Aside from freezing monetary instrument, read also: ON COVERED TRANSACTIONS UNDER ANTI-MONEY LAUNDERING ACT
-
A Freeze Order may be issued against any monetary instrument or property
-
The Freeze Order shall be effective immediately and shall be for a period of twenty (20) days unless extended
-
A Freeze Order cannot be issued for an indefinite period of time
My favorite things in life don’t cost any money. It’s really clear that the most precious resource we all have is Time. – Steve Jobs
In our previous article it was discussed that Anti-Money Laundering Act, as amended, was enacted to protect and preserve the integrity and confidentiality of bank accounts and to ensure that the Philippines shall not be used as a money laundering site for the proceeds of any unlawful activity such as robbery. In connection with this, the Court of Appeals may issue a Freeze Order which shall be effective immediately. The Freeze Order is to be valid for twenty (20) days unless extended.
What is a Freeze Order?
The Supreme Court says:
A Freeze Order is a relief issued by the Court of Appeals to prevent dissipation, removal, disposal of properties that are subject to be the proceeds of, or related to, unlawful activities as defined under Anti-Money Laundering Act, as amended.
The primary objective of a Freeze Order is to temporarily preserve monetary instruments or property that are in any way related to an unlawful activity or money laundering. How? By preventing the owner from utilizing them during the duration of the Freeze Order. With the Freeze Order, the owner is prevented from disposing the property and thwarting the State’s effort in building its case and eventually filing civil forfeiture proceedings and/or prosecuting the owner.
For a better understanding, let us take the case of Ligot et.al vs. Republic of the Philippines, represented by the Anti-Money Laundering Council, G.R.No. 176944, March 6, 2013:
In this case, the Anti-Money Laundering Council (AMLC) filed an application for the issuance of a Freeze Order with the Court of Appeals against certain monetary instruments and properties of the Ligots. The application was based on the February 1, 2005 letter of the Office of the Ombudsman to the AMLC, recommending that the latter conduct an investigation on Lt. Gen. Ligot and his family for possible violation of Anti-Money Laundering Act.
In support of the recommendation is a Complaint filed against the Ligots for violations of several laws. The Ombudsman’s investigation revealed that Lt. Gen. Ligot and his family had other properties and bank accounts that were not declared in his Statement of Assets, Liabilities, and Net Worth (SALN) amounting to Php 54,001,217.00.
Bearing in mind that Lt. Gen. Ligot’s main source of income was his salary as an officer of the Armed Forces of the Philippines (AFP), and given his wife and children’s lack of any other substantial sources of income, the Ombudsman declared that the assets registered in Lt. Gen. Ligot’s name, as well as those in his wife’s and children’s names, to be illegally obtained and unexplained wealth.
To cut it short, the Court of Appeals issued a Freeze Order on July 5, 2020 against the Ligots’ and Yambao’s (Lt.Gen. Ligot’s younger brother) various bank accounts, web accounts and vehicles valid for a period of 20 days from the date of issuance. On July 26, 2005, AMLC filed a motion for the extension of the effectivity of the Freeze Order. On September 20, 2005, the Court of Appeals granted the motion and extended the Freeze Order until all the appropriate proceedings and/or investigations have been terminated. In essence, the Freeze Order was extended indefinitely.
Is there a remedy for the Ligots and Yambaos considering that their money instruments and properties were “frozen” for an indefinite period of time?
The Supreme Court says:
Yes.
The Ligots filed a Motion to Lift the extended Freeze Order but was denied by the Court of Appeals. Thus, the Ligots elevated the case to the Supreme Court.
It should be noted that the existence of an unlawful activity would justify the issuance and the extension of the Freeze Order. However, a Freeze Order cannot be issued for an indefinite period. A Freeze Order is meant to have a temporary effect; it was never intended to supplant or replace the actual forfeiture cases.
As a rule, the effectivity of a Freeze Order may be extended by the Court of Appeals for a period not exceeding six (6) months. Before or upon the lapse of this period, ideally, a case should have already been filed for civil forfeiture against the property of the owner with the proper courts and accordingly secure an asset preservation order or it should have filed the necessary information. Otherwise, the property owner should already be able to fully enjoy his property without any legal process affecting it.
In the present case, the Supreme Court noted that the Republic as represented by AMLC, has not offered ay explanation why it took six (6) years (from the time it secured a Freeze Order) before a civil forfeiture case was filed in court, despite the clear tenor of the Rule in Civil Forfeiture Cases allowing the extension of a Freeze Order only for a period of six (6) months. Thus, the Freeze Order was lifted.
Alburo Alburo and Associates Law Offices specializes in business law and labor law consulting. For inquiries, you may reach us at info@alburolaw.com, or dial us at (02)7745-4391/0917-5772207.
All rights reserved.
SUBSCRIBE NOW FOR MORE LEGAL UPDATES!
[email-subscribers-form id=”4″]