BANK SECRECY

Question 1

What is the purpose of RA 1405?

Answer 1

• Under Sec 1, it is hereby declared that the Government should have a policy to discourage private hoarding and to give encouragement to the people to deposit their money in banking institutions so that the same may be properly utilized by banks in its authorized loans to assist in the economic development of the country.

Question 2

What are the prohibited acts under this Act?

Answer 2

) prohibits the examination or inquiry into such deposits or investments by any person, government official, bureau or office, as well as the b) disclosure by any official or employee of a bank of any information concerning said deposits.

Question 3

What are the deposits covered?

Answer 3

• GR: For peso deposits, all deposits of whatever nature with banks in the Philippines, including investments in government bonds issued by the Government of the Philippines, its political subdivision and instrumentalities.

Question 4

Exceptions under the bank secrecy law?

Answer 4

a. ) Upon written permission or consent in writing by the depositor, it must be voluntary and with sufficient awareness of relevant circumstances and likely consequences.
b. ) In case of impeachment of the President, Vice President, members of the Supreme Court, members of the Constitutional Commission, and the Ombudsman for culpable violation of the Constitution, treason, bribery, graft and corruption, other high crimes or betrayal of public trust.
c. ) Upon order of a competent court in cases of bribery or dereliction of duty of public officials.
d. ) In cases where the money deposited or invested is the subject matter of the litigation.

Question 5

Exceptions under other laws:

Answer 5

a. ) The Ombudsman has the power to issue subpoena
b. ) In pursuant to Anti-Graft and Corrupt Practices
c. ) In pursuant to The New Central Bank Act
d. ) The Commissioner of Internal Revenue in pursuant to application for compromise of tax liability and in pursuant to a tax treaty under The Exchange of Information on Tax Matters Act
e. ) AMLAC, with and without court order
f. ) Bangko Sentral in pursuant to periodic or special examinations to ensure compliance with the AMLA and conduct annual examination
g. ) PDIC and Bangko Sentral when there are unsafe or unsound banking practices
h. ) The Court of Appeals n connection with Anti-Terrorism case
i. ) The Commission on Audit to examine and audit government deposits
j. ) The Presidential Commission on Good Government in investigation of recovery of ill-gotten wealth by Marcos

Question 6

3.) Jurisprudence interpreting exceptions:

Answer 6

a. ) The exception in the law that is applicable in bribery also applies to plunder.
b. ) Cases of unexplained wealth are similar to cases of dereliction of duty or bribery.

Question 7

When can the Ombudsman exercise its power to issue the subpoena?

Answer 7

When the following condition concur:

1. There must be a case pending before a court of competent jurisdiction;
2. The account must be clearly identified;
3. The inspection must be limited to the subject matter of the pending case; and
4. The bank personnel and the account holder must be notified to be present during the inspection.

Question 8

What is the scope of the term “deposits”?

Answer 8

• Deposits is to be understood broadly and not limited only to accounts which give rise to creditor-debtor relationship between the depositor and the bank.

Question 9

What is foreign currency deposit?

Answer 9

• Funds in foreign currencies which are accepted and held by authorized banks in the regular course of business with the obligation to return an equivalent amount to the owner thereof, with or without interest.

Question 10

Absolute Confidentiality of Foreign Currency Deposits (GR)

Answer 10

• All foreign currency deposits are absolutely confidential and cannot be examined, inquired, or looked into. They are also exempt from attachment, garnishment, or any other order or process of any court, legislative body, government agency or any administrative body whatsoever.

Question 11

1.) Exception under the FCDA:

Answer 11

When there is a written permission of the depositor.

Question 12

2.) Exceptions under other laws (FCDA):

Answer 12

1. Written waiver in pursuant to the New Central Bank Act
2. Commissioner of Internal Revenue
3. AMLAC
4. Bangko Sentral
5. PDIC and Bangko Sentral
6. Commission on Audit

Question 13

3.) Exceptions under jurisprudence on grounds of equity:

Answer 13

a. ) The garnishment of a foreign currency deposit account of a non-resident alien found guilty of aping a minor was allowed on the basis of equity.
b. ) A co-payee of a check filed a suit for recovery of sum of money was considered, in a pro hac vice ruling by the SC, as a depositor in view of the distinctive circumstances of the case.