Republic vs. Sandiganbayan,
G.R. Nos. 232724-27, February 15, 2021,
Third Division [LEONEN, J.]
Facts:
This Petition is an offshoot of a criminal case, People v. P/Dir. General Jesus Versoza. In Versoza, the Office of the Special Prosecutor charged former First Gentleman Jose Miguel T. Arroyo (Arroyo) with, among others, plunder for his involvement in the Philippine National Police's anomalous purchase of two secondhand helicopters.
The seller, Lionair, Inc., sold the helicopters as brand new, as required by law, even if they were already used. Lionair's president Archibald L. Po, however, testified that Arroyo was the helicopters' real owner. He alleged that Lionair imported the helicopters from the United States and sold it to Arroyo, who, in turn, deposited partial payment to Lionair's account with the Union Bank.
Lionair's savings account passbook reflected the following deposits:
|
Teller |
Date |
Transaction |
Amount (USD) |
|
S733 |
02/27/04 |
Credit Memo |
408,067.06 |
|
S733 |
02/27/04 |
Credit Memo |
509,065.41 |
|
T731 |
03/01/04 |
Cash |
148,217.538 |
To verify the source of the deposits, the Office of the Special Prosecutor presented Katrina Cruz-Dizon, the manager of the Union Bank branch where the account was maintained. Cruz-Dizon testified that the account was closed on March 6, 2006, and as five years had lapsed since, the bank has already disposed the account records. She suggested that the Bangko Sentral ng Pilipinas or the Anti-Money Laundering Council (Council) may have reports on the transactions, as banks are required to report covered transactions.
Thus, the Sandiganbayan, upon the Office of the Special Prosecutor's request, issued a Subpoena Duces Tecum and Ad Testificandum directing Executive Director Julia C. Bacay-Abad, then Secretariat of the Council, to testify and to produce Lionair's bank records.
The Council moved to quash the Subpoena, arguing that whatever information it has on Lionair's bank account is confidential under Republic Act No. 9160, or the Anti-Money Laundering Act. However, on March 28, 2017, the Sandiganbayan issued a Resolution denying the Motion to Quash.
The Sandiganbayan ruled that the Council's misgivings on the disclosure of the bank records were outweighed by the importance of these documents. The Council moved for reconsideration, but it was likewise denied. The Sandiganbayan noted that the Council was not present during the hearing of the Motion for Reconsideration, and that the accused and their counsels were not furnished copies of the pleading.
Petitioner argues that it cannot disclose Lionair's bank records because they are confidential. It avers that the disclosure of reports on covered and suspicious transactions is prohibited under Section 9(c) of the Anti-Money Laundering Act. It explains that Section 9(c) adheres to international standards, which recommend that financial institutions and their officers be prohibited from disclosing covered and suspicious transaction reports, or "tipping-off" that a case is being filed.
Petitioner likewise argues that respondent failed to reasonably describe the documents subpoenaed, saying that the description falls short of the requirement under the Rules of Court because the electronic database contains millions of reports from millions of entities. Without a specific description, petitioner says it would be difficult to trace the records demanded.
Respondent avers that while the Anti-Money Laundering Act does intend to preserve the confidentiality of bank transactions, its fundamental objective remains to prohibit money laundering through the reporting of covered and suspicious transactions.
Besides, respondent says that Lionair has waived its rights to confidentiality through a written permission, and granted the prosecution access to its bank account under the Foreign Currency Deposit Act. In any case, respondent asserts that petitioner's contentions are outweighed by the need to materialize the objectives of the Anti-Money Laundering Act and to enforce the principles of public accountability.
Issue:
Whether or not petitioner Anti-Money Laundering Council is required to furnish the respondent a copy of the Motion for Reconsideration.
Held:
Yes; Rule 15 of the Rules of Court lays down the basic rules on the filing and hearing of a motion: SECTION 4. Hearing of motion. - Except for motions which the court may act upon without prejudicing the rights of the adverse party, every written motion shall be set for hearing by the applicant.
Every written motion required to be heard and the notice of the hearing thereof shall be served in such a manner as to ensure its receipt by the other party at least three (3) days before the date of hearing, unless the court for good cause sets the hearing on shorter notice.
SECTION 5. Notice of hearing. - The notice of hearing shall be addressed to all parties concerned, and shall specify the time and date of the hearing which must not be later than ten (10) days after the filing of the motion.
