Professional Documents
Culture Documents
Banks and Banking; Bank Secrecy Law (R.A. No. 1405); Foreign Currency Deposit Act of the
Philippines (R.A. No. 6426); Where the accounts in question are U.S. dollar deposits, the applicable
law is R.A. No. 6426, not R.A. No. 1405; Under R.A. 6426 there is only a single exception to the secrecy
of foreign currency deposits, that is, disclosure is allowed only upon the written permission of the
depositor.—This case should have been studied more carefully by all concerned. The finest legal
minds in the country—from the parties’ respective counsel, the Provincial Prosecutor, the
Department of Justice, the Solicitor General, and the Court of Appeals—all appear to have
overlooked a single fact which dictates the outcome of the entire controversy. A circumspect review
of the record shows us the reason. The accounts in question are U.S. dollar deposits; consequently,
the applicable law is not Republic Act No. 1405, but Republic Act (R.A.) No. 6426, known as the
“Foreign Currency Deposit Act of the Philippines,” section 8 of which provides: Sec. 8. Secrecy of
Foreign Currency Deposits.—All foreign currency deposits authorized under this Act, as amended by
Presidential Decree No. 1035, as well as foreign currency deposits authorized under Presidential
Decree No. 1034, are hereby declared as and considered of an absolutely confidential nature
and, except upon the written permission of the depositor, in no instance shall such foreign currency
deposits be examined, inquired or looked into by any person, government official bureau or office
whether judicial or administrative or legislative or any other entity whether public or private:
Provided, however, that said foreign currency deposits shall be exempt from attachment,
garnishment, or any other order or process of any court, legislative body, government agency or any
administrative body whatsoever. (italics supplied) Thus, under R.A. No. 6426 there is only
a single exception to the secrecy of foreign currency deposits, that is, disclosure is allowed only upon
the written permission of the depositor. Incidentally, the acts of private respondents complained of
happened before the enactment on September 29, 2001 of R.A. No. 9160 otherwise known as the
Anti-Money Laundering Act of 2001.
Same; Same; Same; Acts Mala in Se and Mala Prohibita; While it is true that, as a rule and on
principles of abstract justice, men are not and should not be held criminally responsible for acts
committed by them without guilty knowledge and criminal or at least evil intent, the courts have
always recognized the power of the legislature, on grounds of public policy and compelled by necessity,
“the great master of things,” to forbid in a limited class of cases the doing of certain acts, and to make
their commission criminal without regard to the intent of the doer.—A case for violation of Republic
Act No. 6426 should have been the proper case brought against private respondents. Private
respondents Lim and Reyes admitted that they had disclosed details of petitioners’ dollar
deposits without the letter’s written permission. It does not matter if that such disclosure was
necessary to establish Citibank’s case against Dante L. Santos and Marilou Genuino. Lim’s act of
disclosing details of petitioners’ bank records regarding their foreign currency deposits, with the
authority of Reyes, would appear to belong to that species of criminal acts punishable by special
laws, called malum prohibitum. In this regard, it has been held that: While it is true that, as a rule
and on principles of abstract justice, men are not and should not be held criminally responsible for
acts committed by them without guilty knowledge and criminal or at least evil intent x x x, the courts
have always recognized the power of the legislature, on grounds of public policy and compelled by
necessity, “the great master of things,” to forbid in a limited class of cases the doing of certain acts,
and to make their commission criminal without regard to the intent of the doer. x x x In such cases
no judicial authority has the power to require, in the enforcement of the law, such knowledge or
motive to be shown. As was said in the case of State vs. McBrayer x x x:
Same; Same; Same; Prescription; Criminal Procedure; A violation of R.A. No. 6426 prescribes
in eight years; Filing of the complaint or information for alleged violation of R.A. No. 1405 does not
have the effect of tolling the prescriptive period for violation of R.A. No. 6426.—A violation of Republic
Act No. 6426 shall subject the offender to imprisonment of not less than one year nor more than five
years, or by a fine of not less than five thousand pesos nor more than twenty-five thousand pesos, or
both. Applying Act No. 3326, the offense prescribes in eight years. Per available records, private
respondents may no longer be haled before the courts for violation of Republic Act No. 6426. Private
respondent Vic Lim made the disclosure in September of 1993 in his affidavit submitted before the
Provincial Fiscal. In her complaint-affidavit, Intengan stated that she learned of the revelation of
the details of her foreign currency bank account on October 14, 1993. On the other hand, Neri asserts
that she discovered the disclosure on October 24, 1993. As to Brawner, the material date is January
5, 1994. Based on any of these dates, prescription has set in. The filing of the complaint or
information in the case at bar for alleged violation of Republic Act No. 1405 did not have the effect
of tolling the prescriptive period. For it is the filing of the complaint or information corresponding to
the correct offense which produces that effect.
