In addressing the Supreme Court temporary restraining order (TRO) against the opening in the impeachment trial of bank dollar deposits, absolute secrecy of which is mandated under RA 6426, the Senate Impeachment Court may:
(1) save face, issue a precedent-setting pronouncement of its sole authority over the matter, have a showdown with the Supreme Court, and tempt a constitutional crisis; or
(2) lose face and comply meekly with the Supreme Court TRO.
Thus, the Senate Impeachment Court is in a dilemma because neither of the two options will produce a satisfactory and winning solution to it and to many Filipinos, in the process further dividing the nation.
POSSIBLE WAY OF AVOIDING UNWANTED CONFRONTATION BETWEEN THE SENATE IMPEACHMENT COURT AND SUPREME COURT
It appears, however, that there is a way out to the looming showdown between the Senate Impeachment Court and Supreme Court on the latter’s TRO on dollar deposits. This face-saving alternative option has to be seriously explored to avoid a destructive head-on collision between the two courts.
To avoid a precedent-setting subservience to the Supreme Court, the Senate Impeachment Court may declare itself as the sole authority on the impeachment case, then make possible the opening of secret bank dollar deposits without violating RA 6426 and the Supreme Court TRO—through invoking Section 11 of RA 9160 or the Anti-Money Laundering Act (AMLA).
RA 9160 explicitly overrides and amends the absolute secrecy of deposits under RA 6426. As treated in more detail in the herein ATTACHMENT—a slightly revised version of my previous email—a competent court can order the Anti-Money Laundering Council (AMLC) to inquire or examine secret bank accounts as warranted.
To quote from the herein ATTACHMENT:
“If issued, the Senate Impeachment Court ’s order to AMLC to inquire or examine secret bank accounts pursuant to Section 11 of RA 9160 presupposes submission and disclosure of result of examination to the court. In effect, what is prohibited under the older law, RA 6426, is allowed under the newer law, RA 9160. In this regard, Section 22, the repealing clause of RA 9160, expressly provides that any contrary provisions of RA 1405 and RA 6426 are repealed or modified accordingly. Therefore, aside from the frequently cited Salvacion case, there is another subsequent clear exception to the absolute secrecy of bank deposits under RA 6426, and that is the cited Section 11 of RA 9160 (shown in ANNEX A).
For the information and attention of all concerned.
MARCELO L. TECSON
A Concerned Citizen
San Miguel, Bulacan
February 12, 2012
================================
ATTACHMENT
Subject: IMPEACHMENT COURT Should Order AMLC to Inquire into CJ Corona’s Peso and DOLLAR Bank DEPOSITS pursuant to Section 11 of RA 9160 (slightly revised, as well as corrected re $700,000 alleged dollar deposit is with PSBank, not BPI)
Re Dean Andy Bautista's column "Denying a dénouement" in the February 11, 2012 issue of The Philippine Star (ANNEX C), please note that under Section 11 of RA 9160, or the Anti-Money Laundering Act of 2001, if with probable cause that there is money laundering offense, a competent court can order the Anti-Money Laundering Council (AMLC) to inquire or examine secret bank accounts notwithstanding the prohibition under Republic Act No. 1405, as amended; (and) Republic Act No. 6426, as amended... (ANNEX A).
In establishing probable cause, the exposé of more than P31 MILLION peso deposits in BPI and PSBank, taken together with multi-million-peso condo units not declared and under-declared in SALNs—way beyond the legal income of CJ Renato Corona and spouse—is proof enough of probable money laundering offense.
To determine the total extent of such offense for purposes of:
(1) ascertaining the degree, materiality, seriousness, or severity of CJ Corona's violation of the constitutionally mandated sworn declaration and disclosure of truthful statements of ASSETS, liabilities, and net worth in the manner provided by law (as required under Section 17, Article XI of the Constitution),
(2) determining any warranted tax assessments on untaxed wealth under the Tax Code,
(3) forfeiture of unexplained wealth under RA 1379, and
(4) filing of any warranted criminal complaint before the Ombudsman against CJ Corona under all applicable laws,
the inquiry or examination by AMLC of his alleged dollar account with PSBank has become imperative. [CJ Corona already admitted before media the existence of his dollar account (Perseus Echeminada, "Disclosure in due time, says CJ," The Philippine Star, February 11, 2012)]. Otherwise, what is the use of enacting RA 9160?
