ASSET

FORFEITURE
by
ARNOLD G. FRANE
Bank Officer
AMLC Secretariat

Why forfeit?
Forfeiture:
- a form of incapacitation
- a means of recovering for
the
victims
- a form of deterrence
- a form of punishment
2

OBJECTIVES OF
FORFEITURE

To take the criminals profits

To take the facilitating property

that makes the crimes possible

To break the criminal organizations

(criminals commit crime to gain
profit)

To prevent reinvestment of

Kinds of Forfeiture
a) Criminal forfeiture

- Dependent on criminal conviction

- Need jurisdiction over the person of the
accused (in personam)
- Defendant typically must be present

b) Civil forfeiture

- Jurisdiction over the person not required -court must exercise some control over the
property
- Criminal conviction not necessary, can forfeit
property from dead criminals or fugitives
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Philippine laws providing for

Forfeiture (prior to AMLA)
Revised Penal Code

- Under Article 25, forfeiture or confiscation of

instruments and proceeds of the offense is classified as
an accessory penalty which may be imposed after
conviction
-Article 45 provides that every penalty imposed for the
commission of a felony shall carry with it the forfeiture of
the proceeds of the crime and the instruments or tools
with which it was committed.
Such proceeds and instruments or tools shall be
confiscated and forfeited in favor of the Government x x
x but those articles which are not subject of lawful
commerce shall be destroyed.
5

Philippine laws providing for

Forfeiture (prior to AMLA)
R.A. 1379

An Act Declaring Forfeiture in Favor of

the State of Any Property Found to Have Been
Unlawfully Acquired by Any Public Officer or Employee
and Providing for the Proceedings Therefor

Enacted on 18 June 1955

Introduced the first civil forfeiture statute
Provides for civil forfeiture of unlawfully acquired

wealth of a public officer or employee in a civil action

without need of prosecution or conviction in a related
criminal case
6

Philippine laws providing for

Forfeiture (prior to AMLA)
R.A. 6425 The Dangerous Drugs

Act of 1972
- Section 20 provides that every penalty
imposed for the unlawful importation, sale,
administration, delivery, transportation or
manufacture of dangerous drugs x x x shall
carry with it the confiscation and forfeiture,
in favor of the Government, of all the
proceeds of the crime including but not
limited to money and other assets obtained
thereby and the instruments or tools with
which it was committed.
7

R.A. 9165 The Comprehensive Dangerous

Drugs Act of 2002

Repealed R.A. 6425

Took effect on November 27, 2002

Section 20 thereof similarly provides for the

confiscation and forfeiture of the proceeds or

instruments of the unlawful act, including the
properties or proceeds derived from the illegal
trafficking of dangerous drugs and/or precursors
and essential elements.
8

Republic Act No. 9160

Anti-Money Laundering Act of
2001
September 29, 2001 - Congress enacted
R.A. 9160
October 17, 2001 - effectivity of R.A. 9160
March 5, 2003 - Congress enacted R.A.
9194, amending R.A. 9160, which took
effect on March 23, 2003.
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State Policy
Section 2. Declaration of Policy. - It is hereby
declared the policy of the State to protect and
preserve the integrity and confidentiality of
bank accounts and to ensure that the
Philippines shall not be used as a money
laundering site for the proceeds of any
unlawful activity. Consistent with its
foreign policy, the State shall extend
cooperation in transnational investigations
and prosecutions of persons involved in
money laundering activities wherever
committed.
10

R. A. 9160

Salient Features
Introduced to the Philippines legislation

declaring money laundering to be a criminal

offense;

Provided for civil forfeiture as an appropriate

remedy for the seizure and forfeiture to the

State, without the necessity of conviction
or prosecution in a criminal case, of
monetary instrument, property or proceeds
involved in or related to unlawful activity or
money laundering offense as defined in the law.
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R.A. 9160
Provisions on civil forfeiture
Section 7. Creation of Anti-Money Laundering
Council (AMLC). x x x
The AMLC shall act unanimously in the
discharge of its functions as defined
hereunder:
xxx
xxx
xxx
(3) to institute civil forfeiture proceedings
and all other remedial proceedings through
the Office of the Solