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DOJ OPINION NO. 004, s.

2009
January 19, 2009

Executive Director Carmelo L. Arcilla


Civil Aeronautics Board
Department of Transportation and Communications
Old MIA Road, Pasay City

Sir :
This has reference to your request for clarification and guidance on the queries raised by the Philippine Airlines
(PAL) with your Office regarding the scope and application of Presidential Decree (P.D.) No. 1718, 1 in relation
to the grand jury subpoenas issued by the United States Department of Justice (USDOJ) requiring PAL to submit
data on its cargo and passenger operations. cda
Specifically, you seek opinion on the following issues:
1. Whether the data, documents and other information of PAL located in the Philippines are covered by the
provisions of P.D. No. 1718 such that they are not covered by the grand jury subpoenas; and
2. Whether the Civil Aeronautics Board (CAB) is the designated representative of the President as
contemplated in Section 2 of P.D. No. 1718, to which notification of the subpoenas shall be made and which will
determine whether compliance with the subpoenas shall be made. AEcTaS
The second issue was raised again in a subsequent request in view of the subpoena issued by the Korean Free
Trade Commission (KFTC) requiring PAL to submit documents "in connection with its ongoing applications of
possible violation of anti-trust laws in relation to cargo operations to and from Korea".
In both cases, you state that compliance with the subpoenas would entail "taking or causing to be taken, sent or
causing to be sent, or removing or causing to be removed from the territorial jurisdiction of the Philippines, or
delivering in any manner or form to any foreign person or government or its agents or representative, any
documents or information as herein defined relating in any manner to any business carried on in the Philippines"
within the meaning of Sec. 2 of P.D. No. 1718.
It appears that sometime in June 2007, the USDOJ served on PAL's offices in San Francisco and Hawaii two (2)
federal grand jury subpoenas requiring the submission of a wide variety of documents for the period 1999 until
June 2007 in connection with its investigation of possible violations of US anti-trust laws in relation to cargo and
passenger operations to and from the US. A broad interpretation of the subpoenas, according to PAL, would
include not only data and information located in the US but also those located in the Philippines and the activities
of PAL and its officers done or carried out in the Philippines as long as they involve the Philippine-US route.
AaEcHC
PAL also believes that CAB is the "designated representative of the President" with respect to the aviation
industry since under Republic Act No. 776, 2 it is granted the power to exercise "general supervision and
regulation of and the jurisdiction and control over air carriers . . ., as well as their property, property rights,
equipment, facilities and franchise, . . . ." Hence, the request.
P.D. No. 1718 declares as a state policy the restriction of the transfer outside the Philippines of the documents and
information of Philippine corporations, entities or individuals doing business in the pursuit of the national
economic development programs of the government. 3 It specifies the "document or information" covered by the
law, thus:
Section 3. For the purposes of this Decree, the term "document or information" shall include, but not be
limited to, the originals (and all copies which are non-identical whether by means of notation or otherwise) of all
written, printed, typed, recorded, graphic, or photographic matter, or any other type of memorial, formal or
informal, located in the Philippines (including sound recordings and information stored in computers) whether or
not in the possession, custody, or control of the person against whom the foreign requirement, order, direction, or
subpoena is directed, including, but not limited to: telexes, records, books of account, reports, minutes,
memoranda, telegrams, diaries, appointment books, log books, desk calendars, notes, inter-office or intra-office
communications, bulletins, charts, circulars, maps, expense accounts, working papers, surveys, bid materials,
stenographer's notebooks, sales reports, price lists, and all other writings and papers similar to the foregoing,
however denominated, including any record or device by means of which material is recorded or stored, and
resume, digest or extract of any such material. (emphasis ours)
Sec. 2 of P. D. No. 1718 also reads:
Section 2. . . . no person shall take or cause to be taken, send or cause to be sent, or remove or cause to be
removed from the territorial jurisdiction of the Philippines, or deliver in any manner or form to any foreign person
or government or its agent or representative, any document or information as herein defined relating in any
manner to any business carried on in the Philippines . . . ."
In Opinion No. 139, s. 1981, this Department, explaining its affirmative answer to the issue on "whether or not a
shipping conference may continue to engage in its self-policing activities in the Philippines without violating the
provisions of Presidential Decree No. 1718" stated therein:
xxx xxx xxx
Finally, the evil sought to be avoided by the injunction in Section 2 of PD 1718 is to prevent local documents and
records from being utilized by any foreign government to the prejudice and/or detriment of [domestic]
corporations, entities or individuals, including their officers and employees, done above stated that the of local
documents. *
xxx xxx xxx.

