G.R. No. 231495 . October 13, 2021
BCD FOREIGN EXCHANGE CORP., PETITIONER, VS. REPUBLIC OF THE PHILIPPINES, REP. BY ANTI-MONEY LAUNDERING COUNCIL (AMLC) AND METROPOLITAN BANK AND TRUST COMPANY (METROBANK), RESPONDENTS.

FACTS

Petitioner BCD Foreign Exchange Corp. (BCD) is a domestic corporation engaged in the foreign exchange business. Respondent Anti-Money Laundering Council (AMLC) filed an Ex-Parte Petition for a Freeze Order against bank accounts of Powleean Electronics Marketing, Inc. and its incorporators/directors (Chen Jiali, Elsa Alasad, Lianggun Wu) and others, following drug-related arrests and investigations. The Court of Appeals (CA) granted the petition and issued a Freeze Order effective for six months on September 29, 2016. Respondent Metrobank, in compliance, submitted detailed returns and identified two BCD accounts as recipients of funds from the frozen accounts: a closed “Old BCD Account” and an active “Subject BCD Account” (No. 7-285-51261-8) with a balance of PhP 48,539,839.65. Metrobank notified BCD, which then filed a Motion to Lift the Freeze Order, arguing Metrobank had no legal authority to freeze its accounts and that doing so violated the Bank Secrecy Law. The CA denied the motion, finding BCD’s accounts were related to the frozen accounts as the Old BCD Account had received numerous deposits from Chen Jiali’s frozen account, and BCD failed to prove legitimate transactions. The CA also noted documents in BCD’s name were recovered in a prior drug operation. BCD’s motion for reconsideration was denied.

ISSUE

Whether the CA erred in issuing the assailed Resolutions which maintained the effects of the Freeze Order over the Subject BCD Account.

RULING

The petition is unmeritorious. Procedurally, the case was rendered moot and academic as the Freeze Order had expired, and a civil forfeiture case was subsequently filed where a Provisional Asset Preservation Order (PAPO) and Asset Preservation Order (APO) were issued covering the Subject BCD Account. BCD’s remedy lies in assailing the incidents in the civil forfeiture case. On the substantive arguments, the Court held that Metrobank acted within its authority. The CA’s Freeze Order directed covered persons (like banks) to submit a detailed return specifying all pertinent information, including the basis for identifying related accounts. The 2016 Revised Implementing Rules and Regulations (RIRR) of the Anti-Money Laundering Act (AMLA) explicitly require covered persons to identify and include related accounts in their detailed return and to freeze them. Metrobank’s act of freezing the Subject BCD Account was a direct compliance with the CA’s Freeze Order and the AMLA’s implementing rules, not an independent exercise of discretion. Furthermore, the Bank Secrecy Law is not violated as the AMLA provides an exception when there is probable cause that the deposits are related to unlawful activities, as in this case where the accounts were materially linked to transactions under investigation for drug-related money laundering.