The Supreme Court (SC) of the Philippines has drawn a sharper legal boundary in the fight against money laundering, handing down a landmark decision that affirms the Court of Appeals’ (CA) authority to issue freeze orders not only on the main assets of suspected individuals but also on related accounts. The key condition: probable cause must be clearly established, and due process must be strictly observed.
⚖️ Legal Power to Freeze Related Accounts
In a full-bench decision penned by Associate Justice Japar B. Dimaampao, the SC gave full backing to Section 10 of Republic Act No. 9160, better known as the Anti-Money Laundering Act (AMLA). While the law itself doesn’t spell out the term “related accounts,” the Court clarified that such accounts fall under the broader phrase “monetary instrument or property related to unlawful activity.”
This ruling is especially crucial in high-profile financial crime investigations, such as the case involving former Vice President Jejomar Binay, where allegations of corruption and plunder led to the freezing of assets not just under his name, but also those linked to his family members and close associates.
The Anti-Money Laundering Council (AMLC) sought the CA's approval to freeze these related financial assets, which allegedly formed part of a money trail linked to illicit public transactions.
🔍 Why Related Accounts Matter in Money Laundering Cases
The Court noted that money laundering schemes are often executed through a network of accounts to conceal the origin of unlawful proceeds. Allowing freeze orders to extend to related accounts helps prevent suspects from shielding criminal assets behind legal loopholes or unsuspecting individuals.
Still, the SC was keen to emphasize that innocent account holders must be protected. A key requirement is the identification of related accounts in the AMLC’s petition, accompanied by the specific amounts involved. Vague or overly broad freeze requests won’t hold up in court.
🛡️ Built-in Safeguards for Account Holders
To prevent abuse and uphold constitutional rights, the Supreme Court laid down a framework of protections for people whose accounts may get caught in a freeze order:
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The AMLC must specify if its freeze order application includes related accounts, with proper description and value.
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The Court of Appeals must independently assess probable cause, ensuring each account’s connection to the unlawful activity is justified.
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The freeze cannot exceed the amount tied to the suspicious activity; it cannot be a blanket order.
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The freeze takes immediate effect for 20 days, but a summary hearing must be held within this period, with both parties given the opportunity to be heard.
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After the hearing, the freeze order may be extended for up to six months or lifted, depending on findings.
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If no formal case is filed within the specified timeframe, the freeze order is automatically lifted.
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Individuals affected by the freeze may access reasonable amounts from their funds to cover living expenses, legal counsel, and medical needs.
🧩 Balancing Anti-Crime Efforts With Constitutional Rights
This decision underscores the SC's intention to strike a balance between effective enforcement of the Anti-Money Laundering Law and the protection of individual rights under the Philippine Constitution, particularly the right to privacy and freedom from unreasonable searches and seizures.
As financial crimes become increasingly sophisticated, the judiciary is adapting its interpretation of the law to prevent the use of relatives, shell accounts, and secondary wallets to hide criminal proceeds.
The ruling affirms that due diligence and transparency must guide both AMLC applications and judicial issuance of freeze orders. When properly handled, the inclusion of related accounts can serve as a potent legal tool — without trampling on the rights of the innocent.