STOLEN ASSET RECOVERY

presented by

EFFORTS IN THE PHILIPPINES
JULIA C. BACAY-ABAD
Deputy Director Head, Legal Services Group Anti-Money Laundering Council Secretariat

UN Convention against Corruption (UNCAC)
9  December  2003  –  Philippines  signed   8  November  2006  –  Philippines  ra<fied  
 

Entry  into  Force:    14  December  2005  
 

UNCAC
Legal  Architecture:   •  Preven<on          -­‐  establishment  of  an<-­‐corrup<on  bodies  
   -­‐  establishment  of  Financial  Intelligence   Units  (FIUs)  

•  Criminaliza<on   •  Interna<onal  Coopera<on   •  Asset  Recovery  

 

Asset Recovery under the UNCAC

-­‐  The  return  of  assets  pursuant  to   Chapter  51  is  a  fundamental  principle   of  UNCAC;  
 

-­‐  States  par<es  shall  afford  one  another   the  widest  measure  of  coopera<on   and  assistance  in  that  regard.  

  UNCAC  
Art.  31.    Freezing,  seizure  and  confisca<on  

“1.  Each  state  party  shall  take,  to  the  greatest   extent  possible  within  its  domes<c  legal  system,   such  measures  as  may  be  necessary  to  enable   confisca<on  of:   (a) Proceeds  of  crime  derived  from  offenses   established  in  accordance  with  UNCAC;   (b) Property,  equipment  or  other  instrumentali<es   used  in  or  des<ned  for  use  in  offences  established   in  accordance  with  UNCAC  

 

 

 

Art. 31, UNCAC…
“2.  Each  State  Party  shall  take  such   measures  as  may  be  necessary  to   enable  the  iden<fica<on,  tracing,   freezing  or  seizure  of  any  item   referred  to  in  par.  1  (Ar<cle  31)  for   the  purpose  of  eventual   confisca<on.”    

Asset Recovery Statutes in the Philippines Republic  Act  No.  1379  –  Forfeiture  of   Unexplained  Wealth  of  gov’t   officials  and  employees  
 

Republic  Act  No.  9160  –  An<-­‐Money   Laundering  Act  of  2001,  as  amended  

R.A. 1379
“An  Act  Declaring  Forfeiture  in  Favor  of  the  State   of  Any  Property  Found  to  Have  Been   Unlawfully  Acquired  by  Any  Public  Officer  or   Employee  and  Providing  for  the  Proceedings   Therefor”   •  Enacted  on  18  June  1955  
 

•  Introduced  the  first  civil  forfeiture  statute  
 

•  Office  of  the  Ombudsman  prosecutes  
 

 

R.A.  9160  
-­‐      The  “An<-­‐Money    Laundering  Act    (AMLA)  of  2001”    
 

-­‐  took  effect  on  17  October  2001  
   
 

 

 

R.A. 9160, as amended
5  March  2003  -­‐  R.A.  9160  was  amended   by  R.A.  9194     7  September  2003  -­‐  Revised   Implemen<ng  Rules  and  Regula<ons   (RIRRs)  took  effect.  

Salient Features of R.A. 9160, as amended
•  Criminalized  money  laundering  in  the   Philippines   •  Created  the  Philippines’  FIU  (AMLC)   •  Introduced  civil  forfeiture  without  the   necessity  of  convic<on  or  prosecu<on   in  a  criminal  case  

Relevant Terms

Money  Laundering  –  
 is  a  crime  whereby  the  proceeds  of  an   unlawful  ac<vity  as  defined  in  the   AMLA  are  transacted  thereby  making   them  appear  to  have  originated  from   legi<mate  sources  (Sec.  4,  AMLA,  as   amended)    

Unlawful Activity under the AMLA--­‐-­‐  is  any  act  or  omission  or  a  series  or   combina/on  thereof  involving  or   having  direct  rela/on  to  any  of  the   following  offenses:      1.  Kidnapping  for  ransom      2.  Drug  trafficking  and            other  viola<ons  of  the        Comprehensive          Dangerous  Drugs  Act  of      2002    

Unlawful activity…
3.    Graf  and  Corrup<on  under  R.A.                    No.  3019,  as  amended   4.    Plunder  (R.A.  7080,  as                    amended)   5.  Robbery  and  Extor<on   6.    Jueteng  and  Masiao  (P.D.  1602)   7.    Piracy  (RPC  &  PD  532)   8.    Qualified  Thef  under  Art.  310,    RPC  

 

Unlawful activity…
9.        Swindling  under  Art.  315,  RPC  
 

10.  Smuggling  under  RA  455  &  1937  
 

11.  Viola<ons  of  the  Electronic      Commerce  Act  of  2000  
 

12.  Hijacking,  destruc<ve  arson  and      murder,  including  those      perpetrated  by  terrorists      against  non-­‐combatant  persons      and  similar  targets  

Unlawful activity…
13.      
 

