In defense of the guardians of the well-A A +A
Thursday, January 10, 2013
THE Anti-Money Laundering Council, very early this year, was very much surprised to see itself subjected to, in my view, unwarranted criticism. A well-known opinion writer (not of this paper) painted the AMLC as having turned by PNoy into "his deadly weapon against his enemies."
The basis of such condemnation apparently was a petition filed by the AMLC with the Court of Appeals to freeze the bank accounts of some officers of the Development Bank of the Philippines who were implicated in the so-called "behest" loan to one who was a former minister during the tenure of the late President Ferdinand Marcos.
The petition was filed, the opinion writer bewailed, "even as no criminal charges were filed in court against them"; the implication is that there is a legal requirement for a prior criminal case and this prerequisite was blatantly disregarded by the AMLC.
The filing was also categorized by the opinion writer as having the effect of unjustly putting respectable people in the same light as the Aman Futures scam suspects as well as the dreaded terrorists of Al Qaida and the Taliban; unjust, because obviously, the DBP respondents are undoubtedly not cut from the same cloth.
Among those affected by the freeze order was a neighbor of mine who, as a result, was allegedly wronged additionally by the inaction, supposed by the opinion writer of the Court of Appeals on his motion to "unfreeze" some P140,000 from his bank accounts that he needed for his cancer treatment.
I rise in defense of the Court of Appeals and the AMLC.
It is not correct to say that the Court of Appeals has not, as of the time the opinion writer came out with his accusation, acted on my neighbor's request for the release of some money from his bank accounts. In a Resolution dated December 21, 2012, the Court of Appeals specifically tackled the request of my neighbor for some funds from those accounts.
The Court of Appeals, in response, ruled: "A perusal of the Development Bank of the Philippines' Compliance and Manifestation...reveals that [my neighbor] have (sic) other bank accounts with DBP containing substantial deposits/funds which have been frozen already in compliance with Our December 6, 2012 Resolution (Freeze Order)."
It thus decided: "Upon the facts disclosed by the record and for humanitarian reasons, the motion of [my neighbor] to lift the freeze order against his Bank of Philippine Islands Account...and Hong Kong & Shanghai Banking Corporation Account ... is GRANTED. The FREEZE ORDER over said bank accounts are LIFTED until final adjudication of the instant case."
The Court of Appeals clearly had not sat on the motion of my neighbor to unfreeze accounts for his basic necessities. From the filing of the motion to lift to the resolution of the Court of Appeals, less than a month transpired.
More important, the Court of Appeals really bent backwards in accepting my neighbor's plea grounded on "humanitarian" reasons. "Humanitarian reasons" is not, strictly speaking, a ground for lifting a freeze under the R.A. No. 9160, as amended (AMLA). "Humanitarian exemptions," instead, is found in Section 13 of R.A. No. 10168 which is known as "The Terrorism Financing Prevention and Suppression Act of 2012." It clearly refers to "funds frozen under the first paragraph of Section 11..." Section 11 is about AMLC's authority to freeze funds that are "related to financing of terrorism or acts of terrorism" or belong to persons who "are committing or attempting or conspiring to commit, or participating in or facilitating the commission of financing of terrorism or acts of terrorism..."
Unfreezing for "humanitarian reasons" is thus a special concession to those who may have committed acts of terrorism under some misguided patriotic objective. Not outright pursuit of criminal action. "Humanitarian reasons" is not applicable to money launderers who, under R.A. No. 9160, are seen no more than as criminals hiding the proceeds of their crime.
Notwithstanding the absence of a similar provision in the Anti-Money Laundering Law (R.A. No. 9160, as amended), however the Court of Appeals used "humanitarian reasons" as basis, along with "facts disclosed by the record," to grant my neighbor's request for unfreezing two of his many accounts.
Far from being heartless, the Court of Appeals thus stretched the law by invoking in a case falling under R.A. No. 9160 a lee way granted only to violators of R.A. No. 10168.
Another point of correction I would like to make is the hidden implication that a criminal case must first be filed before a freeze order can be issued by the Court of Appeals. The fact is that under R.A. No. 9160, as amended, what justifies the initiation of the process of freezing bank accounts is not the filing of a criminal case, but existence of probable cause.
This was the clear pronouncement in the case of M/Gen. Carlos Garcia v. Court of Appeals, G.R. No. 165800, promulgated on November 27, 2007. The Supreme Court therein stated that "there are only two requisites under the law for the issuance of a freeze order: (1) the application ex parte by the AMLC; and (2) the determination of probable cause by the Court of Appeals."
In order words, the Court of Appeals is given the task of determining whether there is probable cause to believe that certain funds or properties are related to an unlawful activity or a money laundering offense. Once it is so convinced, the Court of Appeals needs to freeze. The actual filing of the criminal case, either for any of the so-called predicate offenses or for violations of the anti-money laundering law, is not a requirement for the issuance of a freeze order.
The reason is obvious. It is essential to the purity of the money flowing in the economy that its guardians be able to act quickly and expeditiously in spotting probable contamination and preventing its likely spread. The filing of the petition is ex parte became the offenders cannot be forewarned of the cleaner's approach; otherwise, all the contaminators will need to do is move out their offending material as soon they sense the cleaners coming. What is crucial to keeping the money in the economy clean, like keeping the water in our faucets pure, is to have filters in place in all the critical areas before the contaminants could join the water flow. The Court of Appeals, in our anti-money laundering regime, performs the function of such advance filters.
Philippine courts' reputation, has indeed, unfortunately fallen into some hard times recently. But the courts nevertheless continue to stand as our final bulwark against anarchy and our last defense against the rule of might. Correct them, as we must, when they stray. But carelessly besmirch the judiciary's honor through misinformation or sloppy homework, we ought not.
(For comments, e-mail me at firstname.lastname@example.org)