In Intengan v. Court of Appeals, the Supreme Court addressed the legality of disclosing bank records in a corporate dispute. The Court ruled that because the deposits in question were U.S. dollar accounts, Republic Act No. 6426, or the Foreign Currency Deposit Act, governed their confidentiality, not Republic Act No. 1405. Under RA 6426, disclosure is only permissible with the depositor’s written consent. Although the disclosure was found to be a violation of RA 6426, the prescriptive period for filing the correct charges had already lapsed, barring prosecution.

Unveiling Dollar Deposits: When Bank Secrecy Collides with Corporate Misconduct

The case arose from a complaint filed by Citibank against two of its officers, Dante L. Santos and Marilou Genuino, for violating the Corporation Code. Citibank alleged that Santos and Genuino had diverted bank clients’ funds to companies in which they had a personal financial interest. As evidence, Citibank submitted an affidavit from Vice-President Vic Lim, which included bank records of several clients, including petitioners Carmen Ll. Intengan, Rosario Ll. Neri, and Rita P. Brawner. The petitioners, whose dollar deposits were disclosed without their consent, filed complaints against Citibank officers for violating the Bank Secrecy Law, Republic Act No. 1405.

The Department of Justice (DOJ) initially directed the filing of informations against the private respondents, but later reversed its decision and ordered the withdrawal of the informations. The Court of Appeals sustained the DOJ’s resolution, arguing that the disclosure was necessary to establish the violation of the Corporation Code and fell under an exception to the Bank Secrecy Law. This ruling prompted the petitioners to seek recourse from the Supreme Court.

However, the Supreme Court found that the lower courts and the DOJ erred in applying Republic Act No. 1405. The Court emphasized that because the deposits in question were U.S. dollar accounts, the applicable law was Republic Act No. 6426, also known as the “Foreign Currency Deposit Act of the Philippines.” Section 8 of RA 6426 provides that all foreign currency deposits are considered absolutely confidential and shall not be examined or inquired into by any person, government official, or entity without the written permission of the depositor.

Sec. 8. Secrecy of Foreign Currency Deposits.– All foreign currency deposits authorized under this Act, as amended by Presidential Decree No. 1035, as well as foreign currency deposits authorized under Presidential Decree 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 such 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.

The Court noted that under R.A. No. 6426, there is only one exception to the secrecy of foreign currency deposits: disclosure is allowed only upon the written permission of the depositor. It was admitted that private respondents Lim and Reyes disclosed details of petitioners’ dollar deposits without the latter’s written permission.

Building on this principle, the Supreme Court explained that a case for violation of Republic Act No. 6426 should have been brought against the private respondents. Disclosing the dollar deposits of petitioners absent their written permission is considered as malum prohibitum. However, despite the apparent violation of RA 6426, the Court also addressed the issue of prescription. Applying Act No. 3326, the prescriptive period for the offense is eight years. Since the disclosure occurred in 1993, and the correct charges were not filed within eight years from the discovery of the disclosure, the Court ruled that prescription had already set in, barring any criminal prosecution.

While the initial filing of a complaint for violation of Republic Act No. 1405 could have tolled the prescriptive period, the court was explicit that it is the filing of the complaint or information corresponding to the correct offense which produces that effect. This finding left petitioners with no legal remedy.

Therefore, the Court emphasized the importance of awareness of laws, especially those concerning the confidentiality of bank deposits. Despite this, the Supreme Court ultimately denied the petition because the prescriptive period for filing the correct charges under Republic Act No. 6426 had already lapsed.

FAQs

What was the key issue in this case?	The key issue was whether the disclosure of the petitioners’ U.S. dollar deposits without their written consent violated bank secrecy laws, specifically Republic Act No. 1405 (Bank Secrecy Law) or Republic Act No. 6426 (Foreign Currency Deposit Act).
Which law applies to foreign currency deposits in the Philippines?	Republic Act No. 6426, also known as the Foreign Currency Deposit Act, governs the secrecy of foreign currency deposits in the Philippines. It provides that such deposits are absolutely confidential.
What is the exception to the secrecy of foreign currency deposits under RA 6426?	The sole exception is when the depositor gives written permission for the disclosure of their foreign currency deposit information.
Why was Republic Act No. 1405 not applicable in this case?	Republic Act No. 1405, or the Bank Secrecy Law, applies to regular bank deposits but does not govern foreign currency deposits, which are covered by Republic Act No. 6426.
What is the prescriptive period for violations of Republic Act No. 6426?	Based on Act No. 3326, which governs prescription for special laws, violations of Republic Act No. 6426 prescribe in eight years.
When does the prescriptive period begin to run for violations of RA 6426?	The prescriptive period begins to run from the day of the commission of the violation, or if the violation is not known at the time, from the discovery of the violation.
Why was the case dismissed despite a potential violation of Republic Act No. 6426?	The case was effectively dismissed because the prescriptive period for filing the correct charges under Republic Act No. 6426 had already lapsed, as the violation occurred more than eight years before the correct offense was raised.
What is the penalty for violating Republic Act No. 6426?	A violation of Republic Act No. 6426 may result in imprisonment of not less than one year nor more than five years, or by a fine of not less than five thousand pesos nor more than twenty-five thousand pesos, or both.

The ruling in Intengan v. Court of Appeals underscores the stringent confidentiality standards for foreign currency deposits in the Philippines and serves as a reminder of the importance of filing the correct charges within the prescribed period. It highlights the need for parties to understand the specific laws governing different types of bank deposits and to seek appropriate legal advice in cases involving potential violations of bank secrecy.

For inquiries regarding the application of this ruling to specific circumstances, please contact ASG Law through contact or via email at frontdesk@asglawpartners.com.

Disclaimer: This analysis is provided for informational purposes only and does not constitute legal advice. For specific legal guidance tailored to your situation, please consult with a qualified attorney.
Source: CARMEN LL. INTENGAN, ROSARIO LL. NERI, AND RITA P. BRAWNER vs. COURT OF APPEALS, DEPARTMENT OF JUSTICE, AZIZ RAJKOTWALA, WILLIAM FERGUSON, JOVEN REYES, AND VIC LIM, G.R. No. 128996, February 15, 2002