 Fraudulent  prac<ces  and  other    viola<ons  of  the  Securi<es    Regula<on  Code  of  2000    (RA  8799)  

14.  Felonies  or  offenses  of  a  similar      nature  that  are  punishable    under   the  penal  laws  of  other    countries  

 

Civil Forfeiture under the AMLA, as amended
 Sec.  7.    Crea<on  of  An<-­‐Money  Laundering  Council.  
–  x  x  x.  The  AMLC  shall  act  unanimously  in  the   discharge  of  its  func<ons  as  defined  hereunder:  
x  x  x          x  x  x            x  x  x   (3)  to  ins<tute  civil  forfeiture  proceedings  and  all  other  remedial   proceedings  through  the  Office  of  the  Solicitor  General;   x  x  x          x  x  x          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   proceeds  of  any  unlawful  ac<vity  as  defined  in  Sec<on  3(i)  of   the  AMLA  
 

  Sec.  12.    Forfeiture  Provisions.  –  

Sec<on  12  of  the  AMLA,  as  amended  

 

          (a)   Civil   Forfeiture.   –   When   there   is   a   covered   transac<on   report   made,   and   the   court  has,  in  a  pe<<on  filed  for  the  purpose   ordered  seizure  of  any  monetary  instrument   or   property,   in   whole   or   in   part,   directly   or   indirectly,   related   to   said   report,   the   Revised   Rules   of   Court   on   civil   forfeiture   shall  apply.  

 

Supreme Court action
January  2005  -­‐    upon  the  request  of  the  An<-­‐ Money  Laundering  Council,  the  Supreme   Court  tasked  the  Commikee  on  the   Revision  of  the  Rules  of  Court  chaired  by   Jus<ce  Reynato  S.  Puno  to  draf  the  Rule   of  Procedure  in  Cases  of  Civil  Forfeiture.  

•  15  November  2005  -­‐    the  Supreme  Court  adopted   the  Rule  prescribing  the  procedure  in  cases  of  civil   forfeiture.     •  A.M.  No.  05-­‐11-­‐04-­‐SC,  otherwise  known  as  “Rule   of  Procedure  in  Cases  of  Civil  Forfeiture,  Asset   Preserva/on,  and  Freezing  of  Monetary   Instrument,  Property,  or  Proceeds  Represen/ng,   Involving,  or  Rela/ng  to  an  Unlawful  Ac/vity  or   Money  Laundering  Offense  under  R.A.  No.  9160,  as   Amended”         •  15  December  2005  -­‐    effec/vity  of  the  Rule,   following  its  publica/on  in  a  newspaper  of  general   circula/on.  

Rule on Civil Forfeiture

2  Parts  
 

1.  Pe<<on  for  Civil  Forfeiture   2.  Pe<<on  for  Freeze  Order  

Definition
 Civil  forfeiture  may  be  defined  as  the  seizure   and  confisca<on  of  any  monetary  instrument   or  property,  in  whole  or  in  part,  directly  or   indirectly,  involved  in  or  related  to  an  unlawful   ac<vity  under  Sec<on  3(i)  or  a  money   laundering  offense  under  Sec<on  4,  Republic   Act  No.  9160,  as  amended.    

Assets that may be forfeited
Any  monetary  instrument,  property,   or  proceeds  represen<ng,  involving,   or  rela<ng  to  an  unlawful  ac<vity  or   a  money  laundering  offense  under   R.A.  9160,  as  amended.  (Sec.  1)    

Petition for Civil Forfeiture
Sec.  2.    Party  to  ins<tute  proceedings.       •  Ac<on  in  the  name  of  the  Republic  of  the   Philippines  (RP)   •  Represented  by  the  An<-­‐Money  Laundering   Council  (AMLC)   •  Through  the  Office  of  the  Solicitor  General   (OSG)    

Venue of Civil Forfeiture
Sec.  3.    A  pe11on  for  civil  forfeiture  shall  be   filed:   i)  in  any  RTC  of  the  judicial  region  where  the   monetary  instrument,  property,  or   proceeds  are  located;  
 

ii)  if  all  or  any  por/on  of  the  monetary   instrument,  property,  or  proceeds  is   located  outside  the  Philippines,  the  pe//on   may  be  filed  in  the  RTC  in  Manila  or  of  the   judicial  region  where  any  por/on  of  the   monetary  instrument,  property,  etc.  is   located,  at  the  op<on  of  the  pe<<oner.    

