Beacon Currency Exchange, Inc. v. Republic

FIRST DIVISION

[G.R. No. 255099. March 18, 2021.]

BEACON CURRENCY EXCHANGE, INC. [BEACON], petitioner,vs. REPUBLIC OF THE PHILIPPINES, REPRESENTED BY THE ANTI-MONEY LAUNDERING COUNCIL [AMLC], respondent.

NOTICE

Sirs/Mesdames :

Please take notice that the Court, First Division, issued a Resolution dated March 18, 2021which reads as follows:

"G.R. No. 255099 (Beacon Currency Exchange, Inc. [BEACON] v. Republic of the Philippines, represented by the Anti-Money Laundering Council [AMLC]). — This Petition for Review on Certiorari with Application for Issuance of a Temporary Restraining Order and/or Writ of Preliminary Injunction 1 assails the Resolutions dated September 23, 2020 2 and January 14, 2021 3 of the Court of Appeals (CA) in CA-G.R. AMLA No. 00248, which extended the effectivity of the Freeze Order for 6 months or until March 2, 2021 with respect to the P3,000,000.00 deposit in Banco De Oro (BDO) Account No. 0005700086337 belonging to Beacon Currency Exchange, Inc. (Beacon).

Facts of the Case

The case stemmed from an Ex-Parte Petition for Issuance of Freeze Order filed by the Anti-Money Laundering Council (AMLC) through the Office of the Solicitor General (OSG) to the CA against several bank accounts including Banco De Oro (BDO) Bank Account No. 0005700086337 belonging to Beacon Currency Exchange, Inc. (Beacon). 4

Based on the record of the case, on February 8, 2019, the combined personnel of the Philippine National Police-Regional Police Drug Enforcement Unit (PNP-RPDEU), Regional Special Operations Group, RID7 and the Philippine Drug Enforcement Agency 7 conducted a buy-bust operation against Charlie Duhaylungsod Fortuna (Fortuna) involving the purchase of 25 grams of methamphetamine hydrochloride or shabu worth P170,000.00. The buy-bust operation was successfully executed and led to the arrest of Fortuna and the recovery of a total of almost seven kilograms of shabu in his possession with an estimated value of P47,770,000.00. In addition to the shabu, the police operatives found financial documents in Fortuna's possession consisting of MLhuillier send-out slips and bank deposit slips indicating that Fortuna was remitting proceeds of his drug trafficking activities to the persons and entities mentioned therein. One of the deposits was made to BDO Account No. 0005700086337 belonging to Beacon in the amount of P3,000,000.00. 5

Consequently, the police operatives filed a complaint against Fortuna for violation of Sections 5 and 11 of Article II of Republic Act No. (R.A.) 9165, otherwise known as the "Comprehensive Dangerous Drugs Acts of 2002." In addition, upon further investigation, the police discovered that despite the absence of financial means, Fortuna owned a house and lot in one of the wealthier subdivisions in Mandaue City. Hence, the police requested AMLC to conduct a financial investigation on Fortuna. 6

Pursuant to the request, the AMLC conducted the investigation against Fortuna and all the persons and entities associated with him, including Beacon. 7 The AMLC confirmed the existence of the BDO account belonging to Beacon as well as the P3,000,000.00 deposited therein allegedly by Fortuna. The AMLC found that the said BDO account is subject to a pending civil forfeiture case which also involves the deposit of funds from another drug-related activity. 8 Based on the investigation, the AMLC found probable cause that the subject bank accounts, including that of Beacon, are related to drug trafficking and/or money laundering. 9

On September 3, 2020, the CA issued a Freeze Order for a period of 20 days on the bank accounts including BDO Account No. 0005700086337 belonging to Beacon. 10 On separate dates, the parties affected by the freeze order, including Beacon, moved for the lifting of the same. On the other hand, the OSG filed a motion for the extension of the freeze order for a total of six months. 11

The OSG justifies its application for the extension of the freeze order based on the ongoing investigation being conducted by the AMLC. The OSG alleged that the case is a complex nature requiring deeper financial examination and analysis which cannot be completed in less than six months. Unless frozen, the bank accounts may be removed and placed beyond the reach of law enforcement. 12

Beacon, on the other hand, questioned the freezing of not only its BDO Account No. 0005700086337 but also of its two other U.S. Dollar Accounts. According to Beacon, it is legitimately engaged in the business of money remittance and exchange and its operations require undisrupted access to its bank accounts. Beacon explained that the flagged P3,000,000.00 deposit is part of the payment for the purchase of U.S. Dollars. Beacon submitted a copy of the Application to Sell/Purchase Foreign Currency showing that VW Group Asia, Inc., purchased US$156,153.00 for the purchase price of P8,101,217.64. As far as Beacon is concerned, the transaction was legitimate and conducted in the regular course of business. Beacon denied that the transaction is in any way related to illegal drugs trade. 13 Assuming that the OSG was able to show that it is involved in illegal activity, Beacon asserted that the freeze order should only cover the P3,000,000.00 deposit made in its BDO Account No. 0005700086337 and not the whole amount deposited therein as well as its two other U.S. Dollar bank accounts. 14

Ruling of the Court of Appeals

On September 23, 2020, the CA rendered its Resolution 15 modifying the Freeze Order issued on September 3, 2020. The CA lifted the freeze order against the two other U.S. Dollar bank accounts of Beacon but extended the effectivity of the same for 6 months or until March 2, 2021 with respect to the P3,000,000.00 deposit in BDO Account No. 0005700086337. 16

According to the CA, the freezing of the whole amount deposited in the flagged bank account of Beacon is not only unfair but is laden with social and financial catastrophic repercussions. This led to the extension of the freeze order for six months to only the P3,000,000.00 allegedly deposited by Fortuna. 17

However, Beacon is discontented with the resolution of the CA. Hence, it filed a motion for reconsideration. However, the motion was denied in a Resolution 18 dated January 14, 2021.

