Facts: The case involves an extensive investigation and legal actions initiated by the Republic of the Philippines, represented by the Anti-Money Laundering Council (AMLC), against Roberto V. Ongpin and numerous individuals and corporations, including former officers of the Development Bank of the Philippines (DBP), related to alleged money laundering activities involving substantial loans from the DBP and subsequent transactions involving shares of stock in Philex Mining Corporation. The AMLC filed an Urgent Ex Parte Petition seeking a freeze order against 179 bank accounts associated with the respondents, which the Court of Appeals initially granted for 20 days. Subsequently, upon AMLC’s request, the Court of Appeals extended the freeze order for six months but later lifted the freeze order over all but one of the accounts after reconsideration.
Issues: 1. Whether the proceedings for a bank inquiry order should remain confidential and ex parte, including the very conduct of the inquiry.
2. Whether the Court of Appeals erred in requiring progress reports from AMLC to justify the continued freezing of the accounts despite finding probable cause.
3. Whether there was probable cause to believe that the frozen accounts were related to an unlawful activity, justifying the issuance and extension of the freeze order.
Court’s Decision: The Supreme Court held that the entirety of the bank inquiry proceedings should be confidential and ex parte. The Court found that the Court of Appeals was within its discretion to require progress reports from AMLC and that among the 179 bank accounts, only one had probable factual basis to be related to the alleged unlawful activity. The Court agreed with the Court of Appeals that lifting the freeze order was justified due to insufficient evidence to prove the accounts were conclusively related to the alleged unlawful activity.
Doctrine: The remedies of freeze order and order of bank inquiry under the Anti-Money Laundering Act are extraordinary, requiring probable cause to be issued, and are initially ex parte to avoid the risk of dissipating the assets involved. The burden of proving probable cause always rests with the AMLC. The Court of Appeals may require progress reports to justify the continuation of a freeze order, and it retains the discretion to conduct joint hearings for actions that involve common questions of law or fact to avoid unnecessary costs or delay.
Class Notes:
– “Probable Cause” in the context of Anti-Money Laundering Act requires facts and circumstances leading a reasonably prudent person to believe an unlawful activity and/or money laundering offense is or has been committed, and the assets are related to said activity/offense.
– The application and issuance of a Freeze Order and Bank Inquiry Order are initially ex parte to prevent the dissipation or concealment of involved assets.
– The Court of Appeals has discretion in the conduct of proceedings related to Freeze Orders and Bank Inquiries, including requiring progress reports and conducting joint hearings when cases involve common questions of law or fact.
Historical Background: This case highlights the legal mechanisms and processes in place within the Philippine judicial system to combat and investigate suspected money laundering activities. It underscores the challenges in establishing the link between bank accounts and alleged unlawful activities and demonstrates the judiciary’s role in balancing the need for confidentiality in financial transactions with the imperative of upholding laws against money laundering and related illegal activities.
Leave a Reply