BANK Secrecy AND Unclaimed Balances LAWS PDF

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Why is there a Bank secrecy law in the first place? It hopes to discourage private hoarding and at the same time encourage the people to deposit their money in banking institutions, so that it may be utilized by way of authorized loans and thereby assist in economic development Only 2 countries have bank secrecy law  Philippines  Lebanon PESO DEPOSITS (RA 1405): All deposits of whatever nature with banks or banking institutions in the Philippines including investments in bonds issued by the Government of the Philippines, its political subdivisions and its instrumentalities, are considered absolutely confidential and may not be examined, inquired or looked into by any person, government official, bureau or office, unless; EXCEPTIONS TO CONFIDENTIALITY: (PIO-GUAPO-CA-A) a. Written Permission of the depositor b. Impeachment c. Upon Order of a competent court  In cases of bribery or dereliction of duty of public officials  The money deposited or invested is the subject matter of litigation d. Incidental disclosure in Garnishment or execution of bank deposits e. Incidental disclosure under the Unclaimed Balances Law f. Prosecution for unexplained wealth under the Anti-Graft and Corrupt Practices Act g. PDIC/BSP may inquire into bank deposits if there is a finding of unsound or unsafe banking practice Sec.8(8), PDIC Charter h. Power of the Ombudsman to examine and have access to bank accounts and records under Sec.15(8) of RA 6770 i. Authority of the Commissioner of Internal Revenue to inquire into the bank deposits of a decedent for estate tax purposes or in case of a tax compromise under Sec.6(f) of the NIRC or upon request for tax information by a foreign tax authority under an international convention or agreement. RA10021 (2009) j. Authority of the AMLC to inquire into any particular deposit or investment with any banking institution upon order of CA based on an ex parte application upon probable cause that such deposit/investment is related to an unlawful activity or to money laundering pursuant to Section 11 of the AMLA of 2001 (RA 9160, as amended by RA 9194 and RA 10167)  Reporting of covered or suspicious transactions pursuant to Sec9(c) of the AMLA  The BSP may, in the course of a periodic or special examination, check the compliance of a covered institution with the requirements of the AMLA and its implementing rules and regulations (Sec11 AMLA) k. Authority of AMLC, either upon its own initiative or at the request of ATC, to inquire into bank deposits upon the issuance by the court of a preliminary order of proscription or in case of designation:  Any property or funds that are in a way related to financing of terrorism as defined and penalized under RA 10168

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Violation of Sec4,6,7,10,11 or 12 of the Anti-Terrorism Law Property or funds of any person or persons in relation to whom there is a probable cause to believe that such person or persons are committing or attempting or conspiring to commit, or participating in or facilitating the financing of terrorism.

Prohibited Act: It shall be unlawful for any official or employee of a banking institution to disclose to any person any information concerning bank deposits. The prohibition is not absolute. The rule allows several exceptions, carved out by special laws and jurisprudence. FOREIGN CURRENCY DEPOSITS (RA 6426): All foreign currency deposits are of an absolutely confidential nature and, except upon the written permission of the depositor, in no instance shall foreign currency deposits be examined, inquired or looked into by any person, government official, bureau or office whether judicial or administrative or legislative or any other entity whether public or private. EXCEPTIONS TO CONFIDENTIALITY: (WAP-AC) a. Written Permission of depositor b. Authority of the AMLC to inquire into any particular deposit or investment with any banking institution upon order of CA based on an ex parte application upon probable cause that such deposit/investment is related to an unlawful activity or to money laundering pursuant to Sec 11 of AMLA  Reporting of covered or suspicious transaction pursuant to Sec9(c) of the AMLA  The BSP may, in the course of the periodic or special examination, check the compliance of a covered institution with the requirements of the AMLA and its implementing rules and regulations (S11 AMLA) c. PDIC/BSP may inquire into bank deposits if there is finding of unsound or unsafe baking practice (Sec8(8) PDIC Charter) d. Authority of AMLC to inquire into or examine bank deposits and investments pursuant to the Anti-Terror Law e. Authority of the Commissioner of Internal Revenue to inquire into the bank deposits of a decedent for estate tax purposes or in case of a tax compromise EXCEPTIONS FROM PROCESS OF FOREIGN CURRENCY DEPOSITS Foreign currency deposits (FCD) shall be exempt from attachment, garnishment, or any other order or process of any court, legislative body government agency or any administrative body whatsoever. (S8FDCA). The processexemption should be distinguished from the confidentiality clause. Exemption from confidentiality does not necessarily translate to exemption from process. In other words, FCD are exempt from court order or administrative process EXCEPTIONS TO THE EXEMPTION  Pro hac vice (for that instance only) case o The Supreme Court allowed the garnishment of FCD of a foreign

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national who raped a minor and escaped (Salvacion vs. Central Bank) Civil Forfeiture Suit brought by the AMLC through the OSG pursuant to Sec7(4) & 12 of AMLA and Sec 18 of TFPSA Freeze order pursuant to AMLA and Anti-Terror Law...