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Flashcards in RFBT - BANK SECRECY LAW Deck (16)
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1
Q

What is the purpose of the Bank Secrecy Law?

A

RA 1405 aka Bank Secrecy Law on Domestic Bank Deposits - To encourage people to deposit their money in banking institutions and to discourage private hoarding so that the same may be properly utilized by banks in authorized loans to assist in the economic development of the country.

2
Q

What are the acts prohibited by the Bank Secrecy Law?

A
  1. ) Examination and inquiry or looking into all deposits of whatever nature.
  2. ) Disclosure by any official or employee of a banking institution to any unauthorized person of any information concerning said deposits.
3
Q

What is the coverage of the Bank Secrecy Law?

A

All deposits of whatever nature in banks or banking institutions in the Philippines and investments in government bonds are ABSOLUTELY CONFIDENTIAL IN NATURE.

  1. ) All deposits of whatever nature with banks or banking institutions in the Philippines.
  2. ) Investments in bonds issued by the Government of the Philippines, its political subdivision and its instrumentalities.
4
Q

What is the General Rule of the Bank Secrecy Law? What are the exceptions?

A

GR: Bank deposits are hereby considered as of an ABSOLUTELY CONFIDENTIAL NATURE and MAY NOT BE EXAMINED/INQUIRED/LOOKED INTO in any person, government official, bureau, or office.

EXCEPTIONS

1.) Under the Bank Secrecy Law

a.) Written permission of the depositor
b.) In cases of IMPEACHMENT
c.) By ORDER OF A COMPETENT COURT in cases of
BRIBERY or DERELICTION OF DUTY OF PUBLIC
OFFICIALS.
d.) Cases where the MONEY DEPOSITED/INVESTED IS THE SUBJECT MATTER OF A LITIGATION. THE MONEY DEPOSITED SHOULD BE THE VERY THING IN DISPUTE

  1. ) Under the Tax Code
    a. ) Authority of the Commissioner of Internal Revenue to DETERMINE THE GROSS ESTATE of the deceased.
    b. ) Waiver in writing, if the TAXPAYER HAS FILED AN APPLICATION FOR COMPROMISE OF HIS TAX LIABILITY.
    c. ) Request for tax information of specific taxpayers made by a foreign tax authority pursuant to tax treaties under the Exchange of Information on Tax Matters of 2009
  2. ) Under Graft and Corrupt Practice Act - Deposits of public officials, his spouse and unmarried children
  3. ) Under AMLA
    a. ) Upon order of a competent court

b.) Cases wherein no court order required
- Kidnapping
- Violation of Comprehensive Dangerous Drug Act of
2002
- Hijacking
- Felonies/Terrorism/Financing of Terrorism
- destructive arson and murder

5.) Under Unclaimed Balance Law

Disclosing to the Treasurer of the Philippines for DORMANT DEPOSITS for at least 10 years and those of who are known to be dead.

  1. ) Order of garnishment to insure the satisfaction of judgment.
  2. Bangko Sentral - inquire/examine accounts to ensure compliance with AMLA
  3. PDIC - inquire/examine accounts when there are findings of unsafe/unsound banking practices.
  4. New Central Bank Act - Directors/officials/stockholders and related interests who contract a loan/other forms of financial accommodation are required to execute a WRITTEN WAIVER OF SECRECY OF DEPOSITS.
  5. Ombudsman has the power to issue subpoena and subpoena duces tecum and inquire on bank accounts and records when:
    a. there is a case pending before a court of competent jurisdiction
    b. account is clearly identified
    c. inspection must be limited to the subject matter of the case
    d. bank personnel and account holder must be notified of the inspection
  6. Court of Appeals - in cases of anti-terrorism
  7. Commission on Audit - authorized to examine government deposits
  8. Presidential Commission on Good Governance
5
Q

What is the penalty imposed for violation of Bank Secrecy Law?

A

Imprisonment of NOT MORE THAN 5 YEARS OR A FINE OF NOT MORE THAN PHP 20,000 OR BOTH at the discretion of the court.

6
Q

T or F
The General Banking Law prohibits bank directors, officers, employees or agents from disclosing to any unauthorized person, without order of a competent court, any information relative to funds or properties belonging to private individuals/corporations/other entities.

A

True

7
Q

T or F
The Thrift Banks Act and the Rural Banks Act prohibit any bank officer/employee/agent from disclosing any information on such funds or properties

A

True.

8
Q

Who are liable under the Bank Secrecy Law on Domestic Bank deposits?

A
  1. Any person or government official who, or any government bureau or office that examines, inquires or looks into a bank deposit or government bond investment in any of the instances not allowed in Section 2.
  2. Any official or employee of a banking institution who makes a disclosure concerning bank deposits to another in any instance not allowed by law
  3. Any person who commits a violation of any of the provisions of the law
  4. Any bank official, director, employee, or agent who discloses information relative to funds or properties in the custody of the bank may also be held liable under the applicable provisions of the General Banking Law/ Thrift Banks and Rural Banks Act.
9
Q

What are the instances wherein disclosures are authorized by responsible bank officials?

A
  1. Reporting of unclaimed balances to the Treasurer of the Philippines
  2. Turn-over to the CIR the amount in the bank that may be sufficient to satisfy the writ of garnishment issued to collect delinquent taxes
  3. Writs of garnishment is the satisfaction of a judgment
  4. Disclosure by bank officer upon order of the court in connection with a deposit in a closed bank that was used in the perpetration of anomalies.
10
Q

RA 6426 is also known as?

A

Foreign Currency Deposit Act of the Philippines or Foreign Currency Deposit Secrecy Law

11
Q

RA 1405 is also known as?

A

An Act Prohibiting Disclosure of or Inquiry Into Deposits With Any Banking Institution or Bank Secrecy Law on Domestic Bank Deposit

12
Q

T or F
All foreign currency deposits are absolutely confidential and cannot be examined/inquired/looked into by any person/government official/bureau/office whether judicial or administrative or legislative, or any other private or public entity.

A

True

13
Q

T or F
Foreign currency deposits are exempt from attachment, garnishment, or any other order or process of any court, legislative/administrative body or government agency.

A

True.

14
Q

Who are liable under the Foreign Currency Deposit Secrecy Law?

A
  1. Any person or government official who, or any government bureau or office that examines, inquires or looks into a foreign currency deposit without the written permission of the depositor
  2. Any official or employee of a banking institution who makes a disclosure concerning foreign currency deposits to another in any instance not allowed by law
  3. Any one who shall attach/garnish/subject the foreign currency deposit to any other order or process of court, legislative/administrative body or government agency.
  4. Any person who commits a willful violation of any
    he Monetary Board
15
Q

What is the General Rule of the Foreign Currency Deposit Secrecy Law? What are the exceptions?

A

Same with Domestic Deposits (card 4) Except for Public Officials, Court of Appeals, and Ombudsman subpoena.

16
Q

What is the penalty for violation of Foreign Currency Deposit Secrecy Law?

A

Imprisonment of NOT LESS THAN 1 YEAR BUT NOT MORE THAN 5 YEARS OR FINE OF NOT LESS THAN 5000 BUT NOT MORE THAN 25000 OR BOTH

Sanctions may also be imposed on banks or any bank director/officer:

a. Revocation of authority of bank to accept new foreign currency deposits
b. administrative sanctions under the New Central Bank Act