Monday, March 17, 2008 SC told to overturn ruling v. bank inquiry
GOVERNMENT lawyers on Sunday asked the Supreme Court (SC) to reverse a recent decision requiring notice and hearing prior to the issuance of an order that allow bank inquiries, saying such prerequisite might not sit well with other countries.
In a motion for reconsideration, Solicitor General Agnes Devanadera wants the high court to set aside its February 14, 2008 ruling that dismissed the petition filed by the Anti-Money Laundering Council (AMLC), seeking the immediate implementation of the orders issued by the regional trials courts (RTCs) in Manila and Makati, which thereby allow the examination of the bank accounts of former government officials and private individuals allegedly involved in graft-ridden Ninoy Aquino International Airport (Naia) Terminal 3 project.
Devanadera said the SC decision could undermine the AMLC's mandate to go after perpetrators of money laundering operations in the country.
She further said if the decision would be followed, the country would face serious repercussions in its financial transactions with other countries as it runs counter the standards set by the Financial Action Task Force (FATF), which include the ability to identify and trace the properties subject of the money laundering inquiry with expediency.
The Office of the Solicitor General (OSG) noted that aside from setting up the necessary legislation, effective implementation of the law carries equal weight in determining compliance with the FATF standards.
Devanadera informed the court that the FATF, which was established by the Group of Seven nations (G7) and has currently more than 30 member-jurisdictions, could individually impose drastic counter-measures on the Philippines if it fails to comply with its standards.
"Worse, such global perception may revert the Philippines to the dreaded FATF list of non-cooperative countries and territories (NCCT), a situation that needlessly causes prejudice to the country's financial transactions, including those involving the much valued foreign remittances of overseas Filipino workers (OFWs) from abroad," the OSG said.
Devanadera said in 2000, the Philippines' inclusion in the FATF list of NCCTs led the United States Department of the Treasury/Financial Crimes Enforcement Network (FinCEN) to issue Advisory 24 imposing an enhanced scrutiny on Philippine related transactions, which greatly affected the correspondent banking relationships of Philippine banks with its counterparts in the US as it hampered trade and commerce.
Among the counter-measures that may be imposed on the country include limitation on migration, according to the OSG.
Devandera added that the court's decision requiring notice and hearing prior to the issuance of bank inquiry order is tantamount to alerting the holder of the account suspected of being used in money laundering activities.
"With the rapid technological advances in banking, money can be electronically transferred in a matter of seconds not only from one bank to another within a country but also between jurisdictions. Consequently and inevitably, there is nothing more to freeze and forfeit because the money is gone -- and possibly gone forever -- and the remedies of freeze and forfeiture will become useless and meaningless," she said.
Aside from this, the OSG insisted that the requirement of "notice and hearing" in an application for an order of inquiry will practically deny the AMLC the right to exercise its authority to inquire into or examine bank deposits or investments that are related to an unlawful activity.
In rendering its ruling, the SC said Republic Act (RA) 9160 or the Anti-Money Laundering Act does not allow courts to issue ex-parte bank inquiry order or without hearing or notification of the other parties.
The high court ruled that the Manila RTC did not commit grave abuse of discretion in issuing the orders dated July 25, 2006 and August 15, 2006 which deferred the implementation of its January 12, 2006 order granting the ex-parte application of AMLC to inquire into 13 accounts and two related web accounts allegedly used to facilitate corruption in the Naia 3 project.
Among the said accounts were DBS bank account of former transportation secretary Pantaleon Alvarez and the Metrobank account of Cheng Yong, president of the Naia 3 contractor Philippine International Air Terminal Corp. (Piatco).
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. to bank account in the Philippines maintained by Liongson and Yong.
Lilia Cheng, wife of Yong, sought to enjoin the Manila and Makati RTCs from allowing the AMLC to implement their bank inquiry orders. She 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. (ECV/Sunnex)
