ASSIGNMENT NO.

2-BANKING LAWS
COMMERCIAL LAW REVIEW
Atty. Myra-Diwata A. Rivera-Caroy

INSTRUCTIONS:

1. This assignment consists of FIVE (5) questions calling of the pertinent

provisions of the Anti Money Laundering Act.
2. Answer the questions briefly yet completely; limit your answers to a
maximum of three sentences per item. Cite the legal basis for your answers,
and a mere “YES” or “NO” answer shall not be given any credit. Limit your
explanation to just one sentence each. Place your answers right after the
question/item.
3. Submit your assignment on or before 08 February 2021 at 5:00 p.m. Late
assignment outputs shall not be considered.

I.
(10%)

Gener maintains the following accounts with MASAGANA Banking Corporation, thus: (1)
Savings Deposit Account No. 1-026-400-786; and (2) Checking Account No. 1-023-876-600-
945. It appears that both accounts are being used by Gener in financing terrorist activities in
Jolo, Sulu amounting to around Php 300Million. The Anti-Money Laundering Council
subsequently issued an Order directed to MASAGANA Banking Corporation directing the latter
to provide details on both bank accounts in the name of Gener. Gener objected on the
grounds that the order from the AMLC is a violation of the Secrecy of Bank Deposits Act. Is
Gener correct? Explain.

NO. It is not a violation of the Secrecy of Bank Deposits Act because under
Sec 3(i) of AMLC, financing of terrorism is an unlawful activity and thus AMLC may
inquire into or examine any particular deposit or investment, including related
accounts, with any banking institution or non-bank financial institution. A court
order is not required in this case pursuant to Sec 11 of Anti Money Laundering Act.

II.
(10%)

Ursula is the incumbent mayor of the Municipality of Kakawatian in the province of Isabela
who was charged with technical malversation and a Violation of the Anti-Graft and Corrupt
Practices Act with the OMbudsman for transferring Php 85Million from the municipality’s
Development Fund to fund the construction of a plaza fountain. It turned out that the
fountain was only worth Php 5Million. It turns out that the Php 80Million was deposited in
Ursula’s saving deposit account with XYZ Banking Corporation under Savings Account No.
1234-7658-78. The Office of the Ombudsman then issued a subpoena directing XYZ to
produce the pertinent records and documents pertaining to Savings Account No. 1234-7658-
78. Ursula objected invoking the Secrecy of Bank Deposits Act. Is Ursula correct? Explain.

No, Ursula is wrong because under sec. 3 (i) of the Anti-Money Laundering
Act, one of the Unlawful Activity which will warrant an inquiry into or examination
of any particular deposit or investment with any banking institution is
malversation of public funds. Thus, it will not be a violation of the Secrecy of Bank
Deposits Act.
There must be a prior court order.
 III.
(10%)

Chong Kwai La is a wealthy businessman who made his fortune establishing shopping malls
around the country, with a net worth of Php 6Billion. Chong Kwai La was kidnapped by a
syndicate known as “Bayad Bayad Gang” whose modus operandi is to entice the victim who
will be befriended by a beautiful lady, after which the gand will then proceed to kidnap the
victim. Chong Kwai La was subsequently released by the gang after paying a ransom of Php
700Million; however, three of the members were apprehended by police authorities in a
special covert police operation conducted to facilitate the safe release of Chong Kwai La.

Upon further interrogation of the gang members apprehended for the kidnapping of Chong
Kwai La, the police received information that the ransom money amounting to Php 700Million
was deposited in seven separate bank accounts with ABC Bank, each bank account
corresponding to that of the members of “ Bayad Bayad Gang.” Upon seeking assistance with
the Anti-Money Laundering Council (AMLC), the latter issued an Order directed to the
President of ABC Bank or his deputy for the submission of pertinent documents and records
pertaining to the seven bank accounts in question. The President of ABC Bank objected on
the following grounds: (1) The order of the AMLC is a violation of the Bank Secrecy Act; and
(2) a prior court order is necessary to inquire into the seven bank deposits. Is ABC Bank
correct? Explain.

No, the order of AMLC is not a violation of the Bank Secrecy Act because
sec. 3(i) of Anti-Money Laundering Act provides that for unlawful activity such as
Kidnapping for ransom, the AMLC may inquire into or examine any particular
deposit or investment with any banking institution.
Also, a prior court order is not required for inquiry as provided under
section 11 of the Anti-Money Laundering Act for cases under section 3(i),(2), and
(12).

IV.
(10%)

Joselito and five others were charged with the Regional Trial Court for a Violation of RA 9165,
as amended, which consisted in the manufacture of wholesale of high grade shabu. In the
course of the preliminary investigation before the prosecutor, it was found that the
operations of Joselito and his cohorts were funded by a China based syndicate through three
bank accounts maintained with ABC Bank in the aggregate amount of Php 200Million. The
AMLC, after a request for assistance from the prosecutor’s office and the court, issued an
Order against ABC Bank to produce pertinent documents and records pertaining to the three
bank accounts in question. The President of ABC Bank objected on the following grounds: (1)
The order of the AMLC is a violation of the Bank Secrecy Act; and (2) a prior court order is
necessary to inquire into the seven bank deposits. Is ABC Bank correct? Explain.

No, the order of AMLC is not a violation of the Bank Secrecy Act because
sec. 3(i) of Anti-Money Laundering Act provides that for unlawful activity such as
section 8 of RA 9165 or the Manufacture of Dangerous Drugs and/or Controlled
Precursors and essential Chemicals the AMLC may inquire into or examine any
particular deposit or investment with any banking institution.

Also, a prior court order is not required for inquiry as provided under
section 11 of the Anti-Money Laundering Act for cases under section 3(i),(2), and
(12).

V.
 (10%)

Luisa makes a living out of maintaining a cybersex den where she exhibits children aged 12
or younger in the act of sexual intercourse, takes a video of the acts and uploads them in her
messenger account for viewing by interested foreign patrons for US$ 500.00 per live show. In
an entrapment operation spearheaded by the National Bureau of Investigation, Luisa was
then caught, apprehended and charged with Republic Act No. 9995 otherwise known as the
Child Pornography Act. It appears that Luisa has amassed a total of Php 2Million from this
line of cybersex business, the money deposited in a savings account in her name with ABC
Bank. The NBI sought assistance with AMLC whereby the latter issued an Order against ABC
Bank to produce pertinent documents and records pertaining to Luisa’s bank account. The
President of ABC Bank objected on the following grounds: (1) The order of the AMLC is a
violation of the Bank Secrecy Act; and (2) a prior court order is necessary to inquire into the
seven bank deposits. Is ABC Bank correct? Explain.
No, the order of AMLC is not a violation of the Bank Secrecy Act because
sec. 3(i) of Anti-Money Laundering Act provides that for unlawful activity such as
section 4 to 6 of RA 9208 or the Anti-Trafficking in Persons Act, the AMLC may
inquire into or examine any particular deposit or investment with any banking
institution.

Also, a prior court order is necessary for inquiry as provided under section
11 of the Anti-Money Laundering Act for cases under section 3(i),(2), and (12).

Nothing Follows 