DOJ Opinion No. 144, s. 1992

DOJ OPINION NO. 144 , s. 1992 October 9, 1992 The Senior Deputy Governor Central Bank of the Philippines Manila Sir : This has reference to your request for opinion/comment on the following queries: 1. Whether the employment of Messrs. Kai Jeung Chin and Hachiro Sato, American and Japanese nationals, respectively, at the Far East Bank and Trust company (FEBTC) constitutes a violation of Section 2-A of the Anti-Dummy Law? and 2. Whether in the employment of a foreign national, a domestic bank can dispense with the requirement of seeking prior authority from the Secretary of Justice as provided for under Section 2-A of the anti-Dummy Law and just comply with the requirements of the Immigration Act? prcd It appears that Mr. Chin, representing Chemical International Finance, Ltd., which owns 12.35% of FEBTC's total capital stock serves as Director and Senior Vice-President of FEBTC and at the same time, Vice-President and General Manager of Chemical Bank, an offshore banking unit, while Mr. Sato, representing Mitsui Taiyuo Kobe Bank. Ltd., which own 12.37% of FEBTC'S total capital stock, serves also as director and Senior Vice-President of FEBTC; that subject foreign nationals are holding an Offshore Banking Unit (OBU) representative visa and an investor's representative visa, respectively; that in both instance, FEBTC did not file a request for authority to employ Messrs. Chin and Sato with our Department; and that FEBTC argues that under Section 9(g) of the Philippine Immigration Act of 1940, as amended, an investor's representative visa does nor require prior approval from the Department of Justice for local employment. The election of foreign national as Directors in corporations engaging in partially nationalized activities is allowed under Section 2-A of the Anti-Dummy Law (C.A. No. 108, as amended), which, insofar as relevant, provides: "SEC. 2-A. Any person, corporation or association which, having in its name or under its control, a right, franchise, privilege, property or business, the exercise or enjoyment of which is expressly reserved by the Constitution or the laws to citizens of the Philippines or of any other specific country, or to corporations or associations at least sixty per centum of the capital of which is owned by such citizens, permits or allows the use, exploitation or enjoyment thereof by a person, corporation or association not possessing the requisites prescribed by the constitution or the laws of the Philippines; . . . to intervene in the management, operation, administration or control thereof, whether as an officer, employee or laborer therein with or without remuneration except technical personnel whose employment may be specifically authorized by the Secretary of Justice, . . . and Provided finally, That the election of aliens as members of the board of directors or governing body of corporation or associations engaging in partially nationalized activities shall be allowed in proportion to their allowable participation or share in the capital of such activities ." (Emphasis ours) prcd However, with respect to the employment of Messrs. Chin and Sato as Senior Vice-Presidents of FEBTC without prior authority of the Secretary of Justice, we find the same to be a violation of the Anti-Dummy Law. We had the occasion to rule that an alien who is elected as a director pursuant to P.D. No. 715 may not hold any other position which would allow intervention in the management of a wholly or partially nationalized activity. P.D. No. 715 was merely intended to give alien stockholders "limited representation" in the governing board in proportion to their equity. Had the decree been intended to except alien directors from the general prohibition against the employment of aliens and to allow their intervention in the management of said entities as officers thereat, the proviso would have been worded to express that purpose. (Sec. of Justice Op. No. 37, s. 1976). There have been instances though when this Department had authorized the employment of aliens in domestic banks. But the authority is granted only upon favorable recommendation of that Office based on the finding that the employment of the foreign nationals is technical in nature (see case of Messrs. Christopher Anthony Bell-Knight and Roland Louis Raymond Borotra, Solidbank Corporation). Regarding your second query, in the employment of a foreign national, a domestic bank cannot dispense with the requirement of seeking prior authority from the Secretary of Justice and just comply with the requirements of the Immigration Act. The reason for this has been amply explained in a previous opinion of this Department, viz: "The purpose of the Immigration Law, it must be pointed out, is to control and regulate the entry of aliens into the Philippines, and section 20 prescribes the conditions under, and the procedure by, which the issuance of a visa to an aliens 'coming to pre-arranged employment" may be authorized by the Board of Commissioners. On the other hand, the Anti-Dummy Law is a penal statute primarily designed to prevent unqualified persons from exercising or enjoying rights, etc., otherwise reserved by the constitution or the laws to citizens of the Philippines and to deter the qualified persons, corporations, or associations from being used as dummies of those who are unqualified and to carry out these objectives, section 2-A prescribes the conditions under which an alien may be allowed to be employed as "technical personnel' in any of such nationalized trades of businesses. prcd I have therefore come to the conclusion that the two provisions in question section 2-A of the Anti-Dummy Law and section 20 of the Immigration Law not being in conflict with each other, may stand together and be enforced simultaneously so that where an alien is to be employed as 'technical personnel' in a nationalized trade, business or industry the former shall apply, but where an alien is applying for entry into the Philippines for 'prearranged employment' in a non-nationalized trade or business, the latter shall apply." (Op. No. 158, s. 1971) Very truly yours, (SGD.) RAMON J. LIWAG Secretary