Francheska deposited in her current account with Money Bank the amount of PHP 400,000.00 everyday, from Monday to Friday, or a total of PHP 2…

Explanation

The Anti-Money Laundering Act requires covered institutions like Money Bank to report suspicious transactions to the AMLC, which Money Bank did. However, the power to freeze accounts does not lie with the bank or the AMLC alone. Section 10 of the Act clearly states that freezing of monetary instruments or property can only be done upon a verified ex parte petition by the AMLC and after a judicial determination by the Court of Appeals that probable cause exists linking the funds to unlawful activity. This freeze order is a court-issued order, not an administrative directive to the bank.

The AMLC’s role includes investigating suspicious transactions and filing petitions for freeze orders with the Court of Appeals. The bank’s duty is to comply with a freeze order once issued by the court, not to freeze accounts on its own initiative based solely on the AMLC’s report. The Supreme Court in Republic Of The Philippines v. Ongpin emphasized that probable cause for freezing accounts must be judicially determined and that the AMLC must present evidence to the court before a freeze order can be issued. The bank’s unilateral freezing of the account without a court order violates the procedural safeguards against unreasonable searches and seizures.

Application to the facts

Francheska’s deposits totaling PHP 2 million over five banking days were reported by Money Bank as suspicious to the AMLC, which is proper under Section 9 of the Anti-Money Laundering Act. However, the AMLC must still file a verified petition with the Court of Appeals to obtain a freeze order based on probable cause that the funds are related to unlawful activity. There is no indication that such a court order was obtained before Money Bank froze Francheska’s account.

Money Bank’s immediate freezing of the account upon receiving the AMLC’s report was premature and not authorized by law. The bank is required to maintain the account unless and until a court issues a freeze order. Freezing the account without judicial authorization violates the procedural requirements and the constitutional protection against unreasonable searches and seizures. Therefore, Money Bank acted beyond its authority by freezing the account immediately after the AMLC’s report.