TRUTH IN LENDING ACT (RA 3765) whichever is the greater, except that such liability
shall not exceed P2,000 on any credit transaction.
Disclosure Requirement
a. The law assures full disclosure by requiring the
lender to give the borrower all the details
regarding the transaction. Under Section 4 any
creditor shall furnish to each person to whom
credit is extended, prior to the consummation
of the transaction, a clear statement in writing
setting forth, to the extent applicable and in
accordance with rules and regulations
prescribed by the Board, the following
information:
(1) the cash price or delivered price of the
property or service to be acquired;
(2) the amounts, if any, to be credited as down
payment and/or trade-in;
(3) the difference between the amounts set
forth under clauses (1) and (2);
(4) the charges, individually itemized, which are
paid or to be paid by such person in connection
with the transaction but which are not incident
to the extension of credit;
(5) the total amount to be financed;
(6) the finance charge expressed in terms of
pesos and centavos; and
(7) the percentage that the finance bears to the
total amount to be financed expressed as a
simple annual rate on the outstanding unpaid
balance of the obligation.
b. The imposition of interest and finance charges
is void if not disclosed in the disclosure
statement (Heirs of Espiritu v Landrito, GR No.
169618)
c. Sec 6, TLA
Section 6. (a) Any creditor who in connection with
any credit transaction fails to disclose to any person
any information in violation of this Act or any
regulation issued thereunder shall be liable to such
person in the amount of P100 or in an amount
equal to twice the finance charged required by such
creditor in connection with such transaction,
Action to recover such penalty may be brought by
such person within one year from the date of the
occurrence of the violation, in any court of
competent jurisdiction. In any action under this
subsection in which any person is entitled to a
recovery, the creditor shall be liable for reasonable
attorney's fees and court costs as determined by
the court.
(b) Except as specified in subsection (a) of this
section, nothing contained in this Act or any
regulation contained in this Act or any regulation
thereunder shall affect the validity or enforceability
of any contract or transactions.
(c) Any person who willfully violates any provision
of this Act or any regulation issued thereunder shall
be fined by not less than P1,00 or more than P5,000
or imprisonment for not less than 6 months, nor
more than one year or both.
(d) No punishment or penalty provided by this Act
shall apply to the Philippine Government or any
agency or any political subdivision thereof.
(e) A final judgment hereafter rendered in any
criminal proceeding under this Act to the effect that
a defendant has willfully violated this Act shall be
prima facie evidence against such defendant in an
action or proceeding brought by any other party
against such defendant under this Act as to all
matters respecting which said judgment would be
an estoppel as between the parties thereto.
Full Entry of Foreign Banks in the Philippines (RA
10641, amending RA 7721)
a. Modes of Entry
Section 1. Section 2 of Republic Act No. 7721 is
hereby amended to read as follows:
"SEC. 2. Modes of Entry. – The Monetary Board
may authorize foreign banks to operate in the
Philippine banking system through any one of
the following" modes of entry: (i) by acquiring,
purchasing or owning up to one hundred
percent (100%) of the voting stock of an existing
bank; (ii) by investing in up to one hundred
percent (100%) of the voting stockof a new
 banking subsidiary incorporated under the laws
of the Philippines; or (iii) by establishing
branches with full banking authority."
b. Who are allowed to enter
c. Guidelines for approval
Section 2. Section 3 of Republic Act No. 7721 is
hereby amended to read as follows:
"SEC. 3. Guidelines for Approval. – In approving
entry applications of foreign banks, the Monetary
Board shall: (i) ensure geographic representation
and complementation; (ii) consider strategic trade
and investment relationships between the
Philippines and the country of incorporation of the
foreign bank; (iii) study the demonstrated capacity,
global reputation for financial innovations and
stability in a competitive environment of the
applicant; (iv) see to it that reciprocity rights are
enjoyed by Philippine banks in the applicant’s
country; and (v) consider willingness to fully share
their technology.
"Only established, reputable and financially sound
foreign banks shall be allowed entry in accordance
with Section 2 of this Act. The foreign bank
applicant must be widely-owned and publicly-listed
in its country of origin, unless the foreign bank
applicant is owned and controlled by the
government of its country of origin.
"In the exercise of this authority, the Monetary
Board shall adopt such measures as may be
necessary to ensure that the control of at least sixty
percent(60%) of the resources or assets of the
entire banking system is held by domestic banks
which are majority-owned by Filipinos."
d. Capital Requirements
Section 3. Section 4 of Republic Act No. 7721 is
hereby amended to read as follows:
"SEC. 4. Capital Requirements. – (i) For Locally
Incorporated Subsidiaries – The minimum capital
required for locally incorporated subsidiaries of
foreign banks shall be equal to that prescribed by
the Monetary Board for domestic banks of the same
category.
"(ii) For Foreign Bank Branches – Foreign banks that
shall be authorized to establish branches pursuant
to Section 2(hi) of this Act shah permanently assign
capital of an amount not less than the minimum
capital required for domestic banks of the same
category. The permanently assigned capital shall be
inwardly remitted and converted into Philippine
currency.
"The foreign bank branch may open up to five (5)
sub-branches as may be approved by the Monetary
Board. Locally incorporated subsidiaries of foreign
banks pursuant to Section 2(h) of this Act shall have
the same branching privileges as domestic banks of
the same category."
e. Board of Directors
f. Equal treatment
Section 5. Section 8 of Republic Act No. 7721 is
hereby amended to read as follows:
"SEC. 8. Equal Treatment. – Foreign banks
authorized to operate under Section 2 of this Act,
shall perform the same functions, enjoy the same
privileges, and be subject to the same limitations
imposed upon a Philippine bank of the same
category. The single borrower’s limit of a foreign
bank branch shall be aligned with that of a domestic
bank.
"The foreign banks shall guarantee the observance
of the rights of their employees under the
Constitution.
"Any right, privilege or incentive granted to foreign
banks or their subsidiaries or affiliates under this
Act, shall be equally enjoyed by and extended under
the same conditions to Philippine banks."
g. Change of Mode of Entry
PARCON-SONG V PARCON
Julie is the daughter of Spouses Joaquin and Lilia Parcon
(the Parcon Spouses).6 In 1995, the Parcon Spouses
obtained two loans from Maybank Philippines, Inc.
(Maybank).7 As security, they executed a real estate
mortgage over a parcel of land covered by Transfer
Certificate of Title No. 107064, registered in the name
of Lilia Parcon.8 The real estate mortgage was
annotated on the title. In 2001, when the Parcon
Spouses defaulted on their loans, Maybank foreclosed
the mortgage. In the foreclosure proceedings, Maybank
emerged as the highest bidder, and thus, was issued a
certificate of sale.10 The certificate of sale was
registered with the Register of Deeds.11
On March 4, 2003, Julie filed a Complaint praying that
the following be declared void: (1) Transfer Certificate
of Title No. 107064; (2) the real estate mortgage dated
November 28, 1995 in favor of Maybank; and (3) the
foreclosure proceedings. She likewise sought that the
property be reconveyed to her as its true and lawful
owner. Julie also prayed for a declaration of family
home and that Maybank be ordered to pay damages.12
Julie asserted that she had purchased the property from
PACE Realty Investment, Inc. in August 1983, paying it in
full. By way of trust, she used her mother's name to
acquire the property.13 Thus, in 1994, the title was
registered in Lilia Parcon's name.
Maybank argued in its Answer that it was a mortgagee
in good faith and for value. It alleged that it verified the
property with the Register of Deeds of Quezon City, and
it found no defect or anything suspicious about the
genuineness and execution of the title. By way of
counterclaim, it also sought damages and attorney's
fees
Julie moved for the judicial admission that Maybank is a
foreign corporation, disqualified under the Constitution
to own private lands. The Regional Trial Court took
judicial notice of Maybank's Articles of Incorporation
and General Information Sheet.
The Court of Appeals also ruled that the extrajudicial
sale was valid as the applicable law, Act No. 3135, only
required that the mortgage be registered. It explained
that while a family home is generally exempt from
execution, but if it was mortgaged to secure a debt,
then it may be subject to execution, forced sale, or
attachment.
The Court of Appeals found that Maybank, a foreign
bank, was still given a license to operate in the
Philippines, which satisfied the requirement to protect
Philippine equity. It cited Section 8 of Republic Act No.
7721, which accorded foreign banks equal treatment as
domestic banks, in ruling that Maybank had the right to
acquire the mortgaged property in foreclosure
proceedings.
Office of the Solicitor General posits that the
respondent Maybank's foreclosure of the mortgage and
acquisition of the property did not violate the
Constitution.47
SECTION 2. Modes of Entry. — The Monetary Board
may authorize foreign banks to operate in the Philippine
banking system through any of the following modes of
entry: (i) by acquiring, purchasing or owning up to sixty
percent (60%) of the voting stock of an existing bank; (ii)
by investing in up to sixty percent (60%) of the voting
stock of a new banking subsidiary incorporated under
the laws of the Philippines; or (iii) by establishing
branches with full banking authority: Provided, That a
foreign bank may avail itself of only one (1) mode of
entry: Provided, further, That a foreign bank or a
Philippine corporation may own up to a sixty percent
(60%) of the voting stock of only one (1) domestic bank
or new banking subsidiary.