SECTION 6. Proof of service necessary. - No written motion set for hearing shall be acted upon by the court without proof of service thereof.
Under Rule 15, Section 4, every written motion must be set for hearing by the applicant, except when the court deems it prejudicial to the other party. The motion shall then be served together with its notice of hearing in a manner that would ensure receipt by the other party at least three days before the date of hearing, unless the court, for good cause, sets the hearing on shorter notice.
Sections 5 and 6 state that the notice of hearing shall be addressed to the parties concerned and shall specify the time and date of the hearing. No motion shall be acted upon by the court without proof of service of its notice, except when the court is satisfied that the adverse party's rights are not affected. [Note: This Rule had been amended by 2019 Rules of Court].
Issue 2:
Whether or not Section 9(c) of the Anti-Money Laundering Act prohibits petitioner Anti-Money Laundering Council from disclosing confidential and suspicious transaction reports.
Held:
No; Anti-Money Laundering Council is the financial intelligence unit tasked to analyze the covered transaction reports and suspicious transaction reports submitted to it. It "shall require and receive [covered transaction reports] and [suspicious transaction reports] from covered persons"; "formulate guidelines and develop protocols necessary to require covered persons to submit relevant information"; and "access all relevant financial, administrative and law enforcement information for a holistic financial intelligence analysis of [covered transaction reports] and [suspicious transaction reports]."
Aside from collecting and analyzing reports of covered and suspicious transactions, the Anti-Money Laundering Council is also tasked to be the investigator and complainant in money laundering or money terrorism finance cases.
To perform these functions, the Anti-Money Laundering Council is authorized to "issue orders addressed to the appropriate [supervising authority] or the covered person to determine the true identity of the owner of any monetary instrument or property: (a) subject of [covered transaction report] or [suspicious transaction report]; (b) subject of request for assistance from a foreign State or jurisdiction; or (c) believed by the Council, on the basis of substantial evidence, to be, in whole or in part, wherever located, representing, involving, or related to, directly or indirectly, in any manner or by any means, the proceeds of any unlawful activity."
First, as the text of the Anti-Money Laundering Act reveals, petitioner is not one of the covered institutions prohibited from disclosing information on covered and suspicious transactions. Section 3(a) enumerates those that are prohibited from disclosing such information, and petitioner is not one of them.
Second, contrary to petitioner's claim, the rationale behind the prohibition does not extend and apply to it. To reiterate, covered institutions are precluded from disclosing the reports or the fact they are reported to petitioner, because it will impede the possible investigation on the covered and suspicious transactions. Unlike covered institutions, petitioner is mandated to investigate and use the information it has to institute cases against violators. The international standards that petitioner cites, which advocate confidentiality of the transaction reports and prohibits their disclosure, only apply to covered institutions. As the wording of the standards shows, the prohibition avoids "tipping-off" or situations where covered transactions will warn depositors and possible violators that they are being reported to petitioner.
Third, the prohibition and confidentiality provisions cannot apply to petitioner; otherwise, it would contravene its direct mandate under Section 7 of the Anti-Money Laundering Act.
Petitioner is not merely a repository of reports and information on covered and suspicious transactions. It is created precisely to investigate and institute charges against the offenders. Section 7 clearly states that it is tasked to institute civil forfeiture proceedings and other remedial proceedings, and to file complaints with the Department of Justice or the Office of the Ombudsman for anti-money laundering offenses.
In addition, the criminal prosecution of anti-money laundering offenses would be unduly hampered if petitioner were prohibited from disclosing information regarding covered and suspicious transactions. It would be antithetical to its own functions if petitioner were to refuse to participate in prosecuting anti-money laundering offenses by taking shelter in the confidentiality provisions of the Anti-Money Laundering Act.
Issue 3:
Whether or not the written permission of Lionair, Inc. is sufficient to disclose the transaction reports.
Held:
Yes; as a rule, foreign currency deposits are absolutely confidential, and thus, are not susceptible to examination and inquiry by any person. The law further mandates that foreign currency deposits are exempt from attachment, garnishment, or any other order or process of any court or government agency.
Nevertheless, this rule admits an exception. Section 8 itself states that a foreign currency deposit may be inquired into and examined if there is a written permission from the depositor.
Here, there is no question that the owner of the bank account submitted its written permission to allow the inquiry and examination of its accounts. Lionair, the owner of the dollar account subject of the Subpoena, waived its rights under the Foreign Currency Deposit Act and granted the prosecution access to its account.
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