DOJ Opinion No. 071, s. 1994

DOJ OPINION NO. 071 , s. 1994 May 16, 1994 Chairman Rosario N. Lopez Securities and Exchange Commission SEC Building, EDSA Greenhills, Mandaluyong Metro Manila M a d a m : This refers to your request for opinion on whether or not the SEAMEO Regional Center for Graduate Study and Research in Agriculture ("SEARCA"), is required to register with the Securities and Exchange Commission ("SEC") before it can obtain and administer loans from private and government banks. prcd It appears that on February 7, 1968, the ministers of education of Indonesia, Laos, Malaysia, Philippines, Singapore and Thailand signed the Charter of the Southeast Asian Ministers of Education Organization ("SEAMEO") to promote cooperation through education, science and culture; that on August 31, 1972, the Philippine Senate adopted Resolution No. 56 concurring in the acceptance by the President of the Philippines of the Charter of SEAMEO; that pursuant to the SEAMEO charter, the Ministers of Education Council organized SEARCA through an enabling instrument which inter alia defined its legal standing; that in June 39, 1969, a "Letter of Agreement" on the establishment of SEARCA at UP College of Agriculture in Los Baos, Laguna was signed by the Philippine Government, the United States Government and the Southeast Asian Ministers of Education Council. It further appears that recently SEARCA was requested to administer the proceeds of agricultural loans from DBP and LBP for local farmers; that the latter bank refuses to release its part of the loan proceeds to SEARCA since it has questioned its legal personality owing to its failure to register with the SEC; and the SEARCA believes that it is not required to be so registered because it is an international organization. We find SEARCA's abovestated stand legally sustainable. There is a basis in SEARCA's claim that it is an international organization. Its charter, (known as "Enabling Instrument") was adopted by the Southeast Asian Ministers of Education Council in pursuit of the objectives behind the establishment of the SEAMEO. It is noted that SEAMEO is a regional aggrupation of certain countries of Southeast Asia and Philippine acceptance of its charter was concurred in by the Senate. Since the SEAMEO charter is indubitably an international agreement, it should follow the SEARCA, which was organized in accordance therewith has likewise acquired an international character (see Article XIV of the Enabling Instrument). It has been said, in this connection, that generally, the ratification of an international agreement, provided it is self-executing, would suffice to put an entity created thereby beyond the interference of municipal law (O'Connell, International Law, Vol. 1, 1905 Ed., p. 128). Moreover ,SEARCA's Enabling Instrument provides that said document "is the sole source of the authority and rights" of said organization (see Enacting Clause) that SEARCA "derives its juridical personality from [its charter] and possesses "full capacity" to "contract", "acquire, dispose of immovable and movable property ," and "institute legal proceedings" (see Art. XIV, supra ), and that it shall be accorded "such privileges and immunities as are normally accorded United Nations institutions" ( Id .). Additionally, SEARCA was the subject of a Letter-Agreement on funding assistance between itself, SEAMEO and the governments of the Philippines and the United States under which SEARCA was acknowledged to be "distinctly international in character" (See 2d para., Sec. II of Letter-Agreement). Being a party-signatory to the foregoing documents, the Philippine Government, pursuant to the international law principle of pacta sunt servada , is bound to honor its commitments and comply with its obligations thereunder. The query is answered accordingly. Very truly yours, (SGD.) FRANKLIN M. DRILON Secretary