It notes that the foreign bank may operate in the
Philippines.48 It adds that the bank had entered the
Philippine banking system by purchasing Philippine
National Bank-Republic Bank from the Philippine
government,49 which meant it has the same functions,
privileges, and limitations as all Philippine banks.50
The Office of the Solicitor General adds that Republic
Act No. 10641 has allowed foreign banks to bid and take
part in foreclosure sales of real property mortgaged to
them and to possess it within five years.51
The Office of the Solicitor further notes that the
constitutional prohibition on alien ownership of lands
does not apply in this case, as respondent Maybank did
not become the absolute owner of the property.52
Unlike a domestic bank,53 a foreign bank does not
acquire the property as an absolute owner, but only as
a possessor with a "special right and duty to sell"54 the
property to a qualified Philippine national within five
years. Even if no redemption is made within a year of
registration of the certificate of sale, a foreign bank still
cannot encumber, transform, or destroy the property it
acquired in a foreclosure sale.55
The Office of the Solicitor General maintains that the
national patrimony remains preserved, because
Republic Act Nos. 4882 and 10641 prohibit title
transfers to foreign banks and require them to sell the
foreclosed property to qualified Philippine nationals.

ISSUE: whether or not respondent Maybank Philippines,
Inc. is a foreign bank authorized by the Monetary Board
to operate in the Philippine banking system; and Finally,
whether or not respondent Maybank Philippines, Inc.'s
foreclosure and acquisition of the properties are
authorized under the Constitution despite it being a
fully-owned foreign corporation.
RULING:
Under the doctrine of mortgagee in good faith, a
mortgage is deemed valid if the mortgagee relied in
good faith on what appears on the face of the
certificate of title. This is so even if the mortgagor
fraudulently acquired the title to the property.
However, when the mortgagee is a bank, a higher
standard is imposed before it is considered a mortgagee
in good faith. Banks cannot simply rely on the title
alone, but must further investigate the property to
ensure the genuineness of the title
SECTION 1. Any provision of law to the contrary
notwithstanding, private real property may be
mortgaged in favor of any individual, corporation, or
association, but the mortgage or his successor in
interest, if disqualified to acquire or hold lands of the
public domain in the Philippines, shall not take
possession of the mortgaged property during the
existence of the mortgage and shall not take possession
of mortgaged property except after default and for the
sole purpose of foreclosure, receivership, enforcement
or other proceedings and in no case for a period of
more than five years from actual possession and shall
not bid or take part in any sale of such real property in
case of foreclosure: Provided, That said mortgagee or
successor in interest may take possession of said
property after default in accordance with the prescribed
judicial procedures for foreclosure and receivership and
in no case exceeding five years from actual
possession.114 (Emphasis supplied)
Thus, a mortgagee who is prohibited from acquiring
public lands may possess the property for five years
after default and for the purpose of foreclosure.
However, it may not bid or take part in any foreclosure
sale of the real property.
In 2014, Congress enacted Republic Act No. 10641 to
amend the Foreign Bank Liberalization Act. The
amendment allowed the full entry of foreign banks in
the Philippines,115 though it maintained the State
policy to keep the financial system effectively controlled
by Filipinos.116 Notably, it gave authorized foreign
banks the same functions, privileges, and limitations as
domestic banks of the same category. Likewise, any
right, privilege, or incentive granted to foreign banks is
extended to Philippine banks.117 Thus, a new provision
on foreclosure proceedings was added:
SEC. 9. Participation in Foreclosure Proceedings. —
Foreign banks which are authorized to do banking
business in the Philippines through any of the modes of
entry under Section 2 hereof shall be allowed to bid and
take part in foreclosure sales of real property
mortgaged to them, as well as to avail of enforcement
and other proceedings, and accordingly take possession
of the mortgaged property, for a period not exceeding
five (5) years from actual possession: Provided, That in
no event shall title to the property be transferred to
such foreign bank. In case said bank is the winning
bidder, it shall, during the said five (5)-year period,
transfer its rights to a qualified Philippine national,
without prejudice to a borrower's rights under
applicable laws. Should the bank fail to transfer such
property within the five (5)-year period, it shall be
penalized one half (1/2) of one percent (1%) per annum
of the price at which the property was foreclosed until it
is able to transfer the property to a qualified Philippine
national.118
Thus, a foreign bank can now participate in foreclosure
sales of real property mortgaged to it, and even possess
it. There are limitations, namely: (a) the possession
must be limited to five years; (b) the property title shall
not be transferred to it; and (c) within the five-year
period, it must transfer its rights to a qualified
Philippine national. In case a foreign bank fails to
transfer the property, it will be liable to pay half of 1%
per annum of the foreclosure price until it transfers the
property.
Clearly, under Republic Act No. 10641, foreign banks
may now foreclose and acquire mortgaged properties.
However, Republic Act No. 10641, which was enacted in
2014, does not apply in this case. Here, the loans were
obtained and the real estate mortgage was executed
and annotated on the title in 1995.119 The default on
the loans, the foreclosure of the mortgage, and the
property acquisition took place in 2001.120
The law then in place was Republic Act No. 4882.
Consequently, respondent Maybank was still a
mortgagee disqualified to acquire lands in the
Philippines. It may possess the mortgaged property
after default and solely for foreclosure, but it cannot bid
or take part in any foreclosure sale.
Thus, the sale to respondent Maybank is invalid.
Court PARTIALLY GRANTS the Petition. The August 17,
2011 Decision and November 28, 2011 Resolution of the
Court of Appeals in CA-G.R. CV No. 93681 is MODIFIED.
Transfer Certificate of Title No. 107064 in the name of
respondent Lilia Parcon and the real estate mortgage
dated November 28, 1995 in favor of respondent
May bank Philippines, Inc. are deemed VALID.
Petitioner Julie Parcon-Song's prayer to transfer the
property to her as its true and lawful owner is DENIED.
However, the foreclosure sale of the property in favor
of respondent Maybank Philippines, Inc. is declared
VOID, without prejudice to another foreclosure sale
under Republic Act No. 10641 if warranted.
Anti-Money Laundering Act (RA 9160 as amended by
RA 9194 and RA 10635)
a. State policy (RA 9160 IRR as amended,
2021)
The provisions of this IRR are in line with the
following State Policies:
(a) x x x
(b) To extend cooperation, consistent with
Philippines’ foreign policy, in Transnational
investigations and prosecutions of persons
involved in money laundering activities
wherever committed, as well as in the
implementation of targeted financial
sanctions related to the financing of the
proliferation of weapons of mass
destruction, terrorism, and terrorism
financing, pursuant to the resolutions of the
United Nations Security Council.”
b. What is money laundering (RA 10365)
Money Laundering is a crime committed by any
person who knowing that a monetary
instrument or property represents, involves, or
relates to the proceeds of any unlawful activity:
(1) Transacts said monetary instrument or
property;
(2) Converts, transfers, disposes of, moves,
acquires, possesses, or uses said monetary
instrument or property;
(3) Conceals or disguises the true nature,
source, location, disposition, movement, or
ownership of or rights with respect to said
monetary instrument or property;
(4) Attempts or conspires to commit money
laundering in (1),(2),(3);
(5) Aids, abets, assist in or counsels the
commission of money laundering offenses
referred to in (1), (2), (3);
(6) Performs or fails to perform any act as a
result of which he facilitates the offense of
money laundering in (1),(2), (3);
(7) This is also committed by failure to report
to the AMLC by any covered person
knowing that a covered or suspicious
transaction is required under the Anti-
Money Lanudering Law to be reported
thereto.
c. Covered transactions (RA 9194; 2021
Revised IRR of RA 9160)
It is a transaction in cash or other equivalent
involving excess of 500,000 within one banking
day.
Casino now covered under Sec 3(a)(8), single
casino transaction involving excess of 5m or its
equivalent in any currency
Section 3. Sector 3 of Republic Act No. 9160, as
amended, is hereby further amended by
inserting a new paragraph (l) to read as follows:
“x x x
“(l) For purposes of covered persons under
Section 3(a)(8), the following terms are hereby
defined as follows:
“(1) ‘Casino’ refers to a business authorized by
the appropriate goverment agency to engage in
gaming operations:
 “(i) ‘Internet-based casinos’ shall refer a casinos
in which persons participate by the use of
remote communication facilities such as, but
not limited to, internet, telephone, television,
radio or any other kind of electronic or other
technology for facilitating communication; and
“(ii) ‘Ship-based casino’ shall refer to casinos,
the operation of which is undertaken on board
a vessel, ship, boat or any other water-based
craft wholly or partly intended for gambling;
“(2) ‘Casino cash transaction’ refers to
transactions involving the receipt of cash by a
casino paid by or on behalf of a customer, or
transactions involving the payout of cash by a
casino to a customer or to any person in his/her
behalf; and
“(3) ‘Gaming operations’ refer to the activities
of the casino offering games of chance and any
variations thereof approved by the appropriate
government authorities.”
d. Suspicious transactions (RA 9194; See 2018
Revised IRR, RA 9160; Sec. 4, RA 10168)
RA 9194
SECTION 2. Section 3 of the same Act is further
amended by inserting between paragraphs (b)
and (c) a new paragraph designated as (b-1) to
read as follows:
“(b-1) ‘Suspicious transaction’ are transactions
with covered institutions, regardless of the
amounts involved, where any of the following
circumstances exist:
“1. there is no underlying legal or trade
obligation, purpose or economic justification;
“2. the client is not properly identified;
“3. the amount involved is not commensurate
with the business or financial capacity of the
client;
“4. taking into account all known circumstances,
it may be perceived that the client’s transaction
is structured in order to avoid being the subject
of reporting requirements under the Act;
“5. any circumstance relating to the transaction
which is observed to deviate from the profile of
the client and/or the client’s past transactions
with the covered institution;
“6. the transaction is in any way related to an
unlawful activity or offense under this Act that
is about to be, is being or has been committed;
or
“7. any transaction that is similar or analogous
to any of the foregoing.”
