/or!money!laundering!offence!is!about!to!be,!
is!being!or!has!been!committed!and!that!the!account!or!
any! monetary! instrument! or! property! subject! thereof!
sought!to!be!frozen!is!in!any!way!related!to!said!unlawful!
activity!and/or!money!laundering!offense."!
! Guided!as!we!are!by!prior!holdings,!and!bound!as!we!are!
In! other! words,! in! resolving! the! issue! of! whether!
probable! cause! exits,! the! CA's! statutorily/guided!
determination's! focus! is! not! on! the! probable!
commissions! of! an! unlawful! activity! (or! money!
laundering)! that! the! office! of! the! Ombudsman! has!
already! determined! to! exist,! but! on! whether! the! bank!
accounts,!assets,!or!other!monetary!instruments!sought!
to! be! frozen! are!in! any! way! related!to! any! of! the! illegal!
activities! enumerated! under!R.A.! 9160,! as! amended.!
Otherwise!stated,!probable!cause!refers!to!the!sufficiency!
of! the! relation! between! an! unlawful! activity! and! the!
property!or!monetary!instrument!which!is!the!focal!point!
of!Section!10!of!RA!No.!9160,!as!amended.!.!.!.!.!(Emphasis!
supplied)!
! owner!of!the!account!from!challenging!the!basis!for!the!
Second.!As! regards! SPCMB's! contention! that! the! bank!
inquiry! order! is! in! the! nature! of! a! general!
warrant,!Eugenio!already!declared!that!Section!11,!even!
with! the! allowance! of! an!ex/parte!application! therefor,!
"is! not! a! search! warrant! or! warrant! of! arrest! as! it!
contemplates! a! direct! object! but! not! the! seizure! of!
persons! or! property."!It! bears! repeating! that! the! "bank!
inquiry!order"!under!Section!11!is!a!provisional!remedy!
to!aid!the!AMLC!in!the!enforcement!of!the!AMLA.!TCAScE!
! financial!institution!and!their!subsidiaries!and!affiliates!
Third.!Contrary!to!the!stance!of!SPCMB,!the!bank!inquiry!
order! does! not! contemplate! that! SPCMB! be! first!
impleaded! in! a! money! laundering! case! already! filed!
before!the!courts:!
! 1.! Kidnapping!for!ransom!under!Article!267!of!Act!
We! are! unconvinced! by! this! proposition,! and! agree!
instead! with! the! then! Solicitor! General! who! conceded!
that!the!use!of!the!phrase!"in!cases!of"!was!unfortunate,!
yet!submitted!that!it!should!be!interpreted!to!mean!"in!
the!event!there!are!violations"!of!the!AMLA,!and!not!that!
there!are!already!cases!pending!in!court!concerning!such!
violations.! If! the! contrary! position! is! adopted,! then! the!
bank!inquiry!order!would!be!limited!in!purpose!as!a!tool!
in! aid! of! litigation! of! live! cases,! and! wholly! inutile! as! a!
means!for!the!government!to!ascertain!whether!there!is!
sufficient!evidence!to!sustain!an!intended!prosecution!of!
the!account!holder!for!violation!of!the!AMLA.!Should!that!
be! the! situation,! in! all! likelihood! the! AMLC! would! be!
virtually!deprived!of!its!character!as!a!discovery!tool,!and!
thus!would!become!less!circumspect!in!filing!complaints!
against!suspect!account!holders.!After!all,!under!such!set/
up! the! preferred! strategy! would! be! to! allow! or! even!
#ToTheBarAndBeyond2018
encourage!the!indiscriminate!filing!of!complaints!under!
the!AMLA!with!the!hope!or!expectation!that!the!evidence!
of!money!laundering!would!somehow!surface!during!the!
inquiry!order!to!determine!whether!there!is!evidentiary!
basis! to! prosecute! the! suspected! malefactors,! not! filing!
any! case! at! all! would! not! be! an! alternative.! Such!
unwholesome! set/up! should! not! come! to! pass.! Thus!
