Philippines
March 30, 2016
Are fictitious accounts covered by bank secrecy law?
Faces behind the fictitious bank accounts identified
According to Sen Enrile it is merely the opinion of the gentlemen at the Senate hearing that the 5 accounts at RCBC Jupiter are fictitious and therefore no longer subject to RA 1405 (bank secrecy law) He believes that if we are to comply with the law, we have to have a competent court determine that, not Senate, because evidence obtained under duress, or in violation of the law will be inadmissible for future court proceedings.
There are only four (4) instances under the law where bank deposits or investment in government bonds may be disclosed or looked into, namely: (1) upon written permission of the depositor; or (2) in cases of impeachment; or (3) upon order of a competent court in cases of bribery or dereliction of duty; or (4) in cases where the money deposited or invested is the subject matter of the litigation.
From Interasksyon - It is for the courts to determine the illicitness of of an account. Not the Senate - Enrile
Sens Guingona, and Pimentel a bar top notcher think fictitious accounts are not covered. AMLC head Abad think they are be exempted. but Circular 706 (guidelines for AML) of CB does not amend the secrecy law and merely states "deemed" and is merely a CB Circular.
Here is a relevant FAQ on the subject matter:
C. Continued confidentiality/secrecy of deposit transactions
Q. Is confidentiality/secrecy of deposit accounts compromised with the issuance of Circular 251?
A. No. Circular 251 merely disallowed the opening of fictitious and anonymous accounts and has not in any way modified nor lessened the safeguards and protection to depositors under RA 1405. This means that, notwithstanding Circular 251, deposit accounts cannot be examined or looked into except under the limited circumstances provided for in RA 1405.
Q. Why are the BSP and the BAP advocating the amendment to bank secrecy laws?
A. The proposal of BSP and BAP is for access to deposit accounts only under exceptional circumstances, such as deposits only above the P50-million level and in relation to the commission of serious offenses like racketeering and illicit drug trade. Except for these instances, depositors and those with legitimate transactions remain protected under RA 1405. The objective of the proposal is to institute this measure as an anti-money laundering campaign so as to delete the Philippines as a non-cooperative country in the list of the Financial Action Task Force against money laundering.
There is a continuing secrecy under this FAQ, the prohibition on fictitious account notwithstanding. Now the case at bar vs Deguito may be the basis for the examination of account under condition #4.
Freezing/stop payment of transfers
The law does not allow the stop payment of transfers, especially for dollar accounts, even for fictitious accounts according to Estavillo, head of RCBC legal department. She hopes Senate can plug the loopholes in the law