If issued, the Senate Impeachment Court’s order to AMLC to inquire or examine secret bank accounts pursuant to Section 11 of RA 9160 presupposes submission and disclosure of result of examination to the court. In effect, what is prohibited under the older law, RA 6426, is allowed under the newer law, RA 9160. In this regard, Section 22, the repealing clause of RA 9160, expressly provides that any contrary provisions of RA 1405 and RA 6426 are repealed or modified accordingly. Therefore, aside from the frequently cited Salvacion case, there is another subsequent clear exception to the supposed absolute secrecy of bank deposits under RA 6426, and that is the cited Section 11 of RA 9160 (shown in ANNEX A).
WHAT HAS THE AMLC DONE AND WILL FURTHER DO TO CJ RENATO CORONA'S BANK DEPOSITS THAT APPEAR WAY BEYOND HIS LEGAL INCOME AND, THEREFORE, HAVE TO BE LOOKED INTO UNDER THE ANTI-MONEY LAUNDERING ACT?
1. Did PSBank and BPI comply with the required reporting of suspicious deposits to the Anti-Money Laundering Council pursuant to the Anti-Money Laundering Act and its implementing regulations?
Under RA 9160, BPI and PSBank are required to know their client-depositors. This includes knowing their legal income from exercise of profession, employment, and business. As CJ Corona made multi-million-peso deposits with both BPI and PSBank, each of which is much higher than the present P500,000 threshold (ANNEX B) for the required reporting of suspicious deposits (or those beyond the known legal income of depositors), did these two banks notify the AMLC of CJ Corona's suspicious multi-million-peso deposits beyond the cited P500,000 threshold?
In the case of PSBank, if true, the alleged $700,000 deposit, taken together with the now known actual multi-million-peso peso deposits, certainly needed prompt verification by the bank. If CJ Corona failed to submit any concrete and valid explanation as to the legality of its source, then this dollar deposit has to be reported to AMLC. To begin with, without such explanation, the amount appears in violation of Bangko Sentral regulations on allowable non-trade dollar purchases, the limit of which was raised from $30,000 to $60,000 in October 2010, exceeded many times over by the $700,000 alleged deposit.
2. If reported, what did AMLC do to the reported suspicious deposits?
If not reported, what will BSP do against BPI and PSBank for such failure to comply to RA 9160 and its implementing regulations?
Further, considering that the questionable deposits are now known to AMLC and are in fact in official record of the Senate Impeachment Court, and that, under Section 4 of RA 9160, the mere act of depositing to banks such huge funds is in itself suggestive of transaction classifiable as money laundering offense because it appears way beyond CJ Corona's known legal income, especially in the light of his annual income tax "returns" testified to by BIR Commissioner Kim Henares---as mandated by RA 9160, what will BSP do to CJ Corona and his suspicious multi-million peso deposits?
3. To quote Dean Andy Bautista: "…40 years since the enactment of R.A. 6426, the wisdom of its policy prescription appears to raise some legitimate questions. Note that the law was enacted to 'encourage deposits from foreign investors and lenders.'”
Today, we have what we did not have when RA 6426 was enacted: $77-BILLION dollar reserves with BSP (Lee C. Chipongan, "January GIR reaches $77 Billion," Manila Bulletin, February 7, 2012), more than $1-BILLION monthly OFW remittances, dollar deposits under RA 6426 which we do not fully need because these are not DIRECT FOREIGN INVESTMENTS invested in industries. These are mere "demandable" deposits that can go into the tantrum of CAPITAL FLIGHT at the slightest sign of economic aberration, as what happened during the 1997-1998 Asian crisis. As such dollar deposits that are not long-term investments, these are not owned by our economy and merely artificially increase our dollar supply and consequently OVERVALUE or over-appreciate our local currency, at the expense of OFWs and exporters. In fact, BSP has repeatedly liberalized the rules on dollar outflow to temper rising dollar supply in the economy and help stem the unwarranted appreciation of the PESO.