Section! 11! cannot! be! interpreted! in! a! way! that! would!
emasculate!the!remedy!it!has!established!and!encourage!
the! unfounded! initiation! of! complaints! for! money!
laundering.!(Citation!omitted)!
!
by!the!requirements!for!issuance!of!a!bank!inquiry!order!
under! Section! 11! of! the!AMLA,! we! are! hard! pressed! to!
declare!that!it!violates!SPCMB's!right!to!privacy.!
!
Nonetheless,! although! the! bank! inquiry! order!ex/
parte!passes! constitutional! muster,! there! is! nothing! in!
Section!11!nor!the!implementing!rules!and!regulations!of!
the!AMLA!which! prohibits! the! owner! of! the! bank!
account,!as!in!this!instance!SPCMB,!to!ascertain!from!the!
CA,! post! issuance! of! the! bank! inquiry! order!ex/parte,! if!
his! account! is! indeed! the! subject! of! an! examination.!
Emphasized! by! our! discussion! of! the! safeguards! under!
Section!11!preceding!the!issuance!of!such!an!order,!we!
find! that! there! is! nothing! therein! which! precludes! the!
issuance!thereof.!
!
!
Bank*Inquiry*without*Court*Order*
!
The!AMLC!shall!issue!a!resolution!authorizing!the!AMLC!
Secretariat! to! inquire! into! or! examine! any! particular!
deposit! or! investment! account,! including! related!
accounts,! with! any! banking! institution! or! non/bank!
when!it!has!been!established!that!probable!cause!exists!
that! the! deposits! or! investments! involved,! including!
related! accounts,! are! in! any! way! related! to! any! of! the!
following!unlawful!activities:!
No.! 3815,! otherwise! known! as! the!Revised!
Penal!Code,!as!amended;!
2.! Sections!4,!5,!6,!8,!9,!10,!11,!12,!13,!14,!15!and!
16!of!Republic!Act!No.!9165,!otherwise!known!
as!the!Comprehensive!Dangerous!Drugs!Act!of!
2002;!
3.! Hijacking! and! other! violations! under!Republic!
Act!No.!6235;!destructive!arson!and!murder,!as!
defined! under! the!Revised! Penal! Code,! as!
amended;!
4.! Felonies!or!offenses!of!a!nature!similar!to!those!
mentioned!in!Section!3!(i)!(1),!(2)!and!(12)!of!
the!AMLA!which! are! punishable! under! the!
penal!laws!of!other!countries;!
 MERCANTILE FOREIGN INVESTMENTS ACT
!
5.! Terrorism!and!conspiracy!to!commit!terrorism! !
as! defined! and! penalized! under!Republic! Act! Duties*of*the*Covered*Persons*upon*Receipt*of*Bank*
No.!9372;!and! Inquiry*Order*
6.! Financing! of! terrorism! under! Section! 4! and! !
offenses!punishable!under!Sections!5,!6,!7!and! The!concerned!covered!persons!shall!immediately,!upon!
8!of!Republic!Act!No.!10168,!otherwise!known! receipt!of!the!court!order!or!AMLC!Resolution,!give!the!
as!the! Terrorism! Financing! Prevention! and! AMLC!and/or!its!Secretariat!full!access!to!all!information,!
Suppression! Act! of! 2012.! ! (2016! Revised! documents! or! objects! pertaining! to! the! deposit,!
Implementing!Rules!and!Regulations!of!Republic! investment,!account!and/or!transaction.!
Act! No.! 9160,! as! Amended,! [September! 21,! !
2016])! Certified! true! copies! of! the! documents! pertaining! to!
! deposit,!investment,!account!and/or!transaction!subject!
! of! the! bank! inquiry! shall! be! submitted! to! the! AMLC!