Provisional Remedies
Sec.  11.    Ex-­‐parte  issuance  of  Provisional    Asset   Preserva<on  Order  (PAPO)  
 

-­‐ PAPO   is   issued   upon   determina<on   of   probable   cause   that   the   monetary   instrument   or   property   is  related  to  an  unlawful  ac<vity;   -­‐   based  on  the  allega<ons  of  the  verified  pe<<on;   -­‐    effec<ve  immediately  for  20  days  (from  date  of   service  to  respondents)  

Provisional Asset Preservation Order (PAPO)
-­‐   Court   order   forbidding   any   transac<on,   withdrawal,   deposit,   transfer,   removal,   conversion,   concealment   or   other   disposi<on   of   the   subject   monetary   instrument,  property  or  proceeds  

Asset Preservation Order (APO)
 -­‐  within  the  20-­‐day  period  of  PAPO,   summary  hearing  shall  be  conducted;   -­‐    Respondent  may  show  good  cause   why  PAPO  should  be  lifed;   -­‐    Court  may  modify  or  lif  PAPO;   otherwise,  shall  issue  APO.  

Order of Trial
Pre-­‐Trial  (Mandatory)     Trial     Judgment  (Order  of  Forfeiture)     (Appeal)  

Important!  
  No  prior  criminal  charge,  pendency  of,  or   convic<on  for  an  unlawful  ac<vity  or   money  laundering  offense  is  necessary   for  the  commencement  or  the  resolu<on   of  a  pe<<on  for  civil  forfeiture.   (Sec.  27)  

Judgment
Sec.  32.    The  court  shall  render   judgment  within  thirty  (30)  days  from   submission  of  the  case  for  resolu<on.     -­‐    Preponderance  of  evidence  

Claims against forfeited assets
•  Within  15  days  from  date  of  finality  of   order  of  forfeiture  
 

•  Any  party  who  has  not  been  impleaded   nor  intervened,  claiming  an  interest  in  the   property   •  Shall  file  verified  pe<<on  for  declara/on   that  the  property  legi/mately  belongs  to   him   •  Otherwise,  order  of  forfeiture  becomes   executory  

Petition for Freeze Order
Sec.  44.   -­‐  Verified  pe<<on;  in  the  name  of   RP,  rep.  by  AMLC;  thru  OSG  
 

-­‐  Filed  before  the  Court  of  Appeals  
 

-­‐  Ex  parte    

Action by the Court of Appeals

-­‐  Within  24  hours  afer  filing;  
 

-­‐  Issue  freeze  order  upon   determina<on  of  probable  cause,   based  on  allega<ons  of  the  pe<<on,   that  the  property  or  proceeds  are  in   any  way  related  to  an  unlawful   ac<vity.  

Freeze order
•  Effec<ve  immediately  for  20  days  
 

•  On  mo<on  by  the  AMLC,  may  be   extended  for  a  period  not  exceeding   six  (6)  months  

SC Ruling
M/Gen.  Carlos  Garcia  vs.  CA,   G.R.  No.  165800;  27  Nov.  2007  
 

 

 “Nothing  in  RA  9160  requires  that  a  case   for  viola/on  of  an/-­‐money  laundering  laws   must  be  filed  before  the  issuance  of  a  freeze   order.  X  x  x.  There  are  only  two  requisites   under  the  law  for  the  issuance  of  the  freeze   order:  (1)  the  applica/on  ex  parte  by  the   AMLC;  and  (2)  the  determina/on  of  probable   cause  by  the  CA.”  

SC Ruling
Republic  vs.  Glasgow  Credit  &  Collec<on  Services,   Inc.,  et  al.   G.R.  No.  170281;  18  Jan.  2008  
 

 

x.  As  an  ac/on  in  rem,  it  is  a  proceeding  against   the  thing  itself  instead  of  against  the  person.    In   ac/ons  in  rem  or  quasi  in  rem,  jurisdic/on  over  the   person  of  the  defendant  is  not  a  prerequisite  to   conferring  jurisdic/on  on  the  court,  provided  that   the  court  acquires  jurisdic/on  over  the  res.  x  x  x.”    

 “Forfeiture  proceedings  are  ac/ons  in  rem.  x  x  

   

AMLC  Sta<s<cs  
As  of  February  2012    

Civil Forfeiture Cases
No.  of  Cases   Amount  Involved  

Pending  trial  in  court     Decided  Cases   •     Proceeds  turned  over  to  
     the  Na<onal  Treasury   •   Claimed  by  Third-­‐Par<es   •   For  Execu<on  

41   12        

P  1,241,209,029.93   (approx.)     P  249,406,231.45     (P  109,428,008.46)     (P        2,401,568.50)   (P  137,576,654.49)  

Corruption-related Civil Forfeiture Cases
Unlawful   Ac<vity   Decided  by  RTC   Amount  Involved   Pending   Trial   Amount   Involved  

  Plunder  
 

  1     2  

  P  89.76  M     P  8.5  M  

  2     1  

 
 

P  408.26  M  
P  512,837.46  

Graf  &   Corrup<on  

1  pending  appeal)    

 (1  pending  MR;    

Challenges in Asset Recovery -­‐  Lack  of  Asset  Management   Regime  in  the  Philippines     -­‐  Adversarial  proceedings  in   applica<on  for  bank  inquiry  

   

Thank  you!  
E-­‐mail  Julia  Bacay  Abad     jbacay-­‐abad@bsp.gov.ph

 

 

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