2018 Revised IRR, RA 9160
“Suspicious Circumstance” refers to any of the
following circumstances, the existence of which
makes a transaction suspicious:
(1) there is no underlying legal or trade
obligation, purpose or economic justification;
(2) the client is not properly identified;
(3) the amount involved is not commensurate
with the business or financial capacity of the
client;
(4) taking into account all known circumstances,
it may be perceived that the client’s transaction
is structured in order to avoid being the subject
of reporting requirements under the AMLA;
(5) any circumstance relating to the transaction
which is observed to deviate from the profile of
the client and/or the client’s past transactions
with the covered person;
(6) the transaction is in any way related to
ML/TF or related unlawful activity that is about
to be committed, is being or has been
committed; or
(7) any transaction that is similar, analogous or
identical to any of the foregoing, such as the
relevant transactions in related and materially-
linked accounts, as herein defined.
(yyyy) “Suspicion” refers to a person’s state of
mind—based on his skills, experience, and/or
understanding of the customer profile—which
considers that there is a possibility that any of
the suspicious circumstances exists.
(zzzz) “Suspicious Transaction” refers to a
transaction, regardless of amount, where any of
the suspicious circumstances, as herein defined,
is determined, based on suspicion or, if
available, reasonable grounds, to be existing.
 (aaaaa) “Suspicious Transaction Report” (STR)
refers to a report on a suspicious transaction, as
herein defined, filed by a covered person before
the AMLC.
e. Covered persons (RA 10365; See 2021
Revised IRR)
RA 10365
SECTION 1. Section 3(a) of Republic Act No. 9160, as
amended, is hereby amended to read as follows:
“(a) ‘Covered persons’, natural or juridical, refer to:
“(1) banks, non-banks, quasi-banks, trust entities,
foreign exchange dealers, pawnshops, money
changers, remittance and transfer companies and
other similar entities and all other persons and their
subsidiaries and affiliates supervised or regulated by
the Bangko Sentral ng Pilipinas (BSP);
“(2) insurance companies, pre-need companies and
all other persons supervised or regulated by the
Insurance Commission (IC);
“(3) (i) securities dealers, brokers, salesmen,
investment houses and other similar persons
managing securities or rendering services as
investment agent, advisor, or consultant, (ii) mutual
funds, close-end investment companies, common
trust funds, and other similar persons, and (iii) other
entities administering or otherwise dealing in
currency, commodities or financial derivatives
based thereon, valuable objects, cash substitutes
and other similar monetary instruments or property
supervised or regulated by the Securities and
Exchange Commission (SEC);
“(4) jewelry dealers in precious metals, who, as a
business, trade in precious metals, for transactions
in excess of One million pesos (P1,000,000.00);
“(5) jewelry dealers in precious stones, who, as a
business, trade in precious stones, for transactions
in excess of One million pesos (P1,000,000.00);
“(6) company service providers which, as a business,
provide any of the following services to third
parties: (i) acting as a formation agent of juridical
persons; (ii) acting as (or arranging for another
person to act as) a director or corporate secretary
of a company, a partner of a partnership, or a
similar position in relation to other juridical
persons; (iii) providing a registered office, business
address or accommodation, correspondence or
administrative address for a company, a partnership
or any other legal person or arrangement; and (iv)
acting as (or arranging for another person to act as)
a nominee shareholder for another person; and
“(7) persons who provide any of the following
services:
(i) managing of client money, securities or other
assets;
(ii) management of bank, savings or securities
accounts;
(iii) organization of contributions for the creation,
operation or management of companies; and
(iv) creation, operation or management of juridical
persons or arrangements, and buying and selling
business entities.
“Notwithstanding the foregoing, the term ‘covered
persons’ shall exclude lawyers and accountants
acting as independent legal professionals in relation
to information concerning their clients or where
disclosure of information would compromise client
confidences or the attorney-client relationship:
Provided, That these lawyers and accountants are
authorized to practice in the Philippines and shall
continue to be subject to the provisions of their
respective codes of conduct and/or professional
responsibility or any of its amendments.”
1. Lawyer, accounts not covered
f. Unlawful activity (RA 10365; 2021 Revised
IRR)
SEC. 2. Section 3(i) of the same Act is hereby
amended to read as follows:
“(i) ‘Unlawful activity’ refers to any act or omission
or series or combination thereof involving or having
direct relation to the following:
“(1) Kidnapping for ransom under Article 267 of Act
No. 3815, otherwise known as the Revised Penal
Code, as amended;
“(2) Sections 4, 5, 6, 8, 9, 10, 11, 12, 13, 14, 15 and
16 of Republic Act No. 9165, otherwise known as
the Comprehensive Dangerous Drugs Act of 2002;
“(3) Section 3 paragraphs B, C, E, G, H and I of
Republic Act No. 3019, as amended, otherwise
known as the Anti-Graft and Corrupt Practices Act;
“(4) Plunder under Republic Act No. 7080, as
amended;
“(5) Robbery and extortion under Articles 294, 295,
296, 299, 300, 301 and 302 of the Revised Penal
Code, as amended;
“(6) Jueteng and Masiao punished as illegal
gambling under Presidential Decree No. 1602;
“(7) Piracy on the high seas under the Revised Penal
Code, as amended and Presidential Decree No. 532;
“(8) Qualified theft under Article 310 of the Revised
Penal Code, as amended;
“(9) Swindling under Article 315 and Other Forms of
Swindling under Article 316 of the Revised Penal
Code, as amended;
“(10) Smuggling under Republic Act Nos. 455 and
1937;
“(11) Violations of Republic Act No. 8792, otherwise
known as the Electronic Commerce Act of 2000;
“(12) Hijacking and other violations under Republic
Act No. 6235; destructive arson and murder, as
defined under the Revised Penal Code, as amended;
“(13) Terrorism and conspiracy to commit terrorism
as defined and penalized under Sections 3 and 4 of
Republic Act No. 9372;
“(14) Financing of terrorism under Section 4 and
offenses punishable under Sections 5, 6, 7 and 8 of
Republic Act No. 10168, otherwise known as the
Terrorism Financing Prevention and Suppression Act
of 2012:
“(15) Bribery under Articles 210, 211 and 211-A of
the Revised Penal Code, as amended, and
Corruption of Public Officers under Article 212 of
the Revised Penal Code, as amended;
“(16) Frauds and Illegal Exactions and Transactions
under Articles 213, 214, 215 and 216 of the Revised
Penal Code, as amended;
“(17) Malversation of Public Funds and Property
under Articles 217 and 222 of the Revised Penal
Code, as amended;
“(18) Forgeries and Counterfeiting under Articles
163, 166, 167, 168, 169 and 176 of the Revised
Penal Code, as amended;
“(19) Violations of Sections 4 to 6 of Republic Act
No. 9208, otherwise known as the Anti-Trafficking
in Persons Act of 2003;
“(20) Violations of Sections 78 to 79 of Chapter IV,
of Presidential Decree No. 705, otherwise known as
the Revised Forestry Code of the Philippines, as
amended;
“(21) Violations of Sections 86 to 106 of Chapter VI,
of Republic Act No. 8550, otherwise known as the
Philippine Fisheries Code of 1998;
“(22) Violations of Sections 101 to 107, and 110 of
Republic Act No. 7942, otherwise known as the
Philippine Mining Act of 1995;
“(23) Violations of Section 27(c), (e), (f), (g) and (i),
of Republic Act No. 9147, otherwise known as the
Wildlife Resources Conservation and Protection Act;
“(24) Violation of Section 7(b) of Republic Act No.
9072, otherwise known as the National Caves and
Cave Resources Management Protection Act;
“(25) Violation of Republic Act No. 6539, otherwise
known as the Anti-Carnapping Act of 2002, as
amended;
“(26) Violations of Sections 1, 3 and 5 of Presidential
Decree No. 1866, as amended, otherwise known as
the decree Codifying the Laws on Illegal/Unlawful
Possession, Manufacture, Dealing In, Acquisition or
Disposition of Firearms, Ammunition or Explosives;
“(27) Violation of Presidential Decree No. 1612,
otherwise known as the Anti-Fencing Law;
“(28) Violation of Section 6 of Republic Act No.
8042, otherwise known as the Migrant Workers and
Overseas Filipinos Act of 1995, as amended by
Republic Act No. 10022;
“(29) Violation of Republic Act No. 8293, otherwise
known as the Intellectual Property Code of the
Philippines;
“(30) Violation of Section 4 of Republic Act No.
9995, otherwise known as the Anti-Photo and Video
Voyeurism Act of 2009;
“(31) Violation of Section 4 of Republic Act No.
