Case Summary (G.R. No. 232724-27)
Petitioner
Anti-Money Laundering Council
Respondents
Sandiganbayan (Seventh Division) and Office of the Ombudsman, through the Office of the Special Prosecutor
Key Dates
• Transactions dated February–March 2004 (Lionair deposits)
• Subpoena Duces Tecum and Ad Testificandum issued October 10, 2016
• Sandiganbayan Resolution denying Motion to Quash: March 28, 2017
• Sandiganbayan Order denying Motion for Reconsideration: May 12, 2017
• Petition for Certiorari decided: February 15, 2021
Applicable Law
• 1987 Philippine Constitution (due process)
• Anti-Money Laundering Act (Republic Act No. 9160, as amended by RA 9194; confidentiality rule in Section 9(c); AMLC functions in Section 7; reporting definitions in Section 3)
• Revised Implementing Rules and Regulations of RA 9160 (Rule 22(B): AMLC confidentiality)
• Foreign Currency Deposit Act (RA 6426, Section 8: secrecy of foreign currency deposits; exception by depositor’s written consent)
• Rules of Court, Rule 15 (motion hearing, notice, proof of service) and Rule 21 (subpoena duces tecum: relevancy and definiteness)
Procedural Background
The Office of the Special Prosecutor, in the criminal case People v. Versoza, subpoenaed AMLC to produce Lionair’s Union Bank records and to testify regarding large dollar deposits. AMLC moved to quash on grounds of statutory confidentiality. The Sandiganbayan denied the Motion to Quash and, on Motion for Reconsideration, ruled the confidentiality concerns were outweighed by evidentiary importance. AMLC filed a Petition for Certiorari alleging grave abuse of discretion.
Issues Presented
- Must AMLC serve respondents with its Motion for Reconsideration under Rule 15?
- Does Section 9(c) of RA 9160 bar AMLC from disclosing covered and suspicious transaction reports?
- Is Lionair’s written waiver under RA 6426 sufficient to permit disclosure of its account records?
- Does the subpoena’s description of documents satisfy the relevance and definiteness requirements of Rule 21?
Notice of Hearing Requirement
Under Rule 15, Sections 4–6, every motion for hearing must be accompanied by notice addressed to all parties at least three days before the hearing, and proof of service is mandatory. Failure to serve notice renders the motion pro forma and violates due process. AMLC’s claim of nominal-party status fails: it is an indispensable party with a real interest and filed the challenged motions. Its non-compliance with Rule 15 deprived respondents of the opportunity to oppose, constituting a defect in the proceedings.
Confidentiality Under the Anti-Money Laundering Act
Section 9(c) imposes a non-disclosure obligation on covered institutions (banks, non-banks, securities houses, etc.) to prevent “tipping off.” AMLC is not a covered institution under Section 3(a); it is the financial intelligence unit expressly tasked under Section 7 to receive reports, investigate suspicious transactions, and institute prosecutions. Applying Section 9(c) to AMLC would frustrate its mandate and impede criminal enforcement. International standards against tipping-off likewise target reporting entities, not the intelligence unit.
Waiver Under the Foreign Currency Deposit Act
RA 6426, Section 8, declares foreign currency deposits absolutely confidential except by written depositor consent. Lionair executed a Board Resolution waiving its secrecy rights and authorizing access to its account No. 13133-000119-3 at Union Bank. Precedent (China Banking Corp. v. CA) holds that an owner-depositor’s written permission overcomes deposit secrecy without further court order. Section 11 of RA 9160 (requiring a court order upon probable cause) is an exception to RA 6426 when no waiver exists; it is inapplicable once the deposit
...continue readingCase Syllabus (G.R. No. 232724-27)
Case Background
- Petition for certiorari under Rule 65 of the Rules of Court assails Sandiganbayan’s Resolution (March 28, 2017) and Order (May 12, 2017)
- Anti-Money Laundering Council (AMLC) moved to quash a Subpoena Duces Tecum and Ad Testificandum issued by the Sandiganbayan
- Underlying criminal prosecution: People v. P/Dir. General Jesus Versoza, charging former First Gentleman Jose Miguel Arroyo with plunder for anomalous purchase of two secondhand helicopters
Facts of the Transaction
- Seller Lionair, Inc. represented helicopters as brand new though they were used
- Lionair’s president, Archibald L. Po, testified Arroyo was the real owner and made partial payments into Lionair’s Union Bank account
- Savings passbook reflected three USD deposits on February 27 and March 1, 2004, totaling over USD 1,000,000
- Union Bank manager testified the account was closed in 2006; records disposed; suggested AMLC or Bangko Sentral ng Pilipinas may have covered‐transaction reports
Procedural History
- Sandiganbayan issued subpoena directing AMLC Executive Director Julia C. Bacay‐Abad to testify and produce Lionair’s bank records
- AMLC filed Motion to Quash, asserting confidentiality under RA 9160 (Anti‐Money Laundering Act) and its Implementing Rules
- Sandiganbayan denied the Motion to Quash (March 28, 2017) and denied AMLC’s Motion for Reconsideration (May 12, 2017)
- AMLC filed a Rule 65 petition to this Court, seeking to invalidate the subpoena and secure injunctive relief
Issues Presented
- Whether AMLC, as petitioner, was required to serve copies of its Motion for Reconsideration on respondents
- Whether Section 9(c) of RA 9160 prohibits AMLC from disclosing covered and suspicious transaction reports
- Whether Lionair’s written permission under the Foreign Currency Deposit Act suffices to lift bank secrecy
- Whether the subpoena reasonably and specifically described the documents sought
Rule on Motion Hearing (Rule 15, Rules of Court)
- Every written motion must be set for hearing and served with notice at least three days before hearing (Sec. 4)
- Notice of hearing must be addressed to all parties, specifying date and time, not later than ten days after filing (Sec. 5)
- No motion set for hearing shall be acted upon without proof of service of the notice (Sec. 6)
Application to Motion for Reconsideration (Due Process)
- Jurisprudence treats a motion lacking notice of hearing as a “mere scrap of paper” (Valderrama v. People; De la Peña v. De la Peñ