Further, even Switzerland has abandoned absolute secrecy of bank deposits when our PCGG successfully got back Marcos deposits in Swiss banks, as well as when the US government forced Union Bank of Switzerland (UBS) to open its secret bank accounts, reveal American tax-evader depositors, and pay a fine of $780 million to the US government (Lynnley Browning, “A Swiss Bank Is Set to Open Its Secret Files,” The New York Times online, February 18, 2009).
In short, maintaining absolute confidentiality of dollar deposits under RA 6426 is both outdated and improper because such secrecy is needed by crooks in and out of government but not by honest and legitimate depositor-investors.
NEEDED ACTION FROM THE SENATE IMPEACHMENT COURT
In the meantime that RA 6426 is not amended to take into account present needs and realities, pursuant to Section 11 of RA 9160, the Senate Impeachment Court should order AMLC to look into and report to the Court CJ Corona’s dollar and peso deposits for probable and apparent violations of both RA 9160 and the SALN law (Section 8 of RA 6713.) Failure to do so will be unfair to the prosecution, the defense, and the people who expect fair and just decision in the impeachment case based on the whole TRUTH.
NEEDED ACTION FROM THE ANTI-MONEY LAUNDERING COUNCIL
In the case of AMLC, with or without order from any competent court, it should take the initiative of promptly doing its job by looking into CJ Corona's peso and dollar bank deposits which, taken together with his undeclared and under-declared condo units in his SALNs, clearly suggest undeclared, undisclosed, untaxed, and unexplained wealth subject to punitive action under our existing anti-money laundering, tax, anti-graft, and SALN laws.
MARCELO L. TECSON
A Concerned Citizen
San Miguel, Bulacan
2-11-12, 2-12-12
==========================
ANNEX A
REPUBLIC ACT NO. 9160
AN ACT DEFINING THE CRIME OF MONEY LAUNDERING, PROVIDING PENALTIES THEREFOR AND FOR OTHER PURPOSES.
Section 1. Short Title. – This Act shall be known as the "Anti-Money Laundering Act of 2001."
Sec. 2. Declaration of Policy. – It is hereby declared the policy of the State to protect and preserve the integrity and confidentiality of bank accounts and to ensure that thePhilippines shall not be used as a money laundering site for the proceeds of any unlawful activity. Consistent with its foreign policy, the State shall extend cooperation in transnational investigations and prosecutions of persons involved in money laundering activities wherever committed.
Sec. 3. Definitions. – For purposes of this Act, the following terms are hereby defined as follows:
(a) "Covered institution" refers to:
(1) banks, non-banks, quasi-banks, trust entities, and all other institutions and their subsidiaries and affiliates supervised or regulated by the Bangko Sentral ng Pilipinas (BSP);
(b) "Covered transaction" is a single, series, or combination of transactions involving a total amount in excess of Four Million Philippine pesos (PhP4,000,000.00) or an equivalent amount in foreign currency based on the prevailing exchange rate within five (5) consecutive banking days except those between a covered institution and a person who, at the time of the transaction was a properly identified client and the amount is commensurate with the business or financial capacity of the client; or those with an underlying legal or trade obligation, purpose, origin or economic justification.
(COMMENT: Based on the above provision of RA 9160, deposits beyond the financial capacity of the depositor are NOT included in the EXCEPTIONS to covered transactions, therefore these deposits are COVERED by transactions considered MONEY LAUNDERING activity. This means that CJ Corona's more than P31 MILLION deposits with BPI and PSBank, unless properly explained, will fall under the category of illegal money laundering transaction. --M. L. Tecson)
It likewise refers to a single, series or combination or pattern of unusually large and complex transactions in excess of Four Million Philippine pesos (PhP4,000,000.00) especially cash deposits and investments having no credible purpose or origin, underlying trade obligation or contract. (Comment: The P4-million threshold amount has been reduced to P500,000, as shown in ANNEX B. --M. L. Tecson)
(d) "Offender" refers to any person who commits a money laundering offense.
