Subido Pagente Certeza Mendoza
and Binay Law Offices Vs. The Court of Appeals, et al.
G.R. No. 216914. December 6, 2016
G.R. No. 216914. December 6, 2016
Challenged in this petition for certiorari and prohibition under Rule 65
of the Rules of Court is the constitutionality of Section 11 of Republic Act
(R.A.) No. 9160, the Anti-Money Laundering Act, as amended, specifically the
Anti-Money Laundering Council's authority to file with the Court of Appeals
(CA) in this case, an ex-parte application for inquiry into certain bank
deposits and investments, including related accounts based on probable cause
SPCMB undertook direct resort to this Court via this petition for certiorari
and prohibition on the following grounds:
The anti-money
laundering act is unconstitutional insofar as it allows the examination of a
bank account without any notice to the affected party
1. It violates the
person's right to due process; and
2. It violates the
person's right to privacy.
Even assuming
arguendo that the anti-money laundering act is constitutional, the respondents
committed grave abuse of discretion amounting to lack or excess of jurisdiction
considering that:
1. The refusal of
respondent presiding justice to provide petitioner with a copy of the ex-parte
application for bank examination filed by respondent amlc and all other
pleadings, motions, orders, resolutions, and processes issued by the respondent
court of appeals in relation thereto violates petitioner's right to due
process;
2. A carte blanche
authority to examine any and all transactions pertaining to petitioner's bank
accounts violates the attorney-client privilege which is sacrosanct in the
legal profession;
3. A blanket authority
to examine petitioner's bank accounts, including any and all transactions
therein from its opening up to the present, partakes the nature of a general
warrant that is clearly intended to aid a mere fishing expedition;
4. There is nothing in
the anti-money laundering act 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;
5. The petitioner did
not commit, nor has the petitioner been impleaded in any complaint involving
any predicate crime that would justify an inquiry into its bank accounts; and
6. The examination of
the petitioner's bank accounts is a form of political persecution or
harassment.
1. In their Comment,
the AMLC, through the Office of the Solicitor General (OSG), points out a
supposed jurisdictional defect of the instant petition, i.e., SPCMB failed to
implead the House of Representatives which enacted the AMLA and its amendments.
Is the defense tenable?
No.
On the sole
procedural issue of whether SPCMB ought to have impleaded Congress, the
contention of the OSG though novel is untenable. All cases questioning the
constitutionality of a law does not require that Congress be impleaded for
their resolution. The requisites of a judicial inquiry are elementary:
There must be an
actual case or controversy; party;
The question of constitutionality
must be raised by the proper party;
The constitutional
question must be raised at the earliest possible opportunity; and
The decision of the
constitutional question must be necessary to the determination of the case
itself.
2. Decide on the
constitutionality of section 11 of the AMLA.
The Supreme Court
affirms the constitutionality of Section 11 of the AMLA allowing the ex-parte
application by the AMLC for authority to inquire into, and examine, certain
bank deposits and investments.
3. State Section 11 of
Republic Act (R.A.) No. 9160.
The statute reads:
SEC. 11. Authority
to Inquire into Bank Deposits. - 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, including related accounts, with any banking institution or
non-bank financial institution upon order of any competent court based on an ex
parte application in cases of violations of this Act, when it has been
established that there is probable cause that the deposits or investments,
including related accounts involved, are related to an unlawful activity as
defined in Section 3(i) hereof or a money laundering offense under Section 4
hereof; except that no court order shall be required in cases involving
activities defined in Section 3(i)(1), (2), and (12) hereof, and felonies or
offenses of a nature similar to those mentioned in Section 3(i)(1), (2), and
(12), which are punishable under the penal laws of other countries, and
terrorism and conspiracy to commit terrorism as defined and penalized under
Republic Act No. 9372.
The Court of
Appeals shall act on the application to inquire into or examine any deposit or
investment with any banking institution or non-bank financial institution
within twenty-four (24) hours from filing of the application.
To ensure
compliance with this Act, the Bangko Sentral ng Pilipinas may, in the course of
a periodic or special examination, check the compliance of a covered
institution with the requirements of the AMLA and its implementing rules and
regulations.
For purposes of
this section, 'related accounts' shall refer to accounts, the funds and sources
of which originated from and/or are materially linked to the monetary
instrument(s) or property(ies) subject of the freeze order(s).
A court order ex
parte must first be obtained before the AMLC can inquire into these related
Accounts: Provided, That the procedure for the ex parte application of the ex
parte court order for the principal account shall be the same with that of the
related accounts.
The authority to
inquire into or examine the main account and the related accounts shall comply
with the requirements of Article III, Sections 2 and 3 of the 1987
Constitution, which are hereby incorporated by reference.
