STOLEN ASSET RECOVERY

presented by

EFFORTS IN THE PHILIPPINES

JULIA C. BACAY-ABAD
Deputy Director Head, Legal Services Group Anti-Money Laundering Council Secretariat

UN Convention against Corruption (UNCAC)

9 December 2003 Philippines signed 8 November 2006 Philippines ra<ed

Entry into Force: 14 December 2005

UNCAC
Legal Architecture: Preven<on - establishment of an<-corrup<on bodies
- establishment of Financial Intelligence Units (FIUs)

Criminaliza<on Interna<onal Coopera<on Asset Recovery

Asset Recovery under the UNCAC

- The return of assets pursuant to Chapter 51 is a fundamental principle of UNCAC;

- States par<es shall aord one another the widest measure of coopera<on and assistance in that regard.

 UNCAC
Art. 31. Freezing, seizure and consca<on

1. Each state party shall take, to the greatest extent possible within its domes<c legal system, such measures as may be necessary to enable consca<on of: (a)Proceeds of crime derived from oenses established in accordance with UNCAC; (b)Property, equipment or other instrumentali<es used in or des<ned for use in oences established in accordance with UNCAC

Art. 31, UNCAC

2. Each State Party shall take such measures as may be necessary to enable the iden<ca<on, tracing, freezing or seizure of any item referred to in par. 1 (Ar<cle 31) for the purpose of eventual consca<on.

Asset Recovery Statutes in the Philippines Republic Act No. 1379 Forfeiture of Unexplained Wealth of govt ocials and employees

Republic Act No. 9160 An<-Money Laundering Act of 2001, as amended

R.A. 1379
An Act Declaring Forfeiture in Favor of the State of Any Property Found to Have Been Unlawfully Acquired by Any Public Ocer or Employee and Providing for the Proceedings Therefor Enacted on 18 June 1955

Introduced the rst civil forfeiture statute

Oce of the Ombudsman prosecutes

R.A. 9160
- The An<-Money Laundering Act (AMLA) of 2001

- took eect on 17 October 2001

R.A. 9160, as amended

5 March 2003 - R.A. 9160 was amended by R.A. 9194 7 September 2003 - Revised Implemen<ng Rules and Regula<ons (RIRRs) took eect.

Salient Features of R.A. 9160, as amended

Criminalized money laundering in the Philippines Created the Philippines FIU (AMLC) Introduced civil forfeiture without the necessity of convic<on or prosecu<on in a criminal case

Relevant Terms

Money Laundering
is a crime whereby the proceeds of an unlawful ac<vity as dened in the AMLA are transacted thereby making them appear to have originated from legi<mate sources (Sec. 4, AMLA, as amended)

Unlawful Activity under the AMLA--- is any act or omission or a series or combina/on thereof involving or having direct rela/on to any of the following oenses: 1. Kidnapping for ransom 2. Drug tracking and other viola<ons of the Comprehensive Dangerous Drugs Act of 2002

Unlawful activity
3. Graf and Corrup<on under R.A. No. 3019, as amended 4. Plunder (R.A. 7080, as amended) 5. Robbery and Extor<on 6. Jueteng and Masiao (P.D. 1602) 7. Piracy (RPC & PD 532) 8. Qualied Thef under Art. 310, RPC

Unlawful activity
9. Swindling under Art. 315, RPC

10. Smuggling under RA 455 & 1937

11. Viola<ons of the Electronic Commerce Act of 2000

12. Hijacking, destruc<ve arson and murder, including those perpetrated by terrorists against non-combatant persons and similar targets

Unlawful activity
13.

Fraudulent prac<ces and other viola<ons of the Securi<es Regula<on Code of 2000 (RA 8799)

14. Felonies or oenses of a similar nature that are punishable under the penal laws of other countries

Civil Forfeiture under the AMLA, as amended

Sec. 7. Crea<on of An<-Money Laundering Council.
x x x. The AMLC shall act unanimously in the discharge of its func<ons as dened hereunder:
x x x x x x x x x (3) to ins<tute civil forfeiture proceedings and all other remedial proceedings through the Oce of the Solicitor General; x x x x x x x x x (6) to apply before the Court of Appeals, ex parte, for the freezing of any monetary instrument or property alleged to be proceeds of any unlawful ac<vity as dened in Sec<on 3(i) of the AMLA

 Sec. 12. Forfeiture Provisions.

Sec<on 12 of the AMLA, as amended

(a) Civil Forfeiture. When there is a covered transac<on report made, and the court has, in a pe<<on led for the purpose ordered seizure of any monetary instrument or property, in whole or in part, directly or indirectly, related to said report, the Revised Rules of Court on civil forfeiture shall apply.

Supreme Court action

January 2005 - upon the request of the An<- Money Laundering Council, the Supreme Court tasked the Commikee on the Revision of the Rules of Court chaired by Jus<ce Reynato S. Puno to draf the Rule of Procedure in Cases of Civil Forfeiture.

 15 November 2005 - the Supreme Court adopted the Rule prescribing the procedure in cases of civil forfeiture. A.M. No. 05-11-04-SC, otherwise known as Rule of Procedure in Cases of Civil Forfeiture, Asset Preserva/on, and Freezing of Monetary Instrument, Property, or Proceeds Represen/ng, Involving, or Rela/ng to an Unlawful Ac/vity or Money Laundering Oense under R.A. No. 9160, as Amended 15 December 2005 - eec/vity of the Rule, following its publica/on in a newspaper of general circula/on.

