REPUBLIC V.

JUDGE EUGENIO
G.R. NO. 174629, 14 FEBRUARY 2008

FACTS: After the Agan v. PIATCO ruling, a series of

investigations concerning the award of the NAIA 3
contracts to PIATCO were undertaken by the
Ombudsman and the Compliance and Investigation Staff
(CIS) of the Anti-Money Laundering Council (AMLC).
The OSG wrote AMLC requesting AMLCs assistance in
obtaining more evidence to completely reveal the
financial trail of corruption surrounding the NAIA 3
Project, and also noting that the Republic was presently
defending itself in two international arbitration
cases. The CIS conducted an intelligence database
search on the financial transactions of certain individuals
involved in the award, including Alvarez (Chairman of
the Pre-Qualification Bids and Awards Technical
Committee). By this time, Alvarez had already been
charged by the Ombudsman with violation of Section 3(J)
of the Anti Graft and Corrupt Practices Act.1 The search
revealed that Alvarez maintained 8 bank accounts with 6
different banks

having been used to facilitate corruption in the NAIA 3

Project. The ex parte application was granted and the
MANILA RTC issued a bank inquiry order.
Alvarez alleged that he fortuitously learned of the bank
inquiry order, which was issued following an ex parte
application, and he argued that nothing in the AntiMoney Laundering Act (AMLA) authorized the AMLC to
seek the authority to inquire into bank accounts ex
parte.
After several motions, manifestations, orders and
resolutions the case went up to the SC. Alvarez et al.s
position: The AMLA, being a substantive penal statute, has no
retroactive effect and the bank inquiry order could not apply to
deposits or investments opened prior to the effectivity of the
AMLA (17 October 2001). The subject bank accounts, opened in
1989 to 1990, could not be the subject of the bank inquiry
order without violating the constitutional prohibition against ex
post facto laws.3

ISSUE: Whether or not the proscription against ex post

facto laws applies to Section 11 of the AMLA (a provision
which does not provide a penal sanction BUT which
merely authorizes the inspection of suspect accounts
The AMLC issued a resolution authorizing its Executive and deposits).4
Director to sign and verify an application to inquire into
the deposits or investments of Alvarez et al. and to HELD: YES. It is clear that no person may be prosecuted
authorize the AMLC Secretariat to conduct an inquiry under the PENAL provisions of the AMLA for acts
once the RTC grants the application. The rationale for committed prior to the enactment of the law (17 October
the resolution was founded on the findings of the CIS 2001).
that amounts were transferred from a Hong Kong bank
account to bank accounts in the Philippines maintained With respect to the AUTHORITY TO INSPECT, it should be
by respondents. The Resolution also noted that by noted that an ex post facto law is one that (among
awarding the contract to PIATCO (despite its lack of others) deprives a person accused of a crime of some
financial capacity) Alvarez violated Section 3(E) of the lawful protection to which he has become entitled, such
Anti Graft and Corrupt Practices Act.2 The MAKATI RTC as the protection of a former conviction or acquittal, or a
rendered an Order granting the AMLC the authority to proclamation of amnesty.
inquire and examine the subject bank accounts of
Alvarez et al.
PRIOR to the AMLA:
In response to a letter of Special Prosecutor Villa-Ignacio,
AMLC issued a Resolution authorizing its Executive
Director to inquire into and examine the accounts of
Alvarez, PIATCO, and several other entities involved in
the nullified contract. AMLC filed an application before
the MANILA RTC to inquire into the accounts alleged as
1

Sec. 3. Corrupt practices of public officers. - In addition to acts or

omissions of public officers already penalized by existing law, the
following shall constitute corrupt practices of any public officer and
are hereby declared to be unlawful:

(1) The fact that bank accounts were involved in activities later
on enumerated in the law did not, by itself, remove such
accounts from the shelter of absolute confidentiality.
(2) In order that bank accounts could be examined, there was
need to secure either the written permission of the depositor
OR a court order authorizing such examination, assuming that
they were involved in cases of bribery or dereliction of duty of
public officials, or in a case where the money deposited or
invested was itself the subject matter of the litigation.

Please read the original for the other issues aside from Art. 3,
(j) Knowingly approving or granting any license, permit, privilege
or benefit in favor of any person not qualified for or not legally 22.
entitled to such license, permit, privilege or advantage, or of a 4
Section 11. Authority to inquire into Bank Deposits.
mere representative or dummy of one who is not so qualified or
Notwithstanding the provisions of Republic Act No. 1405, as
entitled.
amended; Republic Act No. 6426, as amended; Republic Act No.
2
(e) Causing any undue injury to any party, including the 8791, and other laws, the AMLC may inquire into or examine any
Government, or giving any private party any unwarranted benefits, particular deposit or investment with any banking institution or
advantage or preference in the discharge of his official non-bank financial institution upon order of any competent court in
administrative or judicial functions through manifest partiality, cases of violation of this Act when it has been established that
evident bad faith or gross inexcusable negligence. This provision there is probable cause that the deposits or investments involved
shall apply to officers and employees of offices or government are in any way related to a money laundering offense: Provided,
corporations charged with the grant of licenses or permits or other That this provision shall not apply to deposits and investments
concessions.
made prior to the effectivity of this Act.

POLITICAL LAW REVIEW | ATTY. JACK JIMENEZ | MARK JOREL O. CALIDA

The passage of the AMLA stripped another layer off the

rule on absolute confidentiality that provided a measure
of lawful protection to the account holder. The
application of the bank inquiry order as a means of
inquiring into transactions entered into prior to the
passage of the AMLA would be constitutionally infirm,
offensive as to the ex post facto clause.
NEVERTHELESS, the argument that the prohibition
against ex post facto laws goes as far as to prohibit any
inquiry into deposits in bank accounts OPENED prior to
the effectivity of the AMLA even if the TRANSACTIONS
were entered into when the law had already taken effect
cannot be sustained. This argument will create a
loophole in the AMLA that would result to further money
laundering. It is hard to presume that Congress intended
to enact a self-defeating law in the first place, and the
courts are inhibited from such a construction by the
cardinal rule that a law should be interpreted with a
view to upholding rather than destroying it.

POLITICAL LAW REVIEW | ATTY. JACK JIMENEZ | MARK JOREL O. CALIDA