Rosa Cancio v.

CA and Commissioner of Customs
22 October 1987, Melencio-Herrera, J.

SV: Cancio was apprehended with USD 102,900 in cash and USD 600 in traveller’s checks
while leaving the country for HK. She was not able to present the CB Authority required,
neither did she declare the amounts at customs. The cash and checks were forfeited.

SC ruled that Cancio was a foreign currency depositor and that the CB Circulars requiring a
CB Authority to carry foreign currency out of the country did not apply to her. The law
applicable to her is the Foreign Currency Deposits Act, the purpose of which is to attract
and invite the deposit of foreign currencies which are acceptable as part of the
international reserve in duly authorized banks in order that they may be put into
the stream of the banking system. Undue restrictions to the transferability of foreign
currency deposits should not be made.

FACTS:
- Rosa Cancio, while clearing through the Pre-Boarding Area of MIA (with her husband and
three children) to board a plane for Hongkong was apprehended with USD 102,900.00 in
cash, USD 600 in two traveler’s checks and PhP 1,500. She was not able to present a Central
Bank Authority allowing her to carry the currency out of the country.
a) The apprehension was effected only through an alarm sounded by a scanner.
b) Mrs. Cancio did not declare her currency and had already passed the Customs
Inspection area.
c) The currencies were placed and concealed inside two carton boxes for local
chocolates, wrapped and taped with tin foil back paper.

- The currencies were confiscated and seizure proceedings were initiated against her.

- At the hearing of the case, Cancio presented certified a certified photocopy of her Bank
Book for foreign currency deposit with the Philippine Commercial and Industrial Bank, dollar
remittances in telegraphic transfers from abroad for deposits in her account, and withdrawal
cards.
a) She was a foreign currency depositor pursuant to RA No. 6426 as implemented by CB
Circular No. 343
b) She claimed that she intended to fly to Hongkong and then proceed to the US for
medical treatment of her heart ailment. The US currency they were carrying was
intended principally for such medical purpose.
c) They were concealed and hidden solely for security reasons.

- The Commissioner of Customs decreed forfeiture of both the foreign and local currencies
due to the failure of Cancio to present a Central Bank Authority to bring said currencies out
of the country.

- Upon appeal, the CTA upheld the forfeiture of the USD 102,900 in cash and USD 600 worth
of traveler’s checks. However, CTA reversed the forfeiture of the Php 1,500 on the ground
that each traveller is allowed to bring P500 out of the country without a CB permit (par. 4 of
CB Circular No. 383) and Mrs. Cancio was then travelling with four other people.

- Appeal was made to the SC which was initially denied. An MR was subsequently filed (this
case).

ISSUE: Should the USD 102,900 cash and USD 600 in traveler’s checks be forfeited? NO.

REASONING:

As per the Circular-Letter. notwithstanding any change in policy or regulations. — There shall be no restriction on the withdrawal by the depositor of his deposit or on the transferability of the same abroad except those arising from the contract between the depositor and the bank. Cancio did not present a certificate of withdrawal at MIA when she was about to depart. if requested. 3. b. However. Sec. any restriction " from the contract between the depositor and the bank. Subject only to the terms of the contract between the bank and the depositor. The SC disagreed and quoted CB Circular Letter dated 3 August 1978. 11 (b) of the IRR of RA 6426 (CB Circular No. The travellers shall present the certifications to the Customs and Central Bank personnel at the MIA.. Unless specifically authorized by the Central Bank or allowed under existing international agreements or Central Bank regulations." A Central Bank Authority is not required for the transferability abroad of foreign currency deposits. the latter shall have a general license to withdraw his deposit. no person shall take or transmit or attempt to take or transmit foreign exchange. it is the depositary bank which should advise its depositors to carry with them the certificate of withdrawal. The provisions of this Section shall not apply to tourists and non-resident temporary visitors who are taking or sending out of the Philippines their own foreign exchange brought in by them. 2) However. through the mails. CB Circular No. 5. Withdrawability and transferability of deposits. Cancio is a foreign currency depositor. . the banks authorized to accept foreign currency deposits. Withdrawability and Liquidity of Deposits. 534. CB Circular No. the transferability abroad of foreign currency deposits is unrestricted. this was because she was unaware of the requirement. par. 265. or through international carriers. which recognized the right of transferability abroad: Effective immediately. through other persons. 3. Under the foregoing provision. 3) Respondents assert Sec. Only one exception is provided for therein.. SEC. are hereby instructed to advise their foreign currency depositors who are withdrawing funds for travel purposes to carry with them the certificate of withdrawal that the banks shall issue.1) The exporting of foreign currency from the country is not allowed except if authorized by the Central Bank. in any form out of the Philippines only. as amended). arguing that the provision withholds from the depositor the right of transferability abroad: SEC. No person shall take out or export from the Philippines foreign currency or any other foreign exchange except as otherwise authorized by the Central Bank. 11. What is applicable to her are the provisions of the Foreign Currency Deposit Act of the Philippines (RA 6426. which is. 353).

. Such is substantial compliance. 265 and 534 (see “1)” above) should not be made to apply to foreign currency depositors whose rights are defined and guaranteed in a special law. Cancio has presented in evidence her foreign currency bank book and withdrawal cards. the necessary certificate of withdrawal from the bank. RA 6426.900 in case and USD 600 in traveller’s checks. This is not to condone petitioner’s failure to declare the foreign currency she was carrying out of the country but just to stress the right of transferability of her funds abroad except that she was not advised by her bank to secure. CTA DECISION SET ASIDE INSOFAR AS IT UPHELD FORFEITURE OF USD 102. AMOUNTS SHOULD BE RETURNED TO PETITIONER’S HEIRS. It would defeat the very purpose of the law to place undue restrictions on the transferability of such funds. CB Circulars Nos. 4) The underlying objective of the Foreign Currency Deposit Act is to attract and invite the deposit of foreign currencies which are acceptable as part of the international reserve in duly authorized banks in order that they may be put into the stream of the banking system.Besides. and consequently was unable to present.