It must be mentioned, however, that the Mutual Legal Assistance Treaty (MLAT) in Criminal Matters with the
US is in full force and effect. It obligates the contracting parties to provide mutual assistance, in accordance with
the provisions of the treaty, in connection with the prevention, investigation 4 and prosecution of criminal
offenses, and in proceedings relating to criminal matters. It states that assistance shall include, among others,
"taking the testimony or statements of persons" 5 and "providing documents, records and items of evidence". 6
On the assumption that the proceedings involved in the instant request fall under the RP-US MLAT, the
procurement of documents, records and items of evidence should be done through the said treaty, subject to the
conditions and limitations provided in Article 3 thereof, which requires due consideration or application of the
pertinent provisions of our Constitution and existing laws, such as P.D. No. 1718. IDATCE

The second issue was raised in view of the following provisions of P.D. No. 1718:
xxx xxx xxx
Section 2. . . . no person shall take or cause to be taken, send or cause to be sent, or remove or caused to be
removed from the territorial jurisdiction of the Philippines, or deliver in any manner or form to any foreign person
or government or its agent or representative, any document or information as herein defined relating in any
manner to any business carried on in the Philippines, unless such taking, sending or removal is consistent with and
forms part of a regular practice of furnishing to a head office or parent company or organization outside of the
Philippines, or is in connection with a proposed business transaction requiring the furnishing of the document or
information, or is required or necessary for negotiations or conclusion of business transactions, or is in
compliance with an international agreement to which the Philippines is a party, or is made pursuant to the
authority granted by the designated representative(s) of the President as herein described. DcaSIH
xxx xxx xxx
Section 5. Any person who is served or issued any requirement, order, directive or subpoena of any
legislative, administrative or judicial authority in any jurisdiction outside of the Philippines involving said
documents or information shall inform the designated representative(s) of the President of the Philippines of such
service/requirement who shall then determine whether or not compliance shall be made. . . . . (Emphasis ours)

Sec. 10 of R.A. No. 776 states:


SEC. 10. Powers and duties of the Board. — (A) Except as otherwise provided herein, the Board shall have
the power to regulate the economic aspect of air transportation, and exercise general supervision and regulation of,
and jurisdiction and control over, air carriers as well as their property, property rights, equipment, facilities, and
franchise . . . ."
While R.A. No. 776 vests upon the CAB the primary responsibility of promoting and protecting the interests of
the civil aviation industry of the Philippines, it may still need the "designation" from the President, as required
under P.D. No. 1718, before it can assume the role of the agency to which notification of "any requirement, order,
directive or subpoena of any legislative, administrative or judicial authority in any jurisdiction outside of the
Philippines involving said documents or information" shall be made and make a determination whether such
requirement, order, directive or subpoena shall be complied with. This is especially true since the CAB is an
attached agency of the Department of Transportation and Communications (DOTC) and the President may
consider designating said Department as her representative for the implementation of P.D. No. 1718 insofar as
matters falling within the jurisdiction of the DOTC are concerned, including those relating to its attached agencies.
In this regard, we are quoting below pertinent parts of this Department's Opinion No. 156, s. 1982, which the
"designated representative of the President" may consider as a guide in determining whether to comply with the
subpoenas mentioned above, to wit:
. . . there are two (2) questions of fact which must be resolved by the "designated representative(s) of the President
of the Philippines" in determining whether compliance shall be made with "any requirement, order, directive or
subpoena of any legislative, administrative or judicial authority in any jurisdiction outside of the Philippines", to
wit:

