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What a mess the whole impeachment process is turning out to be. And, we already know that, to date, there are not enough Senators who will vote to impeach. Or so the political pundits imply. To convict the Chief Justice, the vote of 16 Senators is needed. Let us see if the continuing whirl of media attacks and counter-attacks will make any dent on the voting thus far. Of course, voting on respecting the temporary restraining order issued by the Supreme Court is not the same as voting to acquit or to convict, ha. So those against impeachment should not celebrate just yet, as many pro-impeachment people believe that this "second envelope" scenario manifests "guilt".
So, what is an FCDU account? It is a bank account where you deposit your US dollars, basically. Section 8 of R.A. 6426 provides:
Secrecy of foreign currency deposits. – All foreign currency deposits authorized under this Act, as amended by PD No. 1035, as well as foreign currency deposits authorized under PD No. 1034, are hereby declared as and considered of an absolutely confidential nature and, except upon the written permission of the depositor, in no instance shall foreign currency deposits be examined, inquired or looked into by any person, government official, bureau or office whether judicial or administrative or legislative, or any other entity whether public or private; Provided, however, That said foreign currency deposits shall be exempt from attachment, garnishment, or any other order or process of any court, legislative body, government agency or any administrative body whatsoever. (As amended by PD No. 1035, and further amended by PD No. 1246, prom. Nov. 21, 1977.)
How has the Supreme Court treated the law that allows the opening of an FCDU? I was referred to the case of Joseph E. Estrada [yup, President Erap] vs. Hon. Aniano A. Desierto [yup, then the Ombudsman]. This case was decided in 2004, en banc, and written by a now retired Justice.
Apparently the BIR in 2001 placed President Erap's foreign currency deposit account at Citibank Greenhills Branch under constructive distraint: which is simply the seizure and holding of property as security for payment of a debt or satisfaction of a claim.
In issuing the distraint, the BIR was apparently moved by the huge disparity of Erap's income as declared by him in his Annual Income Tax Return, and the amount of his income as established in the impeachment trial, which was said to be concealed under fictitious name. In addition, there were various news reports about the plan of Erap to flee the country bringing with him the money he amassed during his presidency.
Erap sued the BIR personnel for anti-graft atbp. In relevant part, Erap complained about the violation of Section 8 of R.A. 6426 as cited earlier.
The BIR argued that, in a 1997 case, the Highest Tribunal adopted the opinion of the Office of the Solicitor General (OSG) that only foreign currency deposits of foreign lenders and investors are given protection and incentives by the law. Thus, foreign currency deposits of Filipino depositors, including Erap's, are not covered by the Foreign Currency Deposits Act, and are not exempt from the processes duly-issued by the BIR, because the protection is apparently only for only non-residents who are not engaged in trade and business.
The Supreme Court did not argue anymore with the BIR stance as this case was actually about the jurisdiction of the Ombudsman. However, the Supreme Court had a final "cautionary word".
The Court said that, assuming the BIR was wrong to rely on the 1997 case and on a "whereas" clause of the law, "this Court, on petition for certiorari, cannot correct the same as the error is not of a degree that would amount to a clear case of abuse of discretion of the grave and malevolent kind. It is axiomatic that not every erroneous conclusion of law or fact is abuse of discretion."
Hmmm... So, does this mean that the PSBank petition upon which the present TRO was issued will be the "proper case" for the Supreme Court to make a definitive ruling on the FCDU law that considers FCDU accounts as absolutely confidential?
Please send in your questions, if any, through firstname.lastname@example.org. I will not answer personally, OK? However, if the question or situation is interesting, I may write about it in this space. Till next time.