SC affirms constitutionality of AMLC provision to look into bank accounts

MANILA, Philippines – A provision in the Anti-Money Laundering Act which allows the unilateral investigation into bank deposits and investments was affirmed constitutional by the Supreme Court Friday, January 6.

In a unanimous decision penned by Associate Justice Jose Portugal Perez, the Supreme Court denied the petition filed by Subido Pagente Certeza Mendoza & Binay Law Firm (SPCMB), a law firm associated with the Binays, that sought to invalidate Section 11 of RA 9160 or the the Anti-Money Laundering Act.

Section 11 of R.A. 9160 states that the Anti-Money Laundering Council (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.”

It allows the AMLC, upon approval from the Court of Appeals, to check the movement of money and history of the account. Banks could then waive their confidentiality agreement without having to notify the account owners.

The law firm SPCMB was among those investigated by AMLC in connection to allegations of the Binays' alleged ill-gotten wealth. 

In their petition, the law firm argued that the provision is "clearly unconstitutional for being violative of a person's right to due process and right to privacy." 

But the Court affirmed Section 11, saying it does not violate substantive due process because there is no physical seizure of property.

 “It is the preliminary and actual seizure of the bank deposits or investments in question which brings these within reach of the judicial process, specifically a determination that the seizure violated due process,” the Court decision said. 

The Court decision noted, however, that the law firm could question the validity of the court order. 

"We cannot overemphasize that SPCMB, as the owner of the bank account which may be the subject of inquiry of the AMLC, ought to have a legal remedy to question the validity and propriety of such an order by the appellate court under Section 11 of the AMLA,” the decision read.

And if it is found that the law firm's right to due process and privacy was violated, the Court said that any information gathered in AMLC's inquiry can be rendered inadmissible.

"In short, any and all information obtained therein by AMLC remains confidential, as if no examination or inquiry on the bank account or investments was undertaken," the Court decision said. - Lian Buan/