Judicial* order* not* necessary* if* deposits* or* Secretariat,!within!five!(5)!working!days!from!receipt!of!
investments* are* related* to* kidnapping* for* ransom,* the! court! order! or! AMLC! Resolution.! (2016! Revised!
etc.* Implementing! Rules! and! Regulations! of! Republic! Act! No.!
* 9160,!as!Amended,![September!21,!2016])!
Republic* v.* Eugenio,* Jr.,* G.R.* No.* 174629,* [February* !
14,*2008]* !
It! is! evident! that! Section! 11! does! not! specifically! Authority*of*the*BSP*to*Inquire*into*or*Examine*
authorize,!as!a!general!rule,!the!issuance!ex!parte!of!the! Bank*Accounts*
bank!inquiry!order.!We!quote!the!provision!in!full:! !
! In! the! course! of! a! periodic! or! special! examination,! the!
SEC.! 11.Authority! to! Inquire! into! Bank! Deposits.!—! BSP! may! inquire! into! or! examine! bank! accounts,!
Notwithstanding!the!provisions!of!Republic!Act!No.!1405,! including!customer!identification,!account!opening,!and!
as!amended,!Republic!Act!No.!6426,!as!amended,!Republic! transaction! documents,! for! the! purpose! of! checking!
Act!No.!8791,!and!other!laws,!the!AMLC!may!inquire!into! compliance!by!covered!persons!under!its!supervision!or!
or!examine!any!particular!deposit!or!investment!with!any! regulation!with!the!requirements!of!the!AMLA,!this!RIRR,!
banking!institution!or!non!bank!financial!institution!upon! and! other! AMLC! issuances.|||!(2016! Revised!
order!of!any!competent!court!in!cases!of!violation!of!this! Implementing! Rules! and! Regulations! of! Republic! Act! No.!
Act,!when! it! has! been! established! that! there! is! probable! 9160,!as!Amended,![September!21,!2016])!
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! Asset*Forfeiture*
that! no! court! order! shall! be! required! in! cases! involving! *
unlawful!activities!defined!in!Sections!3(i)1,!(2)!and!(12).! Civil*Forfeiture*
! !
To!ensure!compliance!with!this!Act,!the!Bangko!Sentral! Where*petition*for*civil*forfeiture*filed*
ng! Pilipinas! (BSP)! may! inquire! into! or! examine! any! Upon!determination!that!probable!cause!exists!that!any!
deposit! of! investment! with! any! banking! institution! or! monetary!instrument!or!property!is!in!any!way!related!
non! bank! financial! institution! when! the! examination! is! to!an!unlawful!activity!or!a!money!laundering!offense,!the!
made!in!the!course!of!a!periodic!or!special!examination,! AMLC!shall!file!with!the!regional!trial!court,!through!the!
in! accordance! with! the! rules! of! examination! of! the! Office!of!the!Solicitor!General,!a!verified!petition!for!civil!
BSP.!70!(Emphasis!supplied)! forfeiture.|||(2016! Revised! Implementing! Rules! and!
! Regulations! of! Republic! Act! No.! 9160,! as! Amended,!
Of!course,!Section!11!also!allows!the!AMLC!to!inquire!into! [September!21,!2016])!
bank!accounts!without!having!to!obtain!a!judicial!order! !
in!cases!where!there!is!probable!cause!that!the!deposits! Balance*between*due*process*and*the*government’s*
or! investments! are! related! to! kidnapping! for! interest*in*curbing*criminality,*i.e.*money*laundering*
ransom,!71!certain! violations! of! the! Comprehensive! and*the*predicate*crimes*underlying*it*
Dangerous! Drugs! Act! of! 2002,!72!hijacking! and! other! !
violations! under!R.A.! No.! 6235,! destructive! arson! and!