9775, otherwise known as the Anti-Child
Pornography Act of 2009;
“(32) Violations of Sections 5, 7, 8, 9, 10(c), (d) and
(e), 11, 12 and 14 of Republic Act No. 7610,
otherwise known as the Special Protection of
Children Against Abuse, Exploitation and
Discrimination;
“(33) Fraudulent practices and other violations
under Republic Act No. 8799, otherwise known as
the Securities Regulation Code of 2000; and
“(34) Felonies or offenses of a similar nature that
are punishable under the penal laws of other
countries.”
g. Liabilities of Covered Persons when
Reporting Covered/Suspicious Transactions
(c) Reporting of Covered Transactions. — Covered
institutions shall report to the AMLC all covered
transactions within five (5) working days from
occurrence thereof, unless the Supervising
Authority concerned prescribes a longer period not
exceeding ten (10) working days.
When reporting covered transactions to the AMLC,
covered institutions and their officers, employees,
representatives, agents, advisors, consultants or
associates shall not be deemed to have violated
Republic Act No. 1405, as amended; Republic Act
No. 6426, as amended; Republic Act No. 8791 and
other similar laws, but are prohibited from
communicating, directly or indirectly, in any manner
or by any means, to any person the fact that a
covered transaction report was made, the contents
thereof, or any other information in relation
thereto. In case of violation thereof, the concerned
officer, employee, representative, agent, advisor,
consultant or associate of the covered institution,
shall be criminally liable. However, no
administrative, criminal or civil proceedings, shall lie
against any person for having made a covered
transaction report in the regular performance of his
duties and in good faith, whether or not such
reporting results in any criminal prosecution under
this Act or any other Philippine law.
When reporting covered transactions to the AMLC,
covered institutions and their officers, employees,
representatives, agents, advisors, consultants or
associates are prohibited from communicating,
directly or indirectly, in any manner or by any
means, to any person, entity, the media, the fact
that a covered transaction report was made, the
contents thereof, or any other information in
relation thereto. Neither may such reporting be
published or aired in any manner or form by the
mass media, electronic mail, or other similar
devices. In case of violation thereof, the concerned
officer, employee, representative, agent, advisor,
consultant or associate of the covered institution, or
media shall be held criminally liable.
h. Jurisdiction over Money Laundering cases
SEC. 5. Jurisdiction of Money Laundering Cases. —
The regional trial courts shall have jurisdiction to try
all cases on money laundering. Those committed by
public officers and private persons who are in
conspiracy with such public officers shall be under
the jurisdiction of the Sandiganbayan.
i. Prohibited communications under AMLA;
safe harbor provision (Sec. 7, RA 10365)
Safe Harbor Provision. No administrative, criminal
or civil proceedings shall lie against any person for
having made a covered transaction report in the
regular performance of his duties and in good faith,
whether or not such reporting results in any
criminal prosecution under the AMLA or any other
Philippine law.
Sec. 7, RA 10365
SEC. 7. Section 9(c), paragraphs 1 and 4 of the same
Act are hereby amended to read as follows:
“SEC. 9. Prevention of Money Laundering; Customer
Identification Requirements and Record Keeping. –
“(a) x x x
“(b) x x x
“(c) Reporting of Covered and Suspicious
Transactions. – Covered persons shall report to the
AMLC all covered transactions and suspicious
transactions within five (5) working days from
occurrence thereof, unless the AMLC prescribes a
different period not exceeding fifteen (15) working
days.
“Lawyers and accountants acting as independent
legal professionals are not required to report
covered and suspicious transactions if the relevant
information was obtained in circumstances where
they are subject to professional secrecy or legal
professional privilege.
“x x x
“x x x
“When reporting covered or suspicious transactions
to the AMLC, covered persons and their officers and
employees are prohibited from communicating,
directly or indirectly, in any manner or by any
means, to any person or entity, the media, the fact
that a covered or suspicious transaction has been
reported or is about to be reported, the contents of
the report, or any other information in relation
thereto. Neither may such reporting be published or
aired in any manner or form by the mass media”,
electronic mail, or other similar devices. In case of
violation thereof, the concerned officer and
employee of the covered person and media shall be
held criminally liable.”
j. Prosecution of Money Laundering cases
SEC. 5. Section 6(a) of the same Act is hereby
amended to read as follows:
“SEC. 6. Prosecution of Money Laundering. –
“(a) Any person may be charged with and convicted
of both the offense of money laundering and the
unlawful activity as herein defined.
“(b) The prosecution of any offense or violation
under this Act shall proceed independently of any
proceeding relating to the unlawful activity.”
k. Anti-Money Laundering Council; functions
RA 9160
SEC. 7. Creation of Anti-Money Laundering Council
(AMLC). — The Anti-Money Laundering Council is
hereby created and shall be composed of the
Governor of the Bangko Sentral ng Pilipinas as
chairman, the Commissioner of the Insurance
Commission and the Chairman of the Securities and
Exchange Commission as members. The AMLC shall
act unanimously in the discharge of its functions as
defined hereunder:
(1) to require and receive covered transaction
reports from covered institutions;
(2) to issue orders addressed to the appropriate
Supervising Authority or the covered institution to
determine the true identity of the owner of any
monetary instrument or property subject of a
covered transaction report or request for assistance
from a foreign State, or believed by the Council, on
the basis of substantial evidence, to be, in whole or
in part, wherever located, representing, involving,
or related to, directly or indirectly, in any manner or
by any means, the proceeds of an unlawful activity;
(3) to institute civil forfeiture proceedings and all
other remedial proceedings through the Office of
the Solicitor General;
(4) to cause the filing of complaints with the
Department of Justice or the Ombudsman for the
prosecution of money laundering offenses;
(5) to initiate investigations of covered transactions,
money laundering activities and other violations of
this Act;
(6) to freeze any monetary instrument or property
alleged to be proceeds of any unlawful activity;
(7) to implement such measures as may be
necessary and justified under this Act to counteract
money laundering;
(8) to receive and take action in respect of, any
request from foreign states for assistance in their
own anti-money laundering operations provided in
this Act;
(9) to develop educational programs on the
pernicious effects of money laundering, the
methods and techniques used in money laundering,
the viable means of preventing money laundering
and the effective ways of prosecuting and punishing
offenders; and
(10) to enlist the assistance of any branch,
department, bureau, office, agency or
instrumentality of the government, including
government-owned and -controlled corporations, in
undertaking any and all anti-money laundering
operations, which may include the use of its
personnel, facilities and resources for the more
resolute prevention, detection and investigation of
money laundering offenses and prosecution of
offenders.
SEC. 8. Creation of a Secretariat. — The AMLC is
hereby authorized to establish a secretariat to be
headed by an Executive Director who shall be
appointed by the Council for a term of five (5) years.
He must be a member of the Philippine Bar, at least
thirty-five (35) years of age and of good moral
character, unquestionable integrity and known
probity. All members of the Secretariat must have
served for at least five (5) years either in the
Insurance Commission, the Securities and Exchange
Commission or the Bangko Sentral ng Pilipinas (BSP)
and shall hold full-time permanent positions within
the BSP.
RA 10365
SEC. 6. Section 7 of the same Act is hereby amended
to read as follows:
“SEC. 7. Creation of Anti-Money Laundering Council
(AMLC). – The Anti-Money Laundering Council is
hereby created and shall be composed of the
Governor of the Bangko Sentral ng Pilipinas as
Chairman, the Commissioner of the Insurance
Commission and the Chairman of the Securities and
Exchange Commission, as members. The AMLC shall
act unanimously in the discharge of its functions as
defined hereunder:
“x x x
“(6) to apply before the Court of Appeals, ex parte,
for the freezing of any monetary instrument or
property alleged to be laundered, proceeds from, or
instrumentalities used in or intended for use in any
unlawful activity as defined in Section 3(i) hereof;
“x x x
“(12) to require the Land Registration Authority and
all its Registries of Deeds to submit to the AMLC,
reports on all real estate transactions involving an
amount in excess of Five hundred thousand pesos
(P500,000.00) within fifteen (15) days from the date
of registration of the transaction, in a form to be
prescribed by the AMLC. The AMLC may also
require the Land Registration Authority and all its
Registries of Deeds to submit copies of relevant
documents of all real estate transactions.”
l. Prevention of money laundering
RA 9160 (SEC 9)
SEC. 9. Prevention of Money Laundering; Customer
Identification Requirements and Record Keeping. —
(a) Customer Identification. — Covered institutions
shall establish and record the true identity of its
clients based on official documents. They shall
maintain a system of verifying the true identity of
their clients and, in case of corporate clients,
require a system of verifying their legal existence
and organizational structure, as well as the
authority and identification of all persons
purporting to act on their behalf.
1. Customer identification
Covered institution shall establish and
record the true identity of its clients
based on official documents. Maintain a
system verifying the true identity of
clients.
2. Record keeping
Transactions shall be maintained and
safely stored for 5 years from the dates
of transactions.
