Published 11 June 2021, The Daily Tribune

Early this year, President Rodrigo Duterte signed into law Republic Act (RA) 11521 or the measure strengthening the Anti-Money Laundering Act of 2001 (RA 9160). The new law introduced significant amendments in the landscape of anti-money laundering compliance such as allowing the Anti-Money Laundering Council (AMLC) to issue subpoenas, conduct search and seizures of suspicious accounts, preserve, manage or dispose of assets pursuant to a freeze order, preservation order or judgment of forfeiture – which actions cannot be enjoined except by the Court of Appeals (CA) or the Supreme Court (SC).

In light of recent amendments to the Anti-Money Laundering law, the CA issued, last 16 May 2021, A.M. No. 21-03-05-CA or the Rule of Procedure in Cases of Bank Inquiry into or Examination of Deposit and Investment Accounts relating to an Unlawful Activity or a Money Laundering Offense under RA 9160, as amended.

The Rules of Procedure applies to ex parte applications for authority to inquire into or examine deposit or investment accounts with any banking institution or non-bank financial institution and their subsidiaries and affiliates, relating to an unlawful activity or a money laundering offense.

According to the Rules, the party to file the application is none other than the Republic of the Philippines, represented by the AMLC, through the Office of the Solicitor General (OSG). It is in charge of establishing that there is probable cause that the deposits or investments are involved in or related to an unlawful activity or a money laundering offense.

Where the authority to inquire or examine into involved a mix of banks with the main office in Manila or Luzon and local banks which do not have offices in Luzon, the ex parte application shall be filed in the CA in Manila. Meanwhile, where two or more local banks (without offices in Luzon are involved) but one or some have offices in the Visayas while the others are based in Mindanao, the application shall be filed with the CA station where the main office of the local bank is located.

The ex parte application shall contain the account number or any description of the account sought to be inquired or examined, the owner or holder of the account, the address of such owner or holder, the name of the banking institution or non-bank financial institution, the grounds for the grant of an authority to inquire or examine, and the supporting evidence showing the existence of probable cause that the accounts are involved in or related to an unlawful activity or a money laundering offense.

The application shall be filed with the Presiding Justice of the CA, and entered into a logbook specifically designed for the purpose. Note that the the logbook and the entries shall be strictly confidential, supporting the new provision in the law on security and confidentiality. Any violation shall constitute contempt of court and ground for an administrative case.

The CA division assigned with the case is given a period of 24 hours from receipt of the ex parte application to resolve the same. If the CA finds no merit in the application, it shall dismiss the same, stating the reasons thereof.

If the CA finds merit, it shall issue a bank inquiry order in the name of the Republic of the Philippines represented by the AMLC, describing with particularity the deposit or investment account, and direct the concerned banking institution or non-bank financial institution to allow the ALMC full access to all information, documents, and objects relating to the subject deposit or investment account within a specific period of time. The CA shall also direct the OSG to inform the court of civil forfeiture proceedings related to the case within five calendar days from its filing.

In issuing a bank inquiry order, the CA shall forbid the banking institution or non-bank financial institution, or any of its directors, officers, and employees, from disclosing or communicating to the owners or holders of accounts inquired into the fact that said accounts are being inquired into or examined. Any violation of this prohibition constitutes contempt of court.

A bank inquiry order shall be effective for a period of 120 calendar days, reckoned from the date of receipt by the AMLC. The period may be extended upon filing of a motion by the AMLC, which said motion must be filed before the lapse of the original period. Note that the period for extension shall not be more than 120 days.

The Rules are complementary to the SC’s Rule on Asset Preservation, Seizure, and Forfeiture in Criminal Cases under RA 9160, as amended.

Both the CA Rules and SC Rules took effect on 31 May 2021.

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