Secrecy of Bank Deposits (Bank Secrecy Law)

Special Laws

Purpose of Bank Secrecy Law

Purpose of Bank Secrecy Law

It hopes to discourage private hoarding of money and encourage the people to deposit their money in banking institutions, so that it may be utilized by way of authorized loans and thereby assist in economic development.

Deposits Covered

1. All deposits of whatever nature with banking institutions in the Philippines, including Trust Accounts.

2. Investments in bonds issued by the Government of the Philippines, its political subdivisions and its instrumentalities

Prohibited Acts (General Rule)

1. For the bank or any official or employee, to disclose to any person other than a bank director, official or employee authorized by the bank, any information concerning deposits.

2. Any person, including the government to inquire, examine or look into bank deposits or bonds issued by the government.

In essence, G.R. no one has permission to look into bank details

Exceptions to the Prohibited Acts in BSL (For Peso Deposits)

1. A written permission from the depositor (waiver)

2. In impeachment cases

3. Upon order of court in (a) bribery, dereliction of duty, plunder cases; (b) money deposited is the subject of litigation; (c) unexplained wealth under the Anti-Graft and Corrupt Practices Act;

4. Upon inquiry of BIR Commissioner for purposes of determining net estate of a deceased depositor

5. Probable money laundering, upon order of court or the AMLC

6. In rendering reports for (a) Disclosure to the Treasurer of the PH for unclaimed balances; and (b) report of banks to AMLC of covered and/or suspicious transactions

7. Ombudsman has the power to issue subpoena on the deposit information of a government official, and examine and access bank accounts and records

8. Upon order of the Court of Appeals, examination by law enforcement officers in terrorism cases

9. Examination made by: Monetary Board of BSP, PDIC, COA, Presidential Commission on Good Government

10. Examination is made by an independent auditor hired by the bank to conduct its regular audit, provided that the results shall be exclusive to the bank

Exceptions to the Prohibited Acts in BSL (For Foreign Deposits)

1. Written permission from the depositor

2. Under AMLA, when there is probable cause that the deposit is related to an unlawful activity

3. Under the Human Security Act, existence of probable cause in anti-terrorism cases and those persons charged or suspected of the crime of terrorism, and outlawed terrorist organizations

4. Examinations conducted by the BSP, PDIC, PCGG, and COA

Who may be removed from office by impeachment?

1. President

2. Vice-President

3. Members of Supreme Court

4. Members of Constitutional Commission

5. Ombudsman

GARNISHMENT

is the act of attaching a payable or bank account or money in satisfaction of an obligation or payment of an obligation

Is there a violation of the BSL in garnishment? why? why not

No, because the creditor can only inquire up to the extent of the debt

Deposits exempt from garnishment

1. Foreign currency deposits

2. Those exempt under Rules Of Court

Type of Diligence of Banks

Extraordinary diligence

How can the deposit help the economy

The money rolls in the economy by means of deposits

Can a private individual be held liable under the BSL?

Yes, if the act was prohibited

Ombudsman

Prosecutes Government Officials only, not private