3. Reporting of covered and suspicious
transactions
Report within 5 working days unless
AMLC prescribes longer period not
exceeding 15 days. Conviction is not
necessary before a report is made.
m. Freezing of monetary instrument of
property

RA 10365
“SEC. 10. Freezing of Monetary Instrument or
Property. – Upon a verified ex parte petition by the
AMLC and after determination that probable cause
exists that any monetary instrument or property is
in any way related to an unlawful activity as defined
in Section 3(i) hereof, the Court of Appeals may
issue a freeze order which shall be effective
immediately, and which shall not exceed six (6)
months depending upon the circumstances of the
case: Provided, That if there is no case filed against
a person whose account has been frozen within the
period determined by the court, the freeze order
shall be deemed ipso facto lifted: Provided, further,
That this new rule shall not apply to pending cases
in the courts. In any case, the court should act on
the petition to freeze within twenty-four (24) hours
from filing of the petition. If the application is filed a
day before a nonworking day, the computation of
the twenty-four (24)-hour period shall exclude the
nonworking days.
“A person whose account has been frozen may file a
motion to lift the freeze order and the court must
resolve this motion before the expiration of the
freeze order.
“No court shall issue a temporary restraining order
or a writ of injunction against any freeze order,
except the Supreme Court.”
FREEZE ORDER:
1. Verified ex parte petition by AMLC
2. CA determined probable cause
3. Freeze order> effective immediately for 20 days
4. CA conduct a summary hearing WON to modify
freeze order
5. FO> period not exceeding 6 months
RA 10927
“Sec. 10. Freezing of Monetary Instrument or
Property.— Upon a verified ex parte petition by the
AMLC and after determination that probable cause
exists that any monetary instrument or property is
in any way related to an unlawful activity as defined
in Section 3(i) hereof, the Court of Appeals may
issue a freeze order which shall be effective
immediately, for a period of twenty (20) days.
Within the twenty (20)-day period, the Court of
Appeals shall conduct a summary hearing, with
notice to the parties, to determine whether or not
to modify or lift the freeze order, or extend its
effectivity. The total period of the freeze order
issued by the Cout of Appeals under this provision
shall not exceed six (6) months. This is without
prejudice to an asset preservation order that the
Regional Trial Court having jurisdiction over the
appropriate anti-money laundering case or civil
forfeiture case may issue on the same account
depending upon the circumstances of the case,
where the Court of Appeals will remand the case
and its records: Provided, That if there is no case
filed against a person whose account has been
frozen within the period determined by the Court of
Appeals, not exceeding six (6) months, the freeze
order shall be seemed ipso facto lifted: Provided,
further, That this new rule shall not apply to
pending cases in the courts. In any case, the court
should act on the petition to freeze within twenty-
four (24) hours from filing of the petition. If the
application is filed a day before a no working day,
the computation of the twenty-four (24)-hour
period shall exclude the nonworking days.
“The freeze order or asset preservation order issued
under this Act shall be limited only to the amount of
cash or monetary instrument or value of property
that the court finds there is probable cause to be
considered as proceeds of a predicate offense, and
the freeze order or asset preservation order shall
not apply to amounts in the same account in excess
of the amount or value of the proceeds of the
predicate offense.
Read:
RA 10927 on casinos
Section 1. Section 3(a) of Republic Act No. 9160, as
amended, is hereby further amended to read as follows:
“(a) ‘Covered persons’, natural on juridical, refer to:
“x x x
“(8) casinos, including internet and ship-based casinos,
with respect to their casino cash transactiotus related
to they gaming operations.
Section 2. Section 3(b) of Republic Act No. 9160 is
hereby further amended to read as follows:
“(b) ‘Covered transaction’ is a transaction in cash or
other equivalent monetary instrument involving a total
amount in excess of Five hundred thousand pesos
(₱500,000.00) within one (1) banking day; for covered
persons under Section 3(a)(8), a single casino
transaction involving an amount in excess of Five million
pesos (₱5,000,000.00) or its equivalent in any other
currency.
Section 3. Sector 3 of Republic Act No. 9160, as
amended, is hereby further amended by inserting a new
paragraph (l) to read as follows:
“x x x
“(l) For purposes of covered persons under Section 3(a)
(8), the following terms are hereby defined as follows:
“(1) ‘Casino’ refers to a business authorized by the
appropriate goverment agency to engage in gaming
operations:
“(i) ‘Internet-based casinos’ shall refer a casinos in
which persons participate by the use of remote
communication facilities such as, but not limited to,
internet, telephone, television, radio or any other kind
of electronic or other technology for facilitating
communication; and
“(ii) ‘Ship-based casino’ shall refer to casinos, the
operation of which is undertaken on board a vessel,
ship, boat or any other water-based craft wholly or
partly intended for gambling;
“(2) ‘Casino cash transaction’ refers to transactions
involving the receipt of cash by a casino paid by or on
behalf of a customer, or transactions involving the
payout of cash by a casino to a customer or to any
person in his/her behalf; and
“(3) ‘Gaming operations’ refer to the activities of the
casino offering games of chance and any variations
thereof approved by the appropriate government
authorities.”
“Sec. 18. Implementing Rules and Regulations.—
“x x x
“x x x
“Within ninety (90) days from the effectivity of this Act,
the AMLC, the Philippine Amusement and Gaming
Corporation (PAGCOR) and other government
regulatory agencies shall jointly promulgate the rules
and regulations to implement the provisions of this Act
as applicable to casinos as covered institutions. The
implementing rules applicable to other covered
institiations shall not apply to casinos unless it is
expressly so provided under the rules and regulations to
implement the provisions of this Act.”
RA 10168
Sec. 36, RA 11479
Section 36. Authority to Freeze. - Upon the issuance by
the court of a preliminary order of proscription or in
case of designation under Section 25 of this Act, the
AMLC, either upon its own initiative or request of the
ATC, is hereby authorized to issue an ex parte order to
freeze without delay: (a) any property or funds that are
in any way related to financing of terrorism as defined
and penalized under Republic Act No. 101168, or any
violation of Sections 4, 5, 6, 7, 8, 9, 10, 11 or 12 of this
Act ; and (b) property or funds of any person or persons
in relation to whom there is probable cause to believe
that such person or persons are committing or
attempting or conspiring to commit, or participating in
or facilitating the financing of the aforementioned
sections of this Act.
The freeze order shall be effective for a period not
exceeding twenty (20) days. Upon a petition filed by the
AMLC before the expiration of the period, the effectivity
of the freeze order may be extended up to a period not
exceeding six (6) months upon order of the Court of
Appeals: Provided, That, the twenty-day period shall be
tolled upon filing of a petition to extend the effectivity
of the freeze order.
Notwithstanding the preceding paragraphs, the AMLC,
consistent with the Philippines international obligations,
shall be authorized to issue a freeze order with respect
to property or funds of a designated organization,
association, group or any individual to comply with
binding terrorism-related resolutions, including UNSCR
No. 1373 pursuant to Article 41 of the charter of the
UN. Said freeze order shall be effective until the basis
for the issuance thereof shall have been lifted. During
the effectivity of the freeze order, an aggrieved party
may, within twenty (20) days from issuance, file with
the Court of Appeals a petition to determine the basis
of the freeze order according to the principle of
effective judicial protection: Provided, That the person
whose property or funds have been frozen may
withdraw such sums as the AMLC determines to be
reasonably needed for monthly family needs and
sustenance including the services of counsel and the
family medical needs of such person.
However, if the property or funds subject of the freeze
order under the immediately preceding paragraph are
found to be in any way related to financing of terrorism
as defined and penalized under Republic Act No. 10168,
or any violation of Sections 4, 5, 6, 7, 8, 9, 10, 11 or 12
of this Act committed within the jurisdiction of the
Philippines, said property or funds shall be the subject
of civil forfeiture proceedings as provided under
Republic Act No. 10168.
Targeted financial sanctions under 2021 Revised IRR
Ligot vs Republic, GR 176944, March 6, 2012
DOCTRINE
1. A freeze order is an extraordinary and interim
relief issued by the Court of Appeals to prevent
the dissipation, removal, or disposal of
properties that are suspected to be the
proceeds of, or related to, unlawful activities as
defined in Section 3(i) of RA No. 9160, as
amended. The primary objective of a freeze
order is to temporarily preserve monetary
instruments or property that are in any way
related to an unlawful activity or money
laundering, by preventing the owner from
utilizing them during the duration of the freeze
order.
2. Based on Section 10 of R.A. No. 9160, as
amended by R.A. No. 9194, there are only two
requisites for the issuance of a freeze order: (1)
the application ex parte by the Anti-Money
Laundering Council, and (2) the determination
of probable cause by the Court of Appeals.
3. As a rule, the effectivity of a freeze order may
be extended by the Court of Appeals for a
period not exceeding six months; However,
should it become completely necessary for the
Republic to further extend the duration of the
freeze order, it should file the necessary motion
before the expiration of the six-month period
and explain the reason or reasons for its failure
to file an appropriate case and justify the period
of extension sought.
FACTS
1. The Republic, represented by the ALMC, filed an
application for the issuance of a freeze order
with the CA against certain monetary
instruments and properties of the petitioners
pursuant to Sec. 10 of the AMLA. This
application was based on a letter of the
Ombudsman to the AMLC recommending that
the latter conduct an investigation on Lt. Gen.
Ligot and his family for possible violation of the
AMLA. In support of this recommendation, the
OMB attached the complaint it filed against the
Ligots for perjury and for violations of the Anti-
Graft and Corrupt Practices Act.