(f) "Proceeds" refers to an amount derived or realized from an unlawful activity.
(g) "Supervising Authority" refers to the appropriate supervisory or regulatory agency, department or office supervising or regulating the covered institutions enumerated in Section 3(a).
(h) "Transaction" refers to 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 institution.
(i) "Unlawful activity" refers to any act or omission or series or combination thereof involving or having relation to the following:
(1) Kidnapping for ransom under Article 267 of Act No. 3815, otherwise known as the Revised Penal Code, as amended;
(2) Sections 3, 4, 5, 7, 8 and 9 of Article Two of Republic Act No. 6425, as amended, otherwise known as the Dangerous Drugs Act of 1972;
(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 of the Revised Penal Code, as amended;
(10) Smuggling under Republic Act Nos. 455 and 1937;
(11) Violations under Republic Act No. 8792, otherwise known as the Electronic Commerce Act of 2000;
(12) Hijacking and other violations under Republic Act No. 6235; destructive arson and murder, as defined under the Revised Penal Code, as amended, including those perpetrated by terrorists against non-combatant persons and similar targets;
(13) Fraudulent practices and other violations under Republic Act No. 8799, otherwise known as theSecurities Regulation Code of 2000;
(14) Felonies or offenses of a similar nature that are punishable under the penal laws of other countries.
Sec. 4. Money Laundering Offense. – Money laundering is a crime whereby the proceeds of an unlawful activity are transacted, thereby making them appear to have originated from legitimate sources. It is committed by the following:
(a) Any person knowing that any monetary instrument or property represents, involves, or relates to, the proceeds of any unlawful activity, transacts or attempts to transact said monetary instrument or property.
(b) Any person knowing that any monetary instrument or property involves the proceeds of any unlawful activity, performs or fails to perform any act as a result of which he facilitates the offense of money laundering referred to in paragraph (a) above.
(c) Any person knowing that any monetary instrument or property is required under this Act to be disclosed and filed with the Anti-Money Laundering Council (AMLC), fails to do so.
Sec. 7. Creation of Anti-Money Laundering Council (AMLC). – The Anti-Money Laundering Council is hereby created and shall be composed of the Governor of the Bangko Sentral ng Pilipinas as chairman, the Commissioner of the Insurance Commission and the Chairman of the Securities and Exchange Commission as members. The AMLC shall act unanimously in the discharge of its functions as defined hereunder:
(5) to initiate investigations of covered transactions, money laundering activities and other violations of this Act;
Sec. 9. Prevention of Money Laundering; Customer Identification
Requirements and Record Keeping. –
(a) Customer Identification. - Covered institutions shall establish and record the true identity of its clients based on official documents. They shall maintain a system of verifying the true identity of their clients and, in case of corporate clients, require a system of verifying their legal existence and organizational structure, as well as the authority and identification of all persons purporting to act on their behalf.
The provisions of existing laws to the contrary notwithstanding, anonymous accounts, accounts under fictitious names, and all other similar accounts shall be absolutely prohibited. Peso and foreign currency non-checking numbered accounts shall be allowed. The BSP may conduct annual testing solely limited to the determination of the existence and true identity of the owners of such accounts.
(c) Reporting of Covered Transactions. - Covered institutions shall report to the AMLC all covered transactions within five (5) working days from occurrence thereof, unless the Supervising Authority concerned prescribes a longer period not exceeding ten (10) working days.
When reporting covered transactions to the AMLC, covered institutions and their officers, employees, representatives, agents, advisors, consultants or associates shall not be deemed to have violated Republic Act No. 1405, as amended; Republic Act No. 6426, as amended; Republic Act No. 8791 and other similar laws, but are prohibited from communicating, directly or indirectly, in any manner or by any means, to any person the fact that a covered transaction report was made, the contents thereof, or any other information in relation thereto. In case of violation thereof, the concerned officer, employee, representative, agent, advisor, consultant or associate of the covered institution, shall be criminally liable....
