SC Affirms Sandiganbayan’s Subpoena on AMLC in Case against Mike Arroyo

November 11, 2021

The Supreme Court has affirmed the Sandiganbayan’s issuance of a subpoena on the Anti-Money Laundering Council (AMLC) in connection with the criminal case against former First Gentleman Jose Miguel T. Arroyo for his involvement in the Philippine National Police (PNP)’s alleged anomalous purchase of two secondhand helicopters.

In a Decision, the Court’s Third Division dismissed the Petition for Certiorari filed by the Republic, represented by the AMLC, assailing the March 28, 2017 Resolution and the May 12, 2017 Order of the Sandiganbayan which denied the AMLC’s Motion to Quash the Subpoena Duces Tecum and Ad Testificandum and its subsequent Motion for Reconsideration.

The petition is an offshoot of People v. P/Dir. General Jesus Versoza where the Office of the Special Prosecutor (OSP) charged Arroyo with plunder, among others, before the Sandiganbayan for his involvement in the purported anomalous purchase of helicopters by the PNP.

The seller, Lionair, Inc. (Lionair), sold the helicopters as brand new even if they were already used. Lionair’s president Archibald Po had testified that Arroyo was the real owner of the helicopters. Po alleged that Lionair imported the helicopters from the United States and sold them to Arroyo, who, in turn, deposited partial payment to Lionair’s account with the Union Bank.

The OSP presented the Manager of the Union Bank branch where the account was maintained to verify the source of deposits. The manager testified that the account was closed on March 6, 2006, and, as five years had lapsed since then, the bank had already disposed the account records. The manager suggested that the Bangko Sentral ng Pilipinas or the AMLC may have reports on the transaction, as banks are required to report covered transactions.

A covered transaction, under RA 9160, or the Anti-Money Laundering Act, refers to “’a single, series, or combination of transactions involving a total amount in excess of [P4,000,000.00] or an equivalent amount in foreign currency’ which has no credible purpose, origin, or underlying trade obligation or contract.” Covered transactions also include: (1) transactions in cash or other equivalent monetary instrument exceeding P500,000.00; (2) transaction with or involving jewelry or precious stone dealers in cash or other equivalent monetary instrument exceeding P1,000,000.00; and (3) casino cash transaction exceeding P5,000,000.00 or its equivalent are also deemed covered transactions. On the other hand, suspicious transactions are transactions with covered institutions, regardless of the amounts involved.

Thus, the Sandiganbayan, upon the OSP’s request, issued a subpoena duces tecum and ad testificandum directing Executive Director Julia Bacay-Abad, then Secretariat of the AMLC, to testify and to produce Lionair’s bank records.

The AMLC moved to quash the subpoena, arguing that whatever information it has on Lionair’s bank account is confidential under RA 9160. Citing Section 9(c) of RA No. 9160, the AMLC argued that covered institutions and their officers and

employees are prohibited from communicating that a covered or suspicious transaction report was made, its contents, or any information related to the reports. Banks are included in the covered institutions.

However, the Sandiganbayan denied the Motion to Quash and the subsequent Motion for Reconsideration. It ruled that the AMLC’s misgivings on the disclosure of the bank records were outweighed by the importance of these documents. Hence, the AMLC elevated the matter to the SC.

The High Court found the AMLC’s argument untenable.

The Court stressed that based on the text of RA 9160, the AMLC “is not one of the covered institutions prohibited from disclosing information on covered and suspicious transactions.” It also stressed that the rationale behind the prohibition does not extend and apply to the AMLC. It reiterated unlike covered institutions, the AMLC is mandated to investigate and use the information it has to institute cases against violators.

Furthermore, it held that the prohibition and confidentiality provisions cannot apply to the AMLC; otherwise, it would contravene its direct mandate under Section 7 of RA 9160.

“Petitioner is not merely a repository of reports and information on covered and suspicious transactions. It is created precisely to investigate and institute charges against the offenders. Section 7 clearly states that it is tasked to institute civil forfeiture proceedings and other remedial proceedings, and to file complaints with the Department of Justice or the Office of the Ombudsman for anti-money laundering offenses,” said the Court in the Decision penned by Justice Marvic M.V.F. Leonen.

The Court also stressed that the criminal prosecution of anti-money laundering offenses would be unduly hampered if petitioner were prohibited from disclosing information regarding covered and suspicious transactions.

The Court noted that it was not the first time that the AMLC was called to participate in the investigation and prosecution of cases involving banking transactions. Citing the 2018 case of Revilla v. Sandiganbayan, the AMLC “was presented as a witness during the Sandiganbayan trials in the plunder cases involving the pork barrel scam. In one of the cases, the Council reported that several investment and bank accounts of accused Ramon Revilla, Jr. were terminated immediately before and after the PDAF scandal leaked to the public.”

The Court held that the AMLC’s argument invoking confidentiality should not be an issue because the owner and depositor of the bank account itself had already waived its rights. Lionair has issued a written permission to produce its records.

“In sum, there was no showing that the Sandiganbayan gravely abused its discretion in issuing the Subpoena Duces Tecum and Ad Testificandum  and denying petitioner’s Motion to Quash and Motion for Reconsideration. Instead of avoiding compliance with the Subpoena, petitioner must firmly perform its mandate as an investigatory body and independent financial intelligence unit,” the Court said.

(G.R. Nos. 232724-27, Republic v. Sandiganbayan and Ombudsman, February 15, 2021)