2. [OMB’s complaint if you’re interested] Lt. Ligot
declared in his SALN that as of 2003, he had assets
in the total amount of P3.8 million. In contrast, his
declared assets in his 1982 SALN amounted to only
P105K. Also, Ligot and his family had undeclared
properties and bank accounts amounting to P54
million. Bearing in mind that Ligot’s main source of
income was his salary as an officer of the AFP, and
given his wife and children’s lack of any other
substantial sources of income, the OMB declared
the assets registered in Ligot’s name as well as
those in his wife’s and children’s, to be illegally
obtained and unexplained wealth. The OMB also
looked into Edgardo Yambao, Mrs.
Ligot’s younger brother and concluded that Yambao
acted as a dummy of the Ligot spouses, and all
properties registered in Yambao’s name actually
belong to the Ligot family.
3. As a result of the OMB’s complaint, the
Compliance and Investigation staff (CIS) of the
AMLC conducted a financial investigation and
revealed the existence of the Ligot’s various bank
accounts. OMB then issued a resolution holding
that probable cause exists and that Gen. Ligot
violated Sec. 81 , in relation to Sec. 112 of RA 67133
, as well as Art. 1834 of the RPC.
4. The AMLC then issued a resolution directing the
filing of an application for a freeze order against the
properties of Ligot and family with the CA.
Subsequently, Republic filed an urgent Ex-Parte
application with the CA for the issuance of a freeze
order against the properties of the Ligots and
Yambao. – Granted by the CA, holding that probable
cause exists. Accordingly, it issued freeze order.
5. Republic then filed a motion for extension of the
effectivity of the freeze order, arguing that if the
bank accounts, web accounts, and vehicles were
not continuously frozen, they could be placed
beyond the reach of law enforcement authorities
and the government’s efforts to recover the
proceeds of the Ligot’s unlawful activities would be
frustrated.
Republic informed the CA that the OMB was
presently investigating other cases (plunder,
perjury, violation of 3019, etc.) involving the Ligots.
– Granted by the CA, extending the freeze order
until after all the appropriate proceedings and/or
investigations have been termination.
6. Ligots then filed a motion to lift the extended
freeze order, principally arguing that there was
no evident to support the extension of the
freeze order. The further argued that the
extension not only deprived them of their
property without due process; it also punished
them before their guilt could be proven. –
Denied by CA.
7. MEANWHILE, the Rule in Civil Forfeiture Cases
took effect. Under this rule, a freeze order could be
extended for a maximum period of six months.
8. Ligots then filed a MR insisting that the freeze
order should be lifted considering:
a. No predicate crime has been proven to support
the freeze order’s issuance.
b. The freeze order expired 6 months after it was
issued.
c. The freeze order is provisional in character and
not intended to supplant a case for money
laundering.
9. CA denied. Hence, this Petition by the Ligots.
Ligot argues that the CA erred when it extended the
freeze order issued against him and his family even
though no predicate crime had been proven or
established to support the allegation of money
laundering. He also maintains that the freeze order
ceased to be effective in view of the 6-month
entension limit of freeze orders provided under the
Rule in Civil Forfeiture Cases. The CA, in extending
the dreeze order, not only unduly deprived him and
his family of their property, in violation of due
process, but also penalized them before they had
been convicted of the crimes they stand accused of.
10. In opposition, the Republic claims that the CA
can issue a freeze order upon a determination that
probable cause exists, showing that the monetary
instruments or properties subject of the freeze
order are related to the unlawful activity
enumerated in RA No. 9160. Contrary to the
petitioners’ claims, it is not necessary that a formal
criminal charge must have been previously filed
against them before the freeze order can be issued.
ISSUE
1. Was there probable cause the issue freeze order? –
YES
2. was the extension valid? – NO
HELD
1. The legal basis for the issuance of a freeze order is
Section 10 of RA No. 9160, as amended by RA No. 9194,
which states that the Court of
Appeals, upon application ex parte by the AMLC and
after determination that probable cause exists that any
monetary instrument or property is in any way related
to an unlawful activity as defined in
Section 3(i) hereof, may issue a freeze order which shall
be effective immediately. The freeze order shall be for a
period of twenty (20) days unless extended by the
court.
2. The Ligots claim that the CA erred in extending the
effectivity period of the freeze order against them,
given that they have not yet been convicted of
committing any of the offenses enumerated under RA
No. 9160 that would support the AMLC’s accusation of
money laundering activity. We do not see any merit in
this claim. The Ligots’ argument is founded on a flawed
understanding of probable cause in the context of a civil
forfeiture proceeding or freeze order application. Based
on Section 10 quoted above, there are only two
requisites for the issuance of a freeze order: (1) the
application ex parte by the AMLC and (2) the
determination of probable cause by the CA. The
probable cause required for the issuance of a freeze
order differs from the probable cause required for the
institution of a criminal action, and the latter was not an
issue before the CA nor is it an issue before us in this
case.
3. As defined in the law, the probable cause required for
the issuance of a freeze order refers to “such facts and
circumstances which would lead a reasonably discreet,
prudent or cautious man to believe that an unlawful
activity and/or a money laundering offense is about to
be, is being or has been committed and that the
account or any monetary instrument or property
subject thereof sought to be frozen is in any way related
to said unlawful activity and/or money laundering
offense.
4. In other words, in resolving the issue of whether
probable cause exists, the CA’s statutorily-guided
determination’s focus is not on the probable
commission of an unlawful activity (or money
laundering) that the Office of the Ombudsman has
already determined to exist, but on whether the bank
accounts, assets, or other monetary instruments sought
to be frozen are in any way related to any of the illegal
activities enumerated under RA 9160, as amended.
Otherwise stated, probable cause refers to the
sufficiency of the relation between an unlawful activity
and the property or monetary instrument which is the
focal point of Sec. 10 of RA 9160, as amended.
1. A freeze order is an extraordinary and interim relief
issued by the CA to prevent the dissipation, removal, or
disposal of properties that are suspected to be the
proceeds of, related to, unlawful activities. Its primary
objective is to temporarily preserve monetary
instruments or property that are in any way related to
an unlawful activity or money laundering by preventing
the owner from utilizing them during the duration of
the freeze order.
2. The AMLA is silent on the maximum period of time
that the freeze order can be extended by the CA. The
final sentence of Section 10 of the Anti-Money
Laundering Act of 2001 provides, “the freeze order shall
be for a period of twenty (20) days unless extended by
the court.” In contrast, Section 55 of the Rule in Civil
Forfeiture Cases qualifies the grant of extension “for a
period not exceeding six months” “for good cause”
shown.
3. The silence of the law, however, does not affect the
Court’s own power under the Constitution to
“promulgate rules concerning the protection and
enforcement of constitutional rights xxx and procedure
in all courts.” Pursuant to this power, the Court issued
A.M. No. 05-11-04-
SC, limiting the effectivity of an extended freeze order
to six months―to otherwise leave the grant of the
extension to the sole discretion of the CA, which may
extend a freeze order indefinitely or to an
unreasonable amount of time―carries serious
implications on an individual’s substantive right to due
process.
4. In this case, the law has left to the CA the authority to
resolve the issue of extending the freeze order. Without
a doubt, the CA followed the law to the letter, but it did
so by avoiding the fundamental law’s command under
Sec. 1, Art. III. This command sought to implement the
Rule in Civil Forfeiture Cases which the CA erroneously
applied.
5. The CA extended the freeze order “until after all the
appropriate proceedings and/or investigations being
conducted are terminated.” This effectively bars the
Ligots from using any of the property covered by the
freeze order until after an eventual civil forfeiture
proceeding is concluded in their favor and after they
shall have been adjudged not guilty of the crimes they
are suspected of committing. These periods of
extension are way beyond the intent and purposes of a
freeze order which is intended solely as an interim
relief.
6. The freeze order has been in effect since 2005 which
the civil forfeiture case was filed only in 2012. This
means that the Ligots have not been able to access the
properties subject of the freeze order for 6 years or so
simply on the basis of the existence of probable cause
to issue a freeze order, which was intended mainly as
an interim pre-emptive remedy.
7. As correctly noted by the petitioners, a freeze order is
meant to have a temporary effect; it was never
intended to supplant or replace the actual forfeiture
cases where the provisional remedy―which means, the
remedy is an adjunct of or an incident to the main
action―of asking for the issuance of an asset
preservation order from the court where the petition is
filed is precisely available. For emphasis, a freeze order
is both a preservatory and preemptive remedy.
8. The 6-month extension period is ordinarily sufficient
for the government to act against the suspected money
launderer and to file the appropriate forfeiture case
against him, and is a reasonable period as well that
recognizes the property owner’s right to due process. In
this case, the period of inaction of 6 years already
exceeded what is reasonable.
9. The continued extension beyond 6 months violated
the Ligots’ right to due process.
Subido vs CA, GR 216914, Dec. 6, 2016
Facts
Challenged in this petition for certiorari and prohibition
under Rule 65 of the Rules of Court is the
constitutionality of Section 11 of R.A No. 9160, the Anti-
Money Laundering Act, as amended, specifically the
Anti-Money Laundering Council's authority to file with
the Court of Appeals (CA) in this case, an ex-parte
application for inquiry into certain bank deposits and
investments, including related accounts based on
probable cause.