Sec. 10. Authority to Freeze. – Upon determination that probable cause exists that any deposit or similar account is in any way related to an unlawful activity, the AMLC may issue a freeze order, which shall be effective immediately, on the account for a period not exceeding fifteen (15) days. Notice to the depositor that his account has been frozen shall be issued simultaneously with the issuance of the freeze order. The depositor shall have seventy-two (72) hours upon receipt of the notice to explain why the freeze order should be lifted. The AMLC has seventy-two (72) hours to dispose of the depositor’s explanation. If it fails to act within seventy-two (72) hours from receipt of the depositor’s explanation, the freeze order shall automatically be dissolved. The fifteen (15)-day freeze order of the AMLC may be extended upon order of the court, provided that the fifteen (15)-day period shall be tolled pending the court’s decision to extend the period.
No court shall issue a temporary restraining order or writ of injunction against any freeze order issued by the AMLC except the Court of Appeals or the Supreme Court.
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 with any banking institution or non-bank financial institution upon order of any competent court in cases of violation of this Act when it has been established that there is probable cause that the deposits or investments involved are in any way related to a money laundering offense: Provided, That this provision shall not apply to deposits and investments made prior to the effectivity of this Act.
Sec. 14. Penal Provisions. – (a) Penalties for the Crime of Money Laundering. - The penalty of imprisonment ranging from seven (7) to fourteen (14) years and a fine of not less than Three Million Philippine pesos (PhP3,000,000.00) but not more than twice the value of the monetary instrument or property involved in the offense, shall be imposed upon a person convicted under Section 4(a) of this Act.
The penalty of imprisonment from four (4) to seven (7) years and a fine of not less than One million five hundred thousand Philippine pesos (PhP1,500,000.00) but not more than Three million Philippine pesos (PhP3,000,000.00), shall be imposed upon a person convicted under Section 4(b) of this Act.
The penalty of imprisonment from six (6) months to four (4) years or a fine of not less than One hundred thousand Philippine pesos (PhP100,000.00) but not more than Five hundred thousand Philippine pesos (PhP500,000.00), or both, shall be imposed on a person convicted under Section 4(c) of this Act.
Sec. 22. Repealing Clause. – All laws, decrees, executive orders, rules and regulations or parts thereof, including the relevant provisions of Republic Act No. 1405, as amended; Republic Act No. 6426, as amended; Republic Act No. 8791, as amended and other similar laws, as are inconsistent with this Act, are hereby repealed, amended or modified accordingly.
Sec. 23. Effectivity. – This Act shall take effect fifteen (15) days after its complete publication in the Official Gazette or in at least two (2) national newspapers of general circulation.
The provisions of this Act shall not apply to deposits and investments made prior to its effectivity.
Approved:
(Sgd.) FRANKLIN M. DRILON (Sgd.) JOSE DE VENECIA JR.
President of the Senate Speaker of the House of Representatives
This Act which is a consolidation of House Bill No. 3083 and Senate Bill No. 1745 was finally passed by the House of Representatives and the Senate on September 29, 2001.
(Sgd.) OSCAR G. YABES (Sgd.) ROBERTO P. NAZARENO
Secretary of the Senate Secretary-General
House of Representatives
Approved:
(Sgd.) GLORIA MACAPAGAL-ARROYO
President of the Philippines
===============================
ANNEX B
ON JUETENG and ANTI-MONEY LAUNDERING COUNCIL
By Rural Bankers Association of the Philippines (RBAP)
From RBAP Website
September 28, 2010
Unfairly dragged to the issue (of jueteng) were rural banks, which were alleged to have allowed the transfer of huge amount of money with the least document requirements which is far from the truth since banking laws and the tough deposit rules under the Bangko Sentral ng Pilipinas (BSP) and Anti-Money Laundering Council (AMLC) do not exempt rural banks.
The Anti-Money Laundering Council (AMLC) is an all-powerful body being composed of the BSP Governor as chairman and the Commissioner of the IC and the SEC Chairman as members.
Under the Anti-Money Laundering Act (AMLA) of 2001 that created AMLC, banks are required to report suspicious transactions from which the agency base its orders to any of the BSP, Securities and Exchange Commission (SEC) or the Insurance Commission (IC) to check on the transaction involving suspected dirty money.
