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Secrecy of Bank Deposits (R.A. 1405) : and Other Financial Institutions As Absolutely Confidential in Nature
Secrecy of Bank Deposits (R.A. 1405) : and Other Financial Institutions As Absolutely Confidential in Nature
1405)
4. Coverage of secrecy of bank deposits (What are covered in the secrecy law?)
The Secrecy of bank deposits covers all deposits of whatever nature with banks or banking institutions in
the Philippines including investments in government bonds. These are all absolutely confidential in nature and
may not be examined, inquired or looked into by any person, government official, bureau or office.
Political subdivisions - a unit of government created by and under the authority of a higher level of government
such as provinces, cities, municipalities, and barangays.
NEW EXCEPTIONS:
1. Anti-Graft and Corrupt Practices Act - in cases of unexplained wealth shall be taken into consideration in the
enforcement of secrecy of bank deposit law notwithstanding any provision of the law to the contrary
- Warrants examination of bank records not only in the name of respondent’s spouse, ascendants,
descendants, relatives but also other persons
- Need to apply for court order
Requisites:
1. There is already a case pending in court;
2. The inspection is limited to the subject matter of the pending case; and
2. Monetary board - (#6)
a. When there is danger of bank fraud
b. Independent auditors audits banks
3. NIRC
a. Under international tax treaties to exchange information with the treaty
b. Upon inquiry by the Commissioner of Internal Revenue in an application for compromise of tax liability
(written waiver is required) or determination of a decedent’s gross estate;
4. AMLA
a. Upon examination of the Anti-Money Laundering Council (AMLC) pursuant to a court order, where
there is probable cause that the deposits are related to an unlawful activity or money laundering offense;
b. Upon examination of the AMLC without a court order, where there is probable cause that the deposits
are related to certain crimes such as kidnapping for ransom, violation of the Dangerous Drugs Act,
hijacking, destructive arson, murder and violations of RA 6235 (acts inimical to civil aviation);
c. In connection with terrorism case (similar w/ a?)
5. PDIC Charter (as well as BSP)
a. These agencies may inquire into or examine deposit accounts and all information relating to bank
deposits in cases there is a finding of UNSAFE or UNSOUND BANKING PRACTICES.
6. NEW EXCEPTION (may also fall under NIRC)
a. Information requested by Foreign countries, only in the bases of formal request course through the BIR
and when all the procedural requirements have been complied with, the BIR Commissioners authorized
to look into the bank deposits and other related information of certain taxpayers in banks and financial
institutions
7. BSP
a. Upon examination of the Bangko Sentral in the course of its periodic or special examination regarding
compliance with Anti-Money Laundering Law.”
What is prohibited under the law: DISCLOSURE OF OR INQUIRY INTO, OF DEPOSITS WITH ANY BANKING
INSTITUTION
1. It is unlawful for any official or employee of a banking institution to disclose to any person any information
concerning bank deposits
NOTES:
Garnishment: Bank accounts may be garnished by the creditors of the depositor. In garnishment, there is no
violation of the bank secrecy law since the amount of the deposit is not actually disclosed.
Purpose of RA 6426: To encourage foreign currency deposits in order to beef up the country’s international
reserves.
Process exemption should be distinguished from confidentiality clause. Exemption from confidentiality does necessarily
translate to exemption from processes.
FDC:
The SC, in the case of Salvacion vs Central Bank, provided for another exception, on grounds of equity, when deposits
of a foreign transient can be proceeded against to prevent injustice.
Destructive Arson
The acts committed under Art. 320 of The Revised Penal Code constituting Destructive Arson are characterized as
heinous crimes "for being grievous, odious and hateful offenses and which, by reason of their inherent or
manifest wickedness, viciousness, atrocity and perversity are repugnant and outrageous to the common
standards and norms of decency and morality in a just, civilized and ordered society." On the other hand, acts
committed under PD 1613 constituting Simple Arson are crimes with a lesser degree of perversity and viciousness that
the law punishes with a lesser penalty. In other words, Simple Arson contemplates crimes with less significant social,
economic, political and national security implications than Destructive Arson.