In 2015, a year before the 2016 presidential elections,
reports abounded on the supposed disproportionate
wealth of then Vice President Jejomar Binay and the
rest of his family, some of whom were likewise elected
public officers. The Office of the Ombudsman and the
Senate conducted investigations and inquiries thereon.
From various news reports announcing the inquiry into
then Vice President Binay's bank accounts, including
accounts of members of his family, petitioner Subido
Pagente Certeza Mendoza & Binay Law Firm (SPCMB)
was most concerned with the article published in the
Manila Times on 25 February 2015 entitled "Inspect
Binay Bank Accounts" which read, in pertinent part:
xxx The Anti-Money Laundering Council (AMLC) asked
the Court of Appeals (CA) to allow the [C]ouncil to peek
into the bank accounts of the Binays, their corporations,
and a law office where a family member was once a
partner.
xx xx
Also the bank accounts of the law office linked to the
family, the Subido Pagente Certeza Mendoza & Binay
Law Firm, where the Vice President's daughter Abigail
was a former partner.
By 8 March 2015, the Manila Times published another
article entitled, "CA orders probe of Binay 's assets"
reporting that the appellate court had issued a
Resolution granting the ex-parte application of the
AMLC to examine the bank accounts of SPCMB.
Forestalled in the CA thus alleging that it had no
ordinary, plain, speedy, and adequate remedy to
protect its rights and interests in the purported ongoing
unconstitutional examination of its bank accounts by
public respondent Anti-Money Laundering Council
(AMLC), SPCMB undertook direct resort to this Court via
this petition for certiorari and prohibition on the
following grounds that the he Anti-Money Laundering
Act is unconstitutional insofar as it allows the
examination of a bank account without any notice to
the affected party: (1) It violates the person's right to
due process; and (2) It violates the person's right to
privacy.
Issues:
Whether Section 11 of R.A No. 9160 violates substantial
due process.
Whether Section 11 of R.A No. 9160 violates procedural
due process.
Whether Section 11 of R.A No. 9160 is violative of the
constitutional right to privacy enshrined in Section 2,
Article III of the Constitution.
Rulings
1. No. We do not subscribe to SPCMB' s position.
Succinctly, Section 11 of the AMLA providing for ex-
parte application and inquiry by the AMLC into certain
bank deposits and investments does not violate
substantive due process, there being no physical seizure
of property involved at that stage.
In fact, .Eugenio delineates a bank inquiry order under
Section 11 from a freeze order under Section 10 on both
remedies' effect on the direct objects, i.e. the bank
deposits and investments:
On the other hand, a bank inquiry order under Section
11 does not necessitate any form of physical seizure of
property of the account holder. What the bank inquiry
order authorizes is the examination of the particular
deposits or investments in banking institutions or non-
bank financial institutions. The monetary instruments or
property deposited with such banks or financial
institutions are not seized in a physical sense, but are
examined on particular details such as the account
holder's record of deposits and transactions. Unlike the
assets subject of the freeze order, the records to be
inspected under a bank inquiry order cannot be
physically seized or hidden by the account holder. Said
records are in the possession of the bank and therefore
cannot be destroyed at the instance of the account
holder alone as that would require the extraordinary
cooperation and devotion of the bank.
At the stage in which the petition was filed before us,
the inquiry into certain bank deposits and investments
by the AMLC still does not contemplate any form of
physical seizure of the targeted corporeal property.
2. No. The AMLC functions solely as an investigative
body in the instances mentioned in Rule 5.b.26
Thereafter, the next step is for the AMLC to file a
Complaint with either the DOJ or the Ombudsman
pursuant to Rule 6b. Even in the case of Estrada v.
Office of the Ombudsman, where the conflict arose at
the preliminary investigation stage by the Ombudsman,
we ruled that the Ombudsman's denial of Senator
Estrada's Request to be furnished copies of the counter-
affidavits of his co-respondents did not violate Estrada's
constitutional right to due process where the sole issue
is the existence of probable cause for the purpose of
determining whether an information should be filed and
does not prevent Estrada from requesting a copy of the
counter-affidavits of his co-respondents during the pre-
trial or even during trial.

Plainly, the AMLC's investigation of money laundering
offenses and its determination of possible money
laundering offenses, specifically its inquiry into certain
bank accounts allowed by court order, does not
transform it into an investigative body exercising quasi-
judicial powers. Hence, Section 11 of the AMLA,
authorizing a bank inquiry court order, cannot be said to
violate SPCMB's constitutional right to due process.
3. No. We now come to a determination of whether
Section 11 is violative of the constitutional right to
privacy enshrined in Section 2, Article III of the
Constitution. SPCMB is adamant that the CA's denial of
its request to be furnished copies of AMLC's ex-parte
application for a bank inquiry order and all subsequent
pleadings, documents and orders filed and issued in
relation thereto, constitutes grave abuse of discretion
where the purported blanket authority under Section
11: ( 1) partakes of a general warrant intended to aid a
mere fishing expedition; (2) violates the attorney-client
privilege; (3) is not preceded by predicate crime
charging SPCMB of a money laundering offense; and ( 4)
is a form of political harassment [of SPCMB' s] clientele.
We thus subjected Section 11 of the AMLA to
heightened scrutiny and found nothing arbitrary in the
allowance and authorization to AMLC to undertake an
inquiry into certain bank accounts or deposits. Instead,
we found that it provides safeguards before a bank
inquiry order is issued, ensuring adherence to the
general state policy of preserving the absolutely
confidential nature of Philippine bank accounts:
The AMLC is required to establish probable cause as
basis for its ex-parte application for bank inquiry order;
The CA, independent of the AMLC's demonstration of
probable cause, itself makes a finding of probable cause
that the deposits or investments are related to an
unlawful activity under Section 3(i) or a money
laundering offense under Section 4 of the AMLA;
A bank inquiry court order ex-parte for related accounts
is preceded by a bank inquiry court order ex-parte for
the principal account which court order ex-parte for
related accounts is separately based on probable cause
that such related account is materially linked to the
principal account inquired into; and
The authority to inquire into or examine the main or
principal account and the related accounts shall comply
with the requirements of Article III, Sections 2 and 3 of
the Constitution. The foregoing demonstrates that the
inquiry and examination into the bank account are not
undertaken whimsically and solely based on the
investigative discretion of the AMLC. In particular, the
requirement of demonstration by the AMLC, and
determination by the CA, of probable cause emphasizes
the limits of such governmental action. We will revert to
these safeguards under Section 11 as we specifically
discuss the CA' s denial of SPCMB' s letter request for
information concerning the purported issuance of a
bank inquiry order involving its accounts.
All told, we affirm the constitutionality of Section 11 of
the AMLA allowing the ex-parte application by the
AMLC for authority to inquire into, and examine, certain
bank deposits and investments.
WHEREFORE, the petition is DENIED. Section 11 of
Republic Act No. 9160, as amended, is declared VALID
and CONSTITUTIONAL.
n. Authority of AMLC to inquire into and
examine bank deposits (RA 10167)
SEC. 2. Section 11 of the same Act is hereby
amended to read as follows:
“SEC. 11. Authority to Inquire into Bank Deposits. –
Notwithstanding the provisions of Republic Act No.
1405, as amended; Republic Act No. 6426, as
amended; Republic Act No. 8791; and other laws,
the AMLC may inquire into or examine any
particular deposit or investment, including related
accounts, with any banking institution or non-bank
financial institution upon order of any competent
court based on an ex parte application in cases of
violations of this Act, when it has been established
that there is probable cause that the deposits or
investments, including related accounts involved,
are related to an unlawful activity as defined in
Section 3(i) hereof or a money laundering offense
under Section 4 hereof; except that no court order
shall be required in cases involving activities defined
in Section 3(i)(1), (2), and (12) hereof, and felonies
or offenses of a nature similar to those mentioned
in Section 3(i)(1), (2), and (12), which are Punishable
under the penal laws of other countries, and
terrorism and conspiracy to commit terrorism as
defined and penalized under Republic Act No.
9372.”
“The Court of Appeals shall act on the application to
inquire into or examine any deposit or investment
with any banking institution or non-bank financial
institution within twenty-four (24) hours from filing
of the application.”
 “To ensure compliance with this Act, the Bangko
Sentral ng Pilipinas may, in the course of a periodic
or special examination, check the compliance of a
Covered institution with the requirements of the
AMLA and its implementing rules and regulations.”
“For purposes of this section, ‘related accounts’
shall refer to accounts, the funds and sources of
which originated from and/or are materially linked
to the monetary instrument(s) or property(ies)
subject of the freeze order(s).”
“A court order ex parte must first be obtained
before the AMLC can inquire into these related
Accounts: Provided, That the procedure for the ex
parte application of the ex parte court order for the
principal account shall be the same with that of the
related accounts.”
“The authority to inquire into or examine the main
account and the related accounts shall comply with
the requirements of Article III, Sections 2 and 3 of
the 1987 Constitution, which are hereby
incorporated by reference.”
1. When court order required, not
required
COURT ORDER REQUIRED WHEN:
In cases of violation of RA 9160 when it has
been established that there is probable cause
that the deposits or investments are related to
(1) unlawful activity; (2) money laundering
offense.
