Tuesday, February 19, 2008 SC upholds ruling v. AMLC bank inquiry order
THE Supreme Court (SC) has denied the bid of the Anti-Money Laundering Council (AMLC) to open the web of bank accounts of former government officials and private individuals who allegedly conspired to approve the anomalous Terminal 3 of the Ninoy Aquino International Airport (Naia) project.
In a decision penned by Associate Justice Dante Tinga, the SC Second Division sustained the ruling of the Court of Appeals which issued a status quo order stating the July 1, 2005 ruling of the Makati Regional Trial Court (RTC) granting AMLC the authority to inquire and examine the bank accounts of former transportation secretary Pantaleon Alvarez and Lilia Cheng, wife of Cheng Yong, president of the Philippine International Air Terminals Co. (Piatco), a contractor that built Naia Terminal 3.
Also being investigated were the bank accounts of former DOTC undersecretary Wilfredo Trinidad and Piatco consultant Alfredo Liongson.
The suit was later on consolidated by the SC with another case filed by AMLC seeking the implementation of the Manila RTC's January 12, 2006 order finding merit in the ex-parte applications of AMLC to inspect about 13 accounts and two related web accounts in accordance with Republic Act (RA) 9160 or the Anti-Money Laundering Act.
The SC also ruled that the Manila RTC did not abuse its discretion in issuing a subsequent order deferring the implementation of its January 2006 order to inquire into these accounts alleged as having been used to facilitate corruption in the Naia Terminal 3 project.
Among said accounts were the DBS bank account of Alvarez and the Metrobank accounts of Cheng and his wife.
The high court held that RA 9160 does not allow courts to issue ex-parte bank inquiry order without hearing or notification of the other parties.
Citing Section 11 of AMLA, the SC said the law does not specifically authorize the issuance ex-parte of the bank inquiry order as compared to Section 10 (Freezing of Monetary Instrument or Property).
Although both are extraordinary provisional relief which the AMLC may avail of to combat money laundering activities, according to the court noted that Section 10 uses specific language to authorize an ex-parte application, which is 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," the court said.
The SC said although bank inquiry order may be availed of without the need of a pre-existing case, it does not follow that such order may be availed of without hearing or notification of the other parties.
It further noted that prior to its amendments, it was the AMLC, not the CA, which had authority to issue a freeze order, whereas a bank inquiry order always then required, without exception, an order from a competent court.
It was through the said amendments that ex-parte proceedings were introduced into the AMLA, including in the case of the freeze order.
"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," the court held.
Court records showed that the AMLC filed before the Makati RTC an ex-parte application to inquire into the accounts of the four accused based on the findings of its Compliance and Investigation Staff (CIS) that amounts were transferred from a Hong Kong bank account owned by Jetstream Pacific Lt. account to bank accounts in the Philippines maintained by Liongson and Yong.
In her petition filed before the CA, Lilia Cheng sought to enjoin the Manila and Makati RTCs from allowing the AMLC to implement their bank inquiry orders.
Lilia jointly owns a conjugal bank account with Citibank that is covered by the Makati RTC inquiry order, and two conjugal bank accounts with Metrobank that are covered by the Manila RTC bank inquiry order.
Lilia claimed that the lower courts committed grave abuse of discretion in granting AMLC's ex-parte applications for a bank inquiry order, arguing that the ex-parte applications violated her constitutional right to due process.
She further stressed that the bank inquiry order under the AMLA can only be granted where there is already a pre-existing money launder offense case filed before the courts and that AMLA does not apply to bank accounts opened and transactions entered into prior to its effectivity or to bank accounts located outside the country. (ECV/Sunnex)