Same; Same; Same; Same; Judicial Notice; The existence of laws is a matter of mandatory
judicial notice; The confidentiality of foreign currency deposits mandated by Republic Act No. 6426,
as amended by Presidential Decree No. 1246, came into effect as far back as 1977, hence, ignorance
thereof cannot be pretended.—It may well be argued that the foregoing disquisition would leave
petitioners with no remedy in law. We point out, however, that the confidentiality of foreign currency
deposits mandated by Republic Act No. 6426, as amended by Presidential Decree No. 1246, came
into effect as far back as 1977. Hence, ignorance thereof cannot be pretended. On one hand, the
existence of laws is a matter of mandatory judicial notice; on the other, ignorantia legis non excusat.
Even during the pendency of this appeal, nothing prevented the petitioners from filing a complaint
charging the correct offense against private respondents. This was not done, as everyone involved
was content to submit the case on the basis of an alleged violation of Republic Act No. 1405 (Bank
Secrecy Law), however, incorrectly invoked.
DECISION
5.1 In the course of the investigation, I was able to determine that the
bank clients which Mr. Santos and Ms. Genuino helped/caused to divert
their deposits/money placements with Citibank, NA. to Torrance and
Global (their family corporations) for subsequent investment in securities,
shares of stocks and debt papers in other companies were as follows:
xxx
b) Carmen Intengan
xxx
d) Rosario Neri
xxx
i) Rita Brawner
All the above persons/parties have long standing accounts with Citibank,
N.A. in savings/dollar deposits and/or in trust accounts and/or money
placements.
First step: Santos and/or Genuino would tell the bank client that they
knew of financial products of other companies that were yielding higher
rates of interests in which the bank client can place his money. Acting on
this information, the bank client would then authorize the transfer of his
funds from his Citibank account to the Citibank account of either
Torrance or Global.
The transfer of the Citibank clients deposits was done through the
accomplishment of either an Application For Managers Checks or a Term
Investment Application in favor of Global or Torrance that was
prepared/filed by Genuino herself.
Second step: Once the said fund transfers had been effected, Global
and/or Torrance would then issue its/ their checks drawn against its/their
Citibank accounts in favor of the other companies whose financial
products, such as securities, shares of stocks and other certificates, were
offering higher yields.
The amounts covered by the checks represent the shares of Santos and
Genuino in the margins Global and/or Torrance had realized out of the
placements [using the diverted monies of the Citibank clients] made with
the other companies.
Fifth step: At the same time, Global and/or Torrance would also issue
its/their check(s) drawn against its/their Citibank accounts in favor of the
bank client.
The check(s) cover the principal amount (or parts thereof) which the
Citibank client had previously transferred, with the help of Santos and/or
Genuino, from his Citibank account to the Citibank account(s) of Global
and/or Torrance for placement in the other companies, plus the interests
or earnings his placements in other companies had made less the
spreads made by Global, Torrance, Santos and Genuino.
The complaints which were docketed as I.S. Nos. 93-9969, 93-10058 and
94-1215 were subsequently amended to include a charge of estafa under
Article 315, paragraph 1(b)11 of the Revised Penal Code.
Although petitioners were not the parties involved in IS. No. 93-8469,
their accounts were relevant to the complete prosecution of the case
against Santos and Genuino and the respondent DOJ properly ruled that
the disclosure of the same falls under the last exception of R.A. No. 1405.
That ruling is consistent with the principle laid down in the case of Mellon
Bank, N.A. vs. Magsino (190 SCRA 633) where the Supreme Court
allowed the testimonies on the bank deposits of someone not a party to
the case as it found that said bank deposits were material or relevant to
the allegations in the complaint. Significantly, therefore, as long as the
bank deposits are material to the case, although not necessarily the
direct subject matter thereof, a disclosure of the same is proper and falls
within the scope of the exceptions provided for by R.A. No. 1405.
xxx xxx xxx
Moreover, the language of the law itself is clear and cannot be subject to
different interpretations. A reading of the provision itself would readily
reveal that the exception or in cases where the money deposited or
invested is the subject matter of the litigation is not qualified by the
phrase upon order of competent Court which refers only to cases of
bribery or dereliction of duty of public officials.