NO COURT ORDER WHEN:
1. Kidnapping for ransom
2. Comprehensive Dangreous Drugs Act
3. Hijacking
4. Felonies similar to section 3(i)(1), (2) and
(12)
5. Terrorism
Read:
Republic v. Eugenio, GR 174629, Feb. 14, 2008
Estrada vs Sandiganbayan
Republic vs Bolante, GR 186717, April 17, 2017
o. Asset Forfeiture (See also 2021 Revised
IRR)
2018
RULE 12 – ASSET FORFEITURE
Section 1. General Rules on Asset Forfeiture.
The following rules shall be observed in asset
forfeiture proceedings:
(a) No prior criminal charge, pendency of a case, or
conviction for an unlawful activity or ML offense is
necessary for the commencement or the resolution
of a petition for civil forfeiture.
(b) No asset shall be attached or forfeited to the
prejudice of a candidate for an electoral office
during an election period.
2021
“Rule 12 - ASSET FORFEITURE
Section 1. General Rules on Asset Forfeiture.
The following rules shall be observed in asset
forfeiture proceedings:
(a) xxx
(c) No court shall issue a temporary restraining
order or a writ of injunction
against any provisional asset preservation order or
asset preservation order,
except the Court of Appeals or the Supreme Court.”
RA 10365
SEC. 9. Section 12 of the same Act is hereby
amended to read as follows:
“(a) Civil Forfeiture. – Upon determination by the
AMLC that probable cause exists that any monetary
instrument or property is in any way related to an
unlawful activity as defined in Section 3(i) or a
money laundering offense under Section 4 hereof,
the AMLC shall file with the appropriate court
through the Office of the Solicitor General, a
verified ex parte petition for forfeiture, and the
Rules of Court on Civil Forfeiture shall apply.
“The forfeiture shall include those other monetary
instrument or property having an equivalent value
to that of the monetary instrument or property
found to be related in any way to an unlawful
activity or a money laundering offense, when with
due diligence, the former cannot be located, or it
has been substantially altered, destroyed,
diminished in value or otherwise rendered
worthless by any act or omission, or it has been
concealed, removed, converted, or otherwise
transferred, or it is located outside the Philippines
or has been placed or brought outside the
jurisdiction of the court, or it has been commingled
with other monetary instrument or property
belonging to either the offender himself or a third
person or entity, thereby rendering the same
difficult to identify or be segregated for purposes of
forfeiture.
“(b) Claim on Forfeited Assets. – Where the court
has issued an order of forfeiture of the monetary
instrument or property in a criminal prosecution for
any money laundering offense defined under
Section 4 of this Act, the offender or any other
person claiming an interest therein may apply, by
verified petition, for a declaration that the same
legitimately belongs to him and for segregation or
exclusion of the monetary instrument or property
corresponding thereto. The verified petition shall be
filed with the court which rendered the judgment of
forfeiture, within fifteen (15) days from the date of
the finality of the order of forfeiture, in default of
which the said order shall become final and
executor. This provision shall apply in both civil and
criminal forfeiture.
“(c) Payment in Lieu of Forfeiture. – Where the
court has issued an order of forfeiture of the
monetary instrument or property subject of a
money laundering offense defined under Section 4,
and said order cannot be enforced because any
particular monetary instrument or property cannot,
with due diligence, be located, or it has been
substantially altered, destroyed, diminished in value
or otherwise rendered worthless by any act or
omission, directly or indirectly, attributable to the
offender, or it has been concealed, removed,
converted, or otherwise transferred to prevent the
same from being found or to avoid forfeiture
thereof, or it is located outside the Philippines or
has been placed or brought outside the jurisdiction
of the court, or it has been commingled with other
monetary instruments or property belonging to
either the offender himself or a third person or
entity, thereby rendering the same difficult to
identify or be segregated for purposes of forfeiture,
the court may, instead of enforcing the order of
forfeiture of the monetary instrument or property
or part thereof or interest therein, accordingly
order the convicted offender to pay an amount
equal to the value of said monetary instrument or
property. This provision shall apply in both civil and
criminal forfeiture.”
p. Prohibited accounts
2018 IRR
Section 1. Anonymous Accounts and Accounts
under Fictitious Names.
1.1. Covered persons shall maintain customers’
account only in the true and full name of the
account owner or holder.
1.2. Anonymous accounts, accounts under fictitious
names, and all other similar accounts shall be
absolutely prohibited.
Section 2. Numbered Accounts.
2.1. Numbered accounts, except non-checking
numbered accounts, shall not be allowed.
Page 56 of 94
2.2. CTRs and STRs involving non-checking
numbered accounts shall contain the true name of
the account holder.
Section 3. Annual Testing to Determine True
Identity of Accounts.
The SAs may conduct annual testing for the sole
purpose of determining the existence and true
identity of the foregoing accounts, if any.
q. Extradition
RA 9160
(g) Extradition. — The Philippines shall negotiate for
the inclusion of money laundering offenses as
herein defined among extraditable offenses in all
future treaties.
r. Mutual assistance among states
RA 9160
SEC. 13. Mutual Assistance among States.
(a) Request for Assistance from a Foreign State. —
Where a foreign State makes a request for
assistance in the investigation or prosecution of a
money laundering offense, the AMLC may execute
the request or refuse to execute the same and
inform the foreign State of any valid reason for not
executing the request or for delaying the execution
thereof. The principles of mutuality and reciprocity
shall, for this purpose, be at all times recognized.
(b) Powers of the AMLC to Act on a Request for
Assistance from a Foreign State. — The AMLC may
execute a request for assistance from a foreign
State by: (1) tracking down, freezing, restraining
and seizing assets alleged to be proceeds of any
unlawful activity under the procedures laid down in
this Act; (2) giving information needed by the
foreign State within the procedures laid down in
this Act; and (3) applying for an order of forfeiture
of any monetary instrument or property in the
court: Provided, That the court shall not issue such
an order unless the application is accompanied by
an authenticated copy of the order of a court in the
requesting State ordering the forfeiture of said
monetary instrument or property of a person who
has been convicted of a money laundering offense
in the requesting State, and a certification or an
affidavit of a competent officer of the requesting
State stating that the conviction and the order of
forfeiture are final and that no further appeal lies in
respect of either.
(c) Obtaining Assistance from Foreign States. — The
AMLC may make a request to any foreign State for
assistance in (1) tracking down, freezing, restraining
and seizing assets alleged to be proceeds of any
unlawful activity; (2) obtaining information that it
needs relating to any covered transaction, money
laundering offense or any other matter directly or
indirectly related thereto; (3) to the extent allowed
by the law of the foreign State, applying with the
proper court therein for an order to enter any
premises belonging to or in the possession or
control of, any or all of the persons named in said
request, and/or search any or all such persons
named therein and/or remove any document,
material or object named in said request: Provided,
That the documents accompanying the request in
support of the application have been duly
authenticated in accordance with the applicable law
or regulation of the foreign State; and (4) applying
for an order of forfeiture of any monetary
instrument or property in the proper court in the
foreign State: Provided, That the request is
accompanied by an authenticated copy of the order
of the regional trial court ordering the forfeiture of
said monetary instrument or property of a
convicted offender and an affidavit of the clerk of
court stating that the conviction and the order of
forfeiture are final and that no further appeal lies in
respect of either.
(d) Limitations on Request for Mutual Assistance. —
The AMLC may refuse to comply with any request
for assistance where the action sought by the
request contravenes any provision of the
Constitution or the execution of a request is likely to
prejudice the national interest of the Philippines
unless there is a treaty between the Philippines and
the requesting State relating to the provision of
assistance in relation to money laundering offenses.
(e) Requirements for Requests for Mutual
Assistance from Foreign States. — A request for
mutual assistance from a foreign State must (1)
confirm that an investigation or prosecution is being
conducted in respect of a money launderer named
therein or that he has been convicted of any money
laundering offense; (2) state the grounds on which
any person is being investigated or prosecuted for
money laundering or the details of his conviction;
(3) give sufficient particulars as to the identity of
said person; (4) give particulars sufficient to identify
any covered institution believed to have any
information, document, material or object which
may be of assistance to the investigation or
prosecution; (5) ask from the covered institution
concerned any information, document, material or
object which may be of assistance to the
investigation or prosecution; (6) specify the manner
in which and to whom said information, document,
material or object obtained pursuant to said
request, is to be produced; (7) give all the
particulars necessary for the issuance by the court
in the requested State of the writs, orders or
processes needed by the requesting State; and (8)
contain such other information as may assist in the
execution of the request.
(f) Authentication of Documents. — For purposes of
this Section, a document is authenticated if the
same is signed or certified by a judge, magistrate or
equivalent officer in or of, the requesting State, and
authenticated by the oath or affirmation of a
witness or sealed with an official or public seal of a
minister, secretary of State, or officer in or of, the
government of the requesting State, or of the
person administering the government or a
department of the requesting territory,
protectorate or colony. The certificate of
authentication may also be made by a secretary of
the embassy or legation, consul general, consul,
vice consul, consular agent or any officer in the
foreign service of the Philippines stationed in the
foreign State in which the record is kept, and
authenticated by the seal of his office.

(g) Extradition. — The Philippines shall negotiate for

the inclusion of money laundering offenses as
herein defined among extraditable offenses in all
future treaties.