Special Blocked Fiduciary Accounts of Nonresidents

October 27, 1958 CBP NOTIFICATION TO AUTHORIZED AGENTS NO. 58-58 SUBJECT : Special Blocked Fiduciary Accounts of Nonresidents 1. This notification supersedes Notification to Authorized Agents No. 19 dated February 6, 1950 entitled "Peso Bank Accounts of Nonresidents Other Than Banks" in so far as peso bank accounts of nonresidents other than banks are concerned. 2. Peso bank accounts existing as of October 22, 1958, belonging to any person, firm, partnership, association, branch office, agency, company, or other unincorporated body or entity not residing or located in the Philippines, irrespective of whether such accounts are operated by persons in the Philippines or by the nonresident owner, shall be treated as special blocked fiduciary accounts of the nonresident owners, and debits and credits thereto shall be as provided in this notification. All licenses heretofore granted by the Exchange Control Department to operate peso bank accounts of nonresidents as resident accounts are hereby cancelled, except licenses authorizing the operation as resident accounts of peso bank accounts of nonresidents which are funded exclusively by inward dollar remittance and solely for local disbursements of the owner of the account. LLphi 3. From and after the date of this notification and up to December 12, 1958, Agent Banks may accept new special blocked fiduciary accounts of nonresident persons, firms, partnerships, associations, branch offices, agencies, companies, or other unincorporated bodies or entities not residing or located in the Philippines, either singly or in groups, upon application of the resident individuals and/or companies holding the funds for account of the said nonresidents. The application to open the account must be filed on E. C. Form 108, Revised, copy of which is attached, and must include information as to the source of the funds to be deposited to the account. If the special blocked fiduciary account is to be opened for two or more nonresident individuals, firms, partnerships, associations, branch offices, agencies, companies or other unincorporated bodies or entities, the application shall, in addition, be supported by a list of such nonresidents in whose behalf the account is to be opened and maintained. Until the sources of the amounts deposited to these accounts shall have been verified by the Exchange Control Department, no debits thereto shall be allowed, except as provided in paragraph numbered 6 of this notification. 4. From and after December 15, 1958, no special blocked fiduciary account of a nonresident person, firm, partnership, association, branch office, agency, company, or other unincorporated body or entity not residing or located in the Philippines may be opened with a commercial bank without the prior approval of the Exchange Control Department. The applications to open such an account must also be filed on E. C. Form No. 108 (Revised), and must include information as to the sources of the funds to maintain the account and the amount to be initially deposited. If the account is to be opened in behalf of two or more nonresidents, it shall furthermore be accompanied by a list of said nonresidents together with a statement of the amounts to be initially deposited to the credit of each said nonresident. 5. The following credits to the existing peso bank accounts of nonresidents other than banks which shall be treated as special blocked fiduciary accounts of the nonresident owners, and to new special blocked fiduciary accounts of nonresidents other than banks which are opened after October 22, 1958, are permitted without the prior approval of the Exchange Control Department: LLphi (a) Transfers from the account of a nonresident bank. (b) Profits, dividends and interests on approved investments owned by the nonresident owner or owners of the account, provided the relative amounts are covered by checks issued by the companies paying the profits, dividends or interests. (c) Proceeds of sale of inward dollar remittances, irrespective of amount. (d) Balances of an approved switch transaction for account of the nonresident owner of the account, authorized under E. C. Form X, and proceeds of sale of securities belonging to said nonresident, authorized under E. C. Form Y, provided that said securities were acquired in accordance with the exchange control regulations. 6. The following debits to the blocked fiduciary accounts of nonresidents are permitted without the prior approval of the Exchange Control Department: (a) Purchase of foreign exchange authorized under exchange licenses issued by the Exchange Control Department or by Authorized Agents in behalf of the Exchange Control Department, in which the nonresident owner of the account is the beneficiary. LLphi (b) Local payments in respect of postal and telegraph charges, stamp fees, storage and safe custody charges, bank charges, payments to servants, insurance premia, allowances to relatives, minor repairs to houses, and other local payments, provided the aggregate payments in any calendar month do not exceed 2,000, and no single payment exceeds P200. (c) Payment of real property taxes on real property belonging to the nonresident owner of the account, and internal revenue taxes due from the same nonresident, provided such payments are made direct to the provincial, city or municipal treasurer concerned in the case of real property taxes, and to the Commissioner of Internal Revenue in the case of internal revenue taxes. A certified true copy or photostat of the official receipt evidencing such payment shall later on be submitted to the Exchange Control Department. 7. Authorized Agents shall render weekly reports of all special blocked fiduciary accounts maintained with them under the provisions of this notification and shall state the closing balances each week. In the case of debits or credits to said accounts maintained in behalf of groups of individuals and firms, the report shall furthermore be supported by a list of the nonresidents in whose behalf the debits or credits are made and the relative amounts. This list shall be required by the Authorized Agent concerned from the person operating the account. LLphi 8. Credits to special blocked fiduciary accounts other than those described in paragraph 5 of this notification shall require the prior approval of the Exchange Control Department. Amounts withdrawn from the said special blocked fiduciary accounts without the approval of the Exchange Control Department shall lose all remittability rights and the privileges of blocked funds. (SGD.) ANDRES V. CASTILLO Deputy Governor E. C. Form 108 (Revised) To be accomplished in quadruplicate CENTRAL BANK OF THE PHILIPPINES Manila EXCHANGE CONTROL DEPARTMENT APPLICATION FOR LICENSE TO OPEN A SPECIAL BLOCKED FIDUCIARY BANK ACCOUNT OF NONRESIDENTS Date __________ 1. Name of Applicant (the applicant shall be the nonresident himself or his authorized representative in the Philippines) ____________________________ _____________________________________________________________ Address ______________________________________________________ Nature of Business ______________________________________________ 2. Person(s) in whose name(s) the account will be opened and maintained: _____________________________________________________________ Address (es) ___________________________________________________ 3. Name (s) of nonresident (s) for whom the account will be opened and maintained: _____________________________________________________ ______________________________________________________________ Address (es) ____________________________________________________ 4. Name of Authorized Agent in which the account is to be opened and maintained: ______________________________________________________________ 5. Name of representative in the Philippines authorized to operate the account if operation is to be made other than by the nonresident himself: ______________________________________________________________ ______________________________________________________________ Address of representative __________________________________________ Relationship to nonresident owner of the account _________________________ 6. Sources of the funds to maintain the account 7. Amount to be initially deposited to the account and sources thereof. If the account is to be opened for two or more nonresidents, the amount to be initially deposited to the account for each nonresident shall be stated. If space provided on the form is insufficient, the statement shall be submitted in a separate sheet to be attached to the application. LLphi _____________________________________________________________ _____________________________________________________________ _____________________________________________________________ I hereby certify to the truthfulness of the information I have supplied above and undertake that I will not make available to any person or firm in the Philippines any foreign exchange against reimbursements in pesos without having first obtained the permission of the Exchange Control Department. I further agree that any transactions on the count, except those for which advance approval is granted by the Exchange Control Department, will be subject to specific prior approval by the said Department, otherwise, the amount involved will lose all remittability rights and the privileges of blocked funds. _________________________ Signature of Applicant Application No. ____________________ License No. ____________________ Date Received _____________________ Date Approved _________________