The AMLC is then authorized to institute forfeiture proceedings through the Office of the Solicitor General on the suspect accounts and the filing of anti-money laundering charges through the Department of Justice (DoJ) on the owner of the spurious bank deposit.
The law also allows the AMLC to examine or inquire into bank deposits or investments upon a court order including those suspected as proceeds from the illegal number games jueteng and masiao which were specifically identified as sources of dirty money under the AMLA.
The BSP was also vested the authority to inquire into or examine any deposit or investment with any banking institution or non-bank financial institution in the course of a periodic or special examination to determine their sources.
Under the amended rules of the AMLA issued on March 7, 2003, the threshold for transactions that can be covered by AMLC scrutiny was lowered from P4 million to P500,000. This means deposits of at least P500,000 are now covered by the law allowing government bank account inspection.
The amendments also allowed the BSP to inquire or examine any deposit or investment with any banking institution without court order in the course of a periodic or special examination while removing the provision prohibiting the retroactivity of the law, thus any bank account of individuals suspected of laundering money before the AMLA took effect is also covered by possible AMLC or BSP examination.
* * *
The Philippines has long been in the watch list of the international anti-dirty money group Financial Action Task Force (FATF), which is under the Organization for Economic Cooperation and Development (OECD) that comprises the world’s richest nations, and the lowering of the limit on the amount deposited in an account covered by the bank secrecy law was among the conditions for the removal of the country from its dirty money list.
With the approval of the AMLA amendments, FATF sanctions which include debilitating trade penalties were not imposed on the country.
* * *
The Rural Bank Association of the Philippines (RBAP)... has not been remiss in educating its members throughout the country of the various rules and regulations against money laundering and ways to prevent them from being used as conduits for dirty money.
====================
ANNEX C
EXCERPTS from:
Denying a dénouement
MY FOUR CENTAVOS
By Dean Andy Bautista
The Philippine Star, February 11, 2012
http://www.philstar.com/Article.aspx?articleId=776269
The secrecy of bank deposits occupied the minds of most people this week. If the hoot and howl were the measure, one could conclude that these “concerns” concerned the entire banking industry. The fussing over these accounts, however, is more an offshoot of people being secretive than it is about the laws on secrecy.
In the recent case of GSIS v. Court of Appeals, promulgated on June 8, 2011, the Supreme Court compared R.A. 1405 (enacted in 1955) and R.A. 6426 (enacted in 1974), as follows:
R.A. No. 1405 provides for four (4) exceptions (note however that five are provided in the decisions) when records of deposits may be disclosed. These are under any of the following instances: a) upon written permission of the depositor, (b) in cases of impeachment, (c) upon order of a competent court in the case of bribery or dereliction of duty of public officials or, (d) when the money deposited or invested is the subject matter of the litigation, and e) in cases of violation of the Anti-Money Laundering Act (AMLA), the Anti-Money Laundering Council (AMLC) may inquire into a bank account upon order of any competent court. On the other hand, the lone exception to the non-disclosure of foreign currency deposits, under R.A. No. 6426, is disclosure upon the written permission of the depositor.
These two laws both support the confidentiality of bank deposits. There is no conflict between them. R.A. No. 1405 was enacted for the purpose of giving encouragement to the people to deposit their money in banking institutions and to discourage private hoarding so that the same may be properly utilized by banks in authorized loans to assist in the economic development of the country. It covers all bank deposits in the Philippines and no distinction was made between domestic and foreign deposits. Thus, R.A. No. 1405 is considered a law of general application. On the other hand, R.A. No. 6426 was intended to encourage deposits from foreign lenders and investors. It is a special law designed especially for foreign currency deposits in the Philippines . A general law does not nullify a specific or special law. xxx
* * * *
Ostensibly, the logic of this Decision is sound. Yet 40 years since the enactment of R.A. 6426, the wisdom of its policy prescription appears to raise some legitimate questions. Note that the law was enacted to “encourage deposits from foreign investors and lenders.” Hence, if the depositor is local, should he enjoy the same protection?
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