1. That the corporations, entities or individuals having possession of the pertinent documents and
information are "doing business in the pursuit of the national economic development programs of the Government
and/or engaged in the development, promotion, protection and export of Philippine products to increase foreign
currency revenues"; and
2. That the utilization of such documents and information "by any foreign person or government" would not
be "to the prejudice and/or detriment of said corporations, entities or individuals, including their officers and
employees". DACTSa
Please be guided accordingly.
Very truly yours,
(SGD.) RAUL M. GONZALEZ
Secretary
Footnotes
1. Providing for Incentives in the Pursuit of Economic Development Programs by Restricting the Use of
Documents and Information Vital to the National Interest in Certain Proceedings and Processes.
2. An Act to Reorganize the Civil Aeronautics Board and the Civil Aeronautics Administration, to Provide
for the Regulation of Civil Aeronautics in the Philippines and Authorizing the Appropriation of Funds Therefor
(or "The Civil Aeronautics Act of the Philippines").
3. Sec. 1, P.D. No. 1718.

4. The term "investigation" includes grand jury proceedings in the United States.
5. Article 1 (Scope of Assistance), RP-US Mutual Legal Assistance Treaty in Criminal Matters.
6. Ibid., Art. 1 (2) (b).

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DOJ OPINION NO. 045, s. 2004


May 5, 2004

Commissioner Ronald Olivar Solis

National Telecommunications Commission


BIR Road, East Triangle
Diliman, Quezon City

Sir :
This refers to your request for advice on whether the records custodians of the Philippine telecommunications
entities (PTEs) should comply with the subpoenas duces tecum issued by the United States (U.S.) District Court
of Hawaii, requiring such records custodians to appear and bring with them documents and records, in connection
with the Grand Jury proceedings in Honolulu, Hawaii, initiated by the U.S. Department of Justice for alleged
violations of the U.S. Anti-Trust Laws. CcaASE
You state that in January 2004, the U.S. District Court of Hawaii issued subpoenas ad testificandum to Filipino
telecommunications executives who were attending an international conference in Hawaii, U.S.A. Most of those
who were personally served subpoenas have already appeared before the Grand Jury. The investigation continues
with the issuance of subpoenas duces tecum to the records custodians of the PTEs. The PTEs, however, invoke
Section 24, 1 Article II (Declaration of Principles and State Policies) of the present Philippine Constitution,
Section 4 2 of the Public Telecommunications Policy Act of the Philippines (Republic Act No. 7925) and Sections
1 3 and 5 4 of Presidential Decree (PD) No. 1718 5 (1980) and maintain that compliance with the subpoenas
duces tecum may constitute an act prejudicial to the pursuit of the Philippines' economic development programs.
Hence, the request for advice on the issue.
Please note that the RP-US Mutual Legal Assistance Treaty (MLAT) in Criminal Matters is in full force and
effect. It obligates the Contracting Parties to provide mutual assistance, in accordance with the previsions of the
treaty, in connection with the prevention, investigation 6 and prosecution of criminal offenses, and in proceedings
related to criminal matters. It states that assistance shall include, inter alia, "providing documents, records, and
items of evidence." 7

It has been said that "the principal incentive for many foreign governments to negotiate MLATs with the United
States was, and remains, the desire to curtail the resort by U.S. prosecutors, police agents, and courts to unilateral,
extraterritorial means of collecting evidence from abroad." 8 This incentive would be rendered useless if we allow
procurement of evidence through a subpoena duces tecum. iatdc2004
In fine, the procurement of documents, records and items of evidence should be done through the existing MLAT,
subject to the conditions and limitations spelled out in Article 3 9 thereof, which require due consideration or
application of the pertinent provisions of our Constitution and existing laws, such as PD No. 1718. HIEAcC
Very truly yours,
(SGD.) MA. MERCEDITAS N. GUTIERREZ
Acting Secretary
Footnotes
1. Sec. 24. The State recognizes the vital role of communication and information in nation-building.
2. SEC. 4. Declaration of National Policy. — Telecommunications is essential to the economic development,
integrity and security of the Philippines, and as such shall be developed and administered as to safeguard, enrich
and strengthen the economic, cultural, social and political fabric of the Philippines. . . .