4. State the due
process clause of the Constitution.
The due process
clause of the Constitution reads:
SECTION 1. No
person shall be deprived of life, liberty or property without due process of
law, nor shall any person be denied the equal protection of the laws.
5. What are the two
aspects of due process?
The right to due
process has two aspects: (1) substantive which deals with the extrinsic and
intrinsic validity of the law; and (2) procedural which delves into the rules
government must follow before it deprives a person of its life, liberty or
property.
6. What is procedural
due process?
Procedural due process
is essentially the opportunity to be heard.
7. What are the
elements of Section 11 of the AMLA?
As presently
worded, Section 11 of the AMLA has three elements: (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).
8. May a bank inquiry
order under Section 11 of the AMLA be issued ex parte?
Section 11 does not
specifically authorize, as a general rule, the issuance ex-parte 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.
Section 11 also
allows the AMLC to inquire into bank accounts without having to obtain a
judicial order in cases 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.
9. Would the ex parte
application and inquiry by the AMLC into certain bank deposits and investments
violate substantive due process of law?
No.
It 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.
10. Would the ex parte
application and inquiry by the AMLC into certain bank deposits and investments
violate procedural due process of law?
No.
AMLC's
investigation of money laundering offenses and its determination of possible
money laundering offenses, specifically its inquiry into certain bank accounts
allowed by court order, does not transform it into an investigative body
exercising quasi-judicial powers. Hence, Section 11 of the AMLA, authorizing a
bank inquiry court order, cannot be said to violate SPCMB's constitutional
right to procedural due process.
11. Is Section 11
violative of the constitutional right to privacy?
No.
The following principles
applies:
The Constitution
did not allocate specific rights peculiar to bank deposits;
The general rule of
absolute confidentiality is simply statutory, i.e. not specified in the
Constitution, which has been affirmed in jurisprudence;
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
One such legislated
exception is Section 11 of the AMLA.
Moreover, the Court
finds that 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.
First. The AMLC and
the appellate court are respectively required to demonstrate and ascertain
probable cause. 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."34 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. 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.
In addition,
nothing therein which precludes the owner of the account from challenging the
basis for the issuance thereof.
The appellate court
denied SPCMB's letter-request for confirmation that the AMLC had applied
(ex-parte) for, and was granted, a bank inquiry order to examine SPCMB's bank
accounts relative to the investigation conducted on Vice-President Binay's
accounts. Did the appellate court, through the Presiding Justice, gravely abuse
its discretion? Decide with reason.
No.
Under the rules,
the Office of the Presiding Justice is strictly mandated not to disclose,
divulge, or communicate to anyone directly or indirectly, in any manner or by
any means, the fact of the filing of the petition brought before [the Court of
Appeals] by the [AMLC], its contents and even its entry in the logbook.
12. When is there a
grave abuse of discretion?
An act of a court
or tribunal can only be considered tainted with grave abuse of discretion when
such act is done in a capricious or whimsical exercise of judgment as is
equivalent to lack of jurisdiction. It is well-settled that the abuse of
discretion to be qualified as "grave" must be so patent or gross as
to constitute an evasion of a positive duty or a virtual refusal to perform the
duty or to act at all in contemplation of law.36 In this relation, case law
states that not every error in the proceedings, or every erroneous conclusion
of law or fact, constitutes grave abuse of discretion.37 The degree of gravity,
as above-described, must be met.
13. What is a
justiciable controversy?
A justiciable
controversy refers to an existing case or controversy that is appropriate or
ripe for judicial determination, not one that is conjectural or merely
anticipatory.
14. Define probable
cause.
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 the
AMLA, as amended.
15. What court has
jurisdiction over cases involving money laundering offences?
In this instance,
the grant of jurisdiction over cases involving money laundering offences is
bestowed on the Regional Trial Courts and the Sandiganbayan as the case may be.
In fact, Rule 5 of the IRR is entitled Jurisdiction of Money Laundering Cases
and Money Laundering Investigation Procedures:
Rule 5.a.
Jurisdiction of Money Laundering Cases. The Regional Trial Courts shall have
the jurisdiction to try all cases on money laundering. Those committed by
public officers and private persons who are in conspiracy with such public
officers shall be under the jurisdiction of the Sandiganbayan.
Rule 5.b.
Investigation of Money Laundering Offenses. - The AMLC shall investigate:
(1) suspicious
transactions;
(2) covered
transactions deemed suspicious after an investigation conducted by the AMLC;
(3) money
laundering activities; and
(4) other
violations of the AMLA, as amended.
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