The instant petition was actually denied by the former Third Division of
this Court in a Resolution18 dated July 16, 1997, on the ground that
petitioners had failed to show that a reversible error had been
committed. On motion, however, the petition was reinstated19 and
eventually given due course.20 cräl äw virt u alib räry
I.
II.
(1)
PETITIONERS DEPOSITS ARE NOT INVOLVED IN ANY LITIGATION
BETWEEN PETITIONERS AND RESPONDENTS. THERE IS NO
LITIGATION BETWEEN THE PARTIES, MUCH LESS ONE INVOLVING
PETITIONERS DEPOSITS AS THE SUBJECT MATTER THEREOF.
(2)
III.
Apart from the reversal of the decision and resolution of the appellate
court as well as the resolutions of the Department of Justice, petitioners
pray that the latter agency be directed to issue a resolution ordering the
Provincial Prosecutor of Rizal to file the corresponding informations for
violation of Republic Act No. 1405 against private respondents.
Actually, this case should have been studied more carefully by all
concerned. The finest legal minds in the country - from the parties
respective counsel, the Provincial Prosecutor, the Department of Justice,
the Solicitor General, and the Court of Appeals - all appear to have
overlooked a single fact which dictates the outcome of the entire
controversy. A circumspect review of the record shows us the reason.
The accounts in question are U.S. dollar deposits; consequently, the
applicable law is not Republic Act No. 1405 but Republic Act (RA) No.
6426, known as the Foreign Currency Deposit Act of the Philippines,
section 8 of which provides:
Sec. 8. Secrecy of Foreign Currency Deposits.- All foreign currency
deposits authorized under this Act, as amended by Presidential Decree
No. 1035, as well as foreign currency deposits authorized under
Presidential Decree No. 1034, are hereby declared as and considered of
an absolutely confidential nature and, except upon the written permission
of the depositor, in no instance shall such foreign currency deposits be
examined, inquired or looked into by any person, government official
bureau or office whether judicial or administrative or legislative or any
other entity whether public or private: Provided, however, that said
foreign currency deposits shall be exempt from attachment, garnishment,
or any other order or process of any court, legislative body, government
agency or any administrative body whatsoever.[21 (italics supplied)
Thus, under R.A. No. 6426 there is only a single exception to the secrecy
of foreign currency deposits, that is, disclosure is allowed only upon the
written permission of the depositor. Incidentally, the acts of private
respondents complained of happened before the enactment
on September 29, 2001 of R.A. No. 9160 otherwise known as the Anti-
Money Laundering Act of 2001.
A case for violation of Republic Act No. 6426 should have been the proper
case brought against private respondents. Private respondents Lim and
Reyes admitted that they had disclosed details of petitioners dollar
deposits without the latters written permission. It does not matter if that
such disclosure was necessary to establish Citibanks case against Dante
L. Santos and Marilou Genuino. Lims act of disclosing details of
petitioners bank records regarding their foreign currency deposits, with
the authority of Reyes, would appear to belong to that species of criminal
acts punishable by special laws, called malum prohibitum. In this regard,
it has been held that:
Ordinarily, the dismissal of the instant petition would have been without
prejudice to the filing of the proper charges against private respondents.
The matter would have ended here were it not for the intervention of
time, specifically the lapse thereof. So as not to unduly prolong the
settlement of the case, we are constrained to rule on a material issue
even though it was not raised by the parties. We refer to the issue of
prescription.
Republic Act No. 6426 being a special law, the provisions of Act No.
3326,23 as amended by Act No. 3763, are applicable:
SEC. 2. Prescription shall begin to run from the day of the commission of
the violation of the law, and if the same be not known at the time, from
the discovery thereof and the institution of judicial proceedings for its
investigation and punishment.
The filing of the complaint or information in the case at bar for alleged
violation of Republic Act No. 1405 did not have the effect of tolling the
prescriptive period. For it is the filing of the complaint or information
corresponding to the correct offense which produces that effect.31 crälä wvirt u alib räry
SO ORDERED.