The denial of its motion for reconsideration prompted Beacon to file its Petition for Review on Certiorari with Application for Issuance of a Temporary Restraining Order and/or Writ of Preliminary Injunction. 19 Beacon prays that the freeze order should be lifted as well as to the P3,000,000.00 deposited in its BDO Account No. 0005700086337, citing the absence of probable cause that the fund sought to be frozen is related to an unlawful activity as defined under R.A. 9160, otherwise known as the "Anti-Money Laundering Act of 2001," as amended. 20

Issue

Whether the freeze order, whose effectivity was extended for 6 months, with respect to the P3,000,000.00 deposit to Beacon's BDO Account No. 0005700086337, should be lifted.

Ruling of the Court

The petition filed by Beacon has become moot after the lapse of the extended 6-month period under the Freeze Order issued by the CA.

Section 10 of R.A. 9160, as amended by R.A. 11521, provides for the following:

Section 10. Freezing Monetary Instrument or Property. —

(a) Upon a verified ex parte petition by the AMLC and after determination that probable cause exists that any monetary instrument or property is in any way related to an unlawful activity as defined in Section 3(i) hereof, the Court of Appeals may issue a freeze order which shall be effective immediately, for a period of twenty (20) days. Within the twenty (20)-day period, the Court of Appeals shall conduct a summary hearing, with notice to the parties, to determine whether or not to modify or lift the freeze order, or extend its effectivity. The total period of the freeze order issued by the Court of Appeals under this provision shall not exceed six (6) months. This is without prejudice to an asset preservation order that the Regional Trial Court having jurisdiction over the appropriate anti-money laundering case or civil forfeiture case may issue on the same account depending on the circumstances of the case, where the Court of Appeals will remand the case and its records: Provided, That if there is no case filed against a person whose account has been frozen within the period determined by the Court of Appeals, not exceeding six (6) months, the freeze order shall be deemed ipso facto lifted: Provided, further, That this new rule shall not apply to pending cases in the courts. In any case, the court should act on the petition to freeze within twenty-four (24) hours from filing of the petition. If the application is filed a day before a nonworking day, the computation of the twenty-four (24)-hour period shall exclude the nonworking days.

The freeze order or asset preservation order issued under this Act shall be limited only to the amount of cash or monetary instrument or value of property that court finds there is probable cause to be considered as proceeds of a predicate offense, and the freeze order or asset preservation order shall not apply to amounts in the same account in excess of the amount or value of the proceeds of the predicate offense.

A person whose account has been frozen may file a motion to lift the freeze order and the court must resolve this motion before the expiration of the freeze order.

No court shall issue a temporary restraining order or a writ of injunction against any freeze order, except the Supreme Court.

(b) For purposes of implementing targeted financial sanctions in relation to proliferation of weapons of mass destruction and its financing, as provided under Section 3(15), the AMLC shall have the power to issue, ex parte, an order to freeze without delay.

The freeze order shall be effective until the basis for its issuance shall have been lifted. During the effectivity of the freeze order, the aggrieved party may, within twenty (20) days from issuance, file with the Court of Appeals a petition to determine the basis of the freeze order according to the principle of effective judicial protection: Provided, That the person whose property or funds have been frozen may withdraw such sums as the AMLC determines to be reasonably needed for monthly family needs and sustenance including the services of counsel and the family medical needs of such person.

The AMLC, if circumstances warrant, may initiate civil forfeiture proceedings to preserve the assets and to protect it from dissipation. No court shall issue a temporary restraining order or a writ of injunction against the freeze order, except the Court of Appeals or the Supreme Court. (Emphasis supplied)

In this case, the Freeze Order was first issued by the CA on September 3, 2020 and extended for a period of six months or until March 2, 2021 with respect to the alleged P3,000,000.00 deposit by Fortuna in Beacon's BDO Account No. 0005700086337. A freeze order is merely an interim relief and pre-emptive in character, such that the monetary instruments or property that are in any way related to an unlawful activity or money laundering are temporarily preserved by preventing the owner from utilizing them during the duration of the freeze order. 21 Moreover, Section 10 of R.A. 9160, as amended, provides clearly that the freeze order shall be ipso facto lifted if there is no case filed against a person whose account was frozen within the period determined by the CA, but not exceeding 6 months.

In other words, the freeze order is not permanent and it is time-bound. Therefore, the Court no longer has the authority to act on Beacon's petition praying for the lifting of the Freeze Order.

WHEREFORE, the Petition for Review on Certiorari with Application for Issuance of a Temporary Restraining Order and/or Writ of Preliminary Injunction is DENIED.

SO ORDERED."

By authority of the Court:

(SGD.) LIBRADA C. BUENADivision Clerk of Court

By:

MARIA TERESA B. SIBULODeputy Division Clerk of Court

 

Footnotes

1.Rollo, pp. 3-38.

2. Penned by Associate Justice Maria Elisa Sempio Dy, with the concurrence of Associate Justices Ramon M. Bato, Jr. and Carlito B. Calpatura; id. at 47-70.

3.Id. at 73-80.

4.Id. at 114-115.

5.Id. at 118-120.

6.Id. at 121.

7.Id.

8.Id. at 134-135.

9.Id. at 140.

10.Id. at 47.

11.Id. at 51-52.

12.Id. at 53.

13.Id. at 57-58.

14.Id. at 59.

15.Id. at 47-70.

16.Id. at 65-66.

17.Id. at 64.

18.Supra note 3.

19.Supra note 1.

20.Rollo, pp. 14-15.

21.Ligot v. Republic, 705 Phil. 477 (2013).