RP V EUGENIO

Facts:

The petition arose from the aftermath of the ruling in Agan v PIATCO nullifying the
concession agreement awarded to PIATCO over the NAIA 3 Project. The said project
was alleged to have corruption. Series of investigations were undertaken. The OSG
wrote AMLC for assistance in order to obtain more evidences to reveal the financial
trail of corruption surrounding the project. Base on the intelligence database search of
the financial transaction certain individuals were involved; Pantaleon Alvarez
(Chairman, PBAC Tech. Comm. Of the project). The search revealed that Alvarez
maintained 8 bank accounts with 6 different banks.

On 27 June 2005, the AMLC issued Resolution No. 75, Series of 2005, whereby the Council
resolved to authorize the Executive Director of the AMLC "to sign and verify an
application to inquire into and/or examine the [deposits] or investments of Pantaleon
Alvarez, Wilfredo Trinidad, Alfredo Liongson, and Cheng Yong, and their related web
of accounts wherever these may be found, as defined under Rule 10.4 of the Revised Implementing
Rules and Regulations;" and to authorize the AMLC Secretariat "to conduct an inquiry into
subject accounts once the Regional Trial Court grants the application to inquire into
and/or examine the bank accounts" of those four individuals. The resolution enumerated the
particular bank accounts of Alvarez, Wilfredo Trinidad (Trinidad), Alfredo Liongson (Liongson) and Cheng Yong
which were to be the subject of the inquiry. The rationale for the said resolution was founded on
the cited findings of the CIS that amounts were transferred from a Hong Kong bank
account owned by Jetstream Pacific Ltd. Account to bank accounts in the Philippines
maintained by Liongson and Cheng Yong. The Resolution also noted that "[b]y
awarding the contract to PIATCO despite its lack of financial capacity, Pantaleon
Alvarez caused undue injury to the government by giving PIATCO unwarranted
benefits, advantage, or preference in the discharge of his official administrative
functions through manifest partiality, evident bad faith, or gross inexcusable
negligence, in violation of Section 3(e) of Republic Act No. 3019."

Issue:

Held:

A brief overview of the AMLA is called for.

Money laundering has been generally defined by the International Criminal Police Organization (Interpol) `as "any
act or attempted act to conceal or disguise the identity of illegally obtained proceeds so that they appear to have
originated from legitimate sources."64 Even before the passage of the AMLA, the problem was addressed by the
Philippine government through the issuance of various circulars by the Bangko Sentral ng Pilipinas. Yet ultimately,
legislative proscription was necessary, especially with the inclusion of the Philippines in the Financial Action Task
Force’s list of non-cooperative countries and territories in the fight against money laundering. 65 The original AMLA,
Republic Act (R.A.) No. 9160, was passed in 2001. It was amended by R.A. No. 9194 in 2003.

Section 4 of the AMLA states that "[m]oney laundering is a crime whereby the proceeds of an unlawful activity as
[defined in the law] are transacted, thereby making them appear to have originated from legitimate sources." 66 The
section further provides the three modes through which the crime of money laundering is committed. Section 7
creates the AMLC and defines its powers, which generally relate to the enforcement of the AMLA provisions and
the initiation of legal actions authorized in the AMLA such as civil forefeiture proceedings and complaints for the
prosecution of money laundering offenses.67
In addition to providing for the definition and penalties for the crime of money laundering, the AMLA also authorizes
certain provisional remedies that would aid the AMLC in the enforcement of the AMLA. These are the "freeze order"
authorized under Section 10, and the "bank inquiry order" authorized under Section 11.

Because of the Bank Secrecy Act, the confidentiality of bank deposits remains a basic state policy
in the Philippines.87 Subsequent laws, including the AMLA, may have added exceptions to the Bank
Secrecy Act, yet the secrecy of bank deposits still lies as the general rule. It falls within the zones
of privacy recognized by our laws.88
Any exception to the rule of absolute confidentiality must be specifically legislated. Section 2 of the
Bank Secrecy Act itself prescribes exceptions whereby these bank accounts may be examined by
"any person, government official, bureau or office"; namely when: (1) upon written permission of
the depositor; (2) in cases of impeachment; (3) the examination of bank accounts is upon order of
a competent court in cases of bribery or dereliction of duty of public officials; and (4) the money
deposited or invested is the subject matter of the litigation. Section 8 of R.A. Act No. 3019, the
Anti-Graft and Corrupt Practices Act, has been recognized by this Court as constituting an
additional exception to the rule of absolute confidentiality,92 and there have been other similar
recognitions as well

The AMLA also provides exceptions to the Bank Secrecy Act. Under Section 11, the AMLC may
inquire into a bank account upon order of any competent court in cases of violation of the AMLA,
it having been established that there is probable cause that the deposits or investments are related
to unlawful activities as defined in Section 3(i) of the law, or a money laundering offense under
Section 4 thereof.