Rule on Civil Forfeiture

2 Parts

1. Pe<<on for Civil Forfeiture 2. Pe<<on for Freeze Order

Definition
Civil forfeiture may be dened as the seizure and consca<on of any monetary instrument or property, in whole or in part, directly or indirectly, involved in or related to an unlawful ac<vity under Sec<on 3(i) or a money laundering oense under Sec<on 4, Republic Act No. 9160, as amended.

Assets that may be forfeited

Any monetary instrument, property, or proceeds represen<ng, involving, or rela<ng to an unlawful ac<vity or a money laundering oense under R.A. 9160, as amended. (Sec. 1)

Petition for Civil Forfeiture

Sec. 2. Party to ins<tute proceedings. Ac<on in the name of the Republic of the Philippines (RP) Represented by the An<-Money Laundering Council (AMLC) Through the Oce of the Solicitor General (OSG)

Venue of Civil Forfeiture

Sec. 3. A pe11on for civil forfeiture shall be led: i) in any RTC of the judicial region where the monetary instrument, property, or proceeds are located;

ii) if all or any por/on of the monetary instrument, property, or proceeds is located outside the Philippines, the pe//on may be led in the RTC in Manila or of the judicial region where any por/on of the monetary instrument, property, etc. is located, at the op<on of the pe<<oner.

Provisional Remedies
Sec. 11. Ex-parte issuance of Provisional Asset Preserva<on Order (PAPO)

-PAPO is issued upon determina<on of probable cause that the monetary instrument or property is related to an unlawful ac<vity; - based on the allega<ons of the veried pe<<on; - eec<ve immediately for 20 days (from date of service to respondents)

Provisional Asset Preservation Order (PAPO)

- Court order forbidding any transac<on, withdrawal, deposit, transfer, removal, conversion, concealment or other disposi<on of the subject monetary instrument, property or proceeds

Asset Preservation Order (APO)

- within the 20-day period of PAPO, summary hearing shall be conducted; - Respondent may show good cause why PAPO should be lifed; - Court may modify or lif PAPO; otherwise, shall issue APO.

Order of Trial
Pre-Trial (Mandatory) Trial Judgment (Order of Forfeiture) (Appeal)

Important!
No prior criminal charge, pendency of, or convic<on for an unlawful ac<vity or money laundering oense is necessary for the commencement or the resolu<on of a pe<<on for civil forfeiture. (Sec. 27)

Judgment
Sec. 32. The court shall render judgment within thirty (30) days from submission of the case for resolu<on. - Preponderance of evidence

Claims against forfeited assets

Within 15 days from date of nality of order of forfeiture

Any party who has not been impleaded nor intervened, claiming an interest in the property Shall le veried pe<<on for declara/on that the property legi/mately belongs to him Otherwise, order of forfeiture becomes executory

Petition for Freeze Order

Sec. 44. - Veried pe<<on; in the name of RP, rep. by AMLC; thru OSG

- Filed before the Court of Appeals

- Ex parte

Action by the Court of Appeals

- Within 24 hours afer ling;

- Issue freeze order upon determina<on of probable cause, based on allega<ons of the pe<<on, that the property or proceeds are in any way related to an unlawful ac<vity.

Freeze order
Eec<ve immediately for 20 days

On mo<on by the AMLC, may be extended for a period not exceeding six (6) months

SC Ruling
M/Gen. Carlos Garcia vs. CA, G.R. No. 165800; 27 Nov. 2007

Nothing in RA 9160 requires that a case for viola/on of an/-money laundering laws must be led before the issuance of a freeze order. X x x. There are only two requisites under the law for the issuance of the freeze order: (1) the applica/on ex parte by the AMLC; and (2) the determina/on of probable cause by the CA.

SC Ruling
Republic vs. Glasgow Credit & Collec<on Services, Inc., et al. G.R. No. 170281; 18 Jan. 2008

x. As an ac/on in rem, it is a proceeding against the thing itself instead of against the person. In ac/ons in rem or quasi in rem, jurisdic/on over the person of the defendant is not a prerequisite to conferring jurisdic/on on the court, provided that the court acquires jurisdic/on over the res. x x x.

Forfeiture proceedings are ac/ons in rem. x x

AMLC Sta<s<cs
As of February 2012

Civil Forfeiture Cases

No. of Cases Amount Involved

Pending trial in court Decided Cases Proceeds turned over to

the Na<onal Treasury Claimed by Third-Par<es For Execu<on

41 12

P 1,241,209,029.93 (approx.) P 249,406,231.45 (P 109,428,008.46) (P 2,401,568.50) (P 137,576,654.49)

Corruption-related Civil Forfeiture Cases

Unlawful Ac<vity Decided by RTC Amount Involved Pending Trial Amount Involved

Plunder

1 2

P 89.76 M P 8.5 M

2 1

P 408.26 M
P 512,837.46

Graf & Corrup<on

1 pending appeal)

(1 pending MR;

Challenges in Asset Recovery - Lack of Asset Management Regime in the Philippines - Adversarial proceedings in applica<on for bank inquiry

Thank you!
E-mail Julia Bacay Abad jbacay-abad@bsp.gov.ph