3. SECTION 1. It is hereby declared a policy of the State that any and all documents and information
possessed by or in the custody of Philippine corporations, entities or individuals doing business in the pursuit of
the national economic development programs of the Government and/or engaged in the development, promotion,
protection and export of Philippine products to increase foreign currency revenues, are vital to the national
interest and should not be utilized by any foreign person or government to the prejudice and/or detriment of said
corporations, entities or individuals, including their officers and employees.

4. SEC. 5. Any person who is served or issued any requirement, order, directive or subpoena of any
legislative, administrative or judicial authority in any jurisdiction outside of the Philippines involving said
documents or information shall inform the designated representative(s) of the Philippines of such
service/requirement who shall then determine whether or not compliance shall be made. . . .
5. PROVIDING FOR INCENTIVES IN THE PURSUIT OF ECONOMIC DEVELOPMENT PROGRAMS
BY RESTRICTING THE USE OF DOCUMENTS AND INFORMATION VITAL TO THE NATIONAL
INTEREST IN CERTAIN PROCEEDINGS AND PROCESSES.
6. The term "investigation" includes a grand jury proceeding in the United States.
7. Article 1 (Scope of Assistance) (2) (b)
8. E. Nadelmann, "Cops Across Borders: The Internationalization of U.S. Criminal Law Enforcement" 315
(1993).
9. ARTICLE 3
LIMITATIONS ON ASSISTANCE
1. The Central Authority of the Requested State may deny assistance if:
xxx xxx xxx

(c) the execution of the request would prejudice its security or similar essential interests: or
xxx xxx xxx
2. Before denying assistance pursuant to this Article, the Central Authority of the Requested
State shall consult with the Central Authority of the Requesting State to consider whether assistance can be given
subject to such conditions as it deems necessary. If the Requesting State accepts assistance subject to these
conditions, it shall comply with the conditions.

xxx xxx xxx


DOJ OPINION NO. 178, s. 1980
December 11, 1980

Presidential Assistant

Joaquin T. Venus, Jr.


Malacañang, Manila
Sir :

This refers to Presidential Decree No. 1718 entitled "Providing For Incentives In The Pursuit Of Economic
Development Programs By Restricting The Use Of Documents And Information Vital To The National Interests
In Certain Proceedings and Processes", the original draft of which had previously been the subject, upon your
request, of our comments in our letter to you dated August 15, 1980.
We are pleased to note that our views on the abovesaid draft have been reflected in P.D. 1718. We note, further,
that the changes suggested were made without sacrificing the objectives of the law, which is "to provide
protection to all persons and entities carrying out the economic development programs against the enforcement of
certain requirements, orders and judgments of foreign authorities which operate to impose upon this nation their
own economic policies, concepts and ideas; perpetuate the economic advantages of the industrial countries over
the developing nations; favor foreign competitors; and embarrass disrupt, or damage business carried on in the
country." (3rd "Whereas" clause) LexLib
We observe that the injunction prescribed in Section 4 of the law against the enforcement of certain foreign
judgments in the Philippines and the directive in Section 5 regarding compliance with any foreign requirement,
sufficiently afford the protection contemplated by the decree. Thus, it can be said that the decree amply protects
the vital economic interests of the Republic without compromising in the process its international standing and
reputation in the world business community.
We are glad we have been of help in the preparation of this significant piece of legislation.
Very truly yours,
(SGD.) RICARDO C. PUNO
Minister of Justice

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