Ligot*v.*Republic,*G.R.*No.*176944,*[March*6,*2013]*
murder.!Since!such!special!circumstances!do!not!apply!in! !
this!case,!there!is!no!need!for!us!to!pass!comment!on!this! To! our! mind,! the! six/month! extension! period!
proviso.! Suffice! it! to! say,! the! proviso! contemplates! a! is!ordinarily!sufficient!for!the!government!to!act!against!
situation!distinct!from!that!which!presently!confronts!us,!
the! suspected! money! launderer! and! to! file! the!
and! for! purposes! of! the! succeeding! discussion,! our!
appropriate! forfeiture! case! against! him,! and! is! a!
reference! to! Section! 11! of! the! AMLA! excludes! said!
reasonable! period! as! well! that! recognizes! the! property!
proviso.! owner's!right!to!due!process.!In+this+case,+the+period+of+
!

#ToTheBarAndBeyond2018
 MERCANTILE FOREIGN INVESTMENTS ACT
!
inaction+of+six+years,+under+the+circumstances,+already+
far+exceeded+what+is+reasonable.!
We!are!not!unmindful!that!the!State!itself!is!entitled!to!
due! process.! As! a! due! process! concern,! we! do! not! say!
that+the+ six;month+ period+ is+ an+ inflexible+ rule!that!
would!result!in!the!automatic!lifting!of!the!freeze!order!
upon!its!expiration!in!all!instances.!An!inflexible!rule!may!
lend! itself! to! abuse! —! to! the! prejudice! of! the! State's!
legitimate!interests!—!where!the!property!owner!would!
simply!file!numerous!suits,!questioning!the!freeze!order!
during! the! six/month! extension! period,! to! prevent! the!
timely!filing!of!a!money!laundering!or!civil!forfeiture!case!
within! this! period.! With! the! limited! resources! that! our!
government!prosecutors!and!investigators!have!at!their!
disposal,! the! end/result! of! an! inflexible! rule! is! not!
difficult!to!see.!
We! observe,! too,! that! the! factual! complexities! and!
intricacies! of! the! case! and! other! matters! that! may! be!
beyond!the!government's!prosecutory!agencies'!control!
may!contribute!to!their!inability!to!file!the!corresponding!
civil!forfeiture!case!before!the!lapse!of!six!months.!Given!
these!considerations,!it!is!only!proper!to!strike!a!balance!
between! the! individual's! right! to! due! process! and! the!
government's! interest! in! curbing! criminality,!
particularly!money!laundering!and!the!predicate!crimes!
underlying!it.!
Thus,! as! a! rule,! the! effectivity! of! a! freeze! order! may! be!
extended! by! the! CA! for! a! period! not! exceeding! six!
months.!Before!or!upon!the!lapse!of!this!period,!ideally,!
the! Republic! should! have! already! filed! a! case! for! civil!
forfeiture! against! the! property! owner! with! the! proper!
courts! and! accordingly! secure! an! asset! preservation!
order! or! it! should! have! filed! the! necessary!
information.!! Otherwise,!the! property! owner! should!
already! be! able! to! fully! enjoy! his! property! without! any!
legal! process! affecting! it.! However,! should! it! become!
completely!necessary!for!the!Republic!to!further!extend!
the! duration! of! the! freeze! order,! it! should! file! the!
necessary!motion!before!the!expiration!of!the!six/month!
period!and!explain!the!reason!or!reasons!for!its!failure!to!
file! an! appropriate! case! and! justify! the! period! of!
extension! sought.! The! freeze! order! should! remain!
effective! prior! to! the! resolution! by! the! CA,! which! is!
hereby! directed! to! resolve! this! kind! of! motion! for!
extension!with!reasonable!dispatch.!
In! the! present! case,! we! note! that! the! Republic! has! not!
offered!any!explanation!why!it!took!six!years!(from!the!
time! it! secured! a! freeze! order)! before! a! civil! forfeiture!
case!was!filed!in!court,!despite!the!clear!tenor!of!the!Rule!
in! Civil! Forfeiture! Cases! allowing! the! extension! of! a!
freeze! order! for! only! a! period! of! six! months.! All! the!
Republic! could! proffer! is! its! temporal! argument! on! the!
inapplicability! of! the! Rule! in! Civil! Forfeiture! Cases;! in!
effect,! it! glossed! over! the! squarely/raised! issue! of! due!
process.! Under! these! circumstances,! we! cannot! but!
conclude!that!the!continued!extension!of!the!freeze!order!
beyond!the!six/month!period!violated!the!Ligots'!right!to!
due!process;!thus,!the!CA!decision!should!be!reversed.!
#ToTheBarAndBeyond2018
!
*
Asset*Forfeiture*in*Money*Laundering*Cases*
*
Where! there! is! conviction! for! money! laundering,! the!
court!shall!issue!a!judgment!of!forfeiture!in!favor!of!the!
Government! of! the! Philippines! with! respect! to! the!
monetary!instrument!or!property!found!to!be!proceeds!
of! an! unlawful! activity.|||!(2016! Revised! Implementing!
Rules! and! Regulations! of! Republic! Act! No.! 9160,! as!
Amended,![September!21,!2016])!
*
Claim*on*Forfeited*Assets*
*
Where!the!court!has!issued!an!order!of!forfeiture!of!the!
monetary! instrument! or! property! in! a! criminal!
prosecution! for! any! money! laundering! offense,! the!
offender!or!any!other!person!claiming!an!interest!therein!
may!apply,!by!verified!petition,!for!a!declaration!that!the!
same!legitimately!belongs!to!him!and!for!segregation!or!
exclusion! of! the! monetary! instrument! or! property!
corresponding!thereto.!The!verified!petition!shall!be!filed!
with! the! court! which! rendered! the! judgment! of!
forfeiture,!within!fifteen!(15)!days!from!the!date!of!the!
finality!of!the!order!of!forfeiture,!in!default!of!which!the!
said! order! shall! become! final! and! executory.! This!
provision! shall! also! apply! in! civil! forfeiture.! (2016!
Revised! Implementing! Rules! and! Regulations! of! Republic!
Act!No.!9160,!as!Amended,![September!21,!2016])!
*
*
Payment*in*Lieu*of*Forfeiture*
*
Where!the!court!has!issued!an!order!of!forfeiture!of!the!
monetary! instrument! or! property! subject! of! a! money!
laundering! offense,! and! said! order! cannot! be! enforced!
because!any!particular!monetary!instrument!or!property!
cannot,! with! due! diligence,! be! located,! or! it! has! been!
substantially! altered,! destroyed,! diminished! in! value! or!
otherwise! rendered! worthless! by! any! act! or! omission,!
directly! or! indirectly,! attributable! to! the! offender,! or! it!
has! been! concealed,! removed,! converted,! or! otherwise!
transferred!to!prevent!the!same!from!being!found!or!to!
avoid! forfeiture! thereof,! or! it! is! located! outside! the!
Philippines! or! has! been! placed! or! brought! outside! the!
jurisdiction!of!the!court,!or!it!has!been!commingled!with!
other! monetary! instruments! or! property! belonging! to!
either! the! offender! himself! or! a! third! person! or! entity,!
thereby! rendering! the! same! difficult! to! identify! or! be!
segregated! for! purposes! of! forfeiture,! the! court! may,!
instead! of! enforcing! the! order! of! forfeiture! of! the!
monetary! instrument! or! property! or! part! thereof! or!
interest! therein,! accordingly! order! the! convicted!
offender! to! pay! an! amount! equal! to! the! value! of! said!
monetary! instrument! or! property.! This! provision! shall!
apply! in! both! civil! and! criminal! forfeiture.|||!(2016!
Revised! Implementing! Rules! and! Regulations! of! Republic!
Act!No.!9160,!as!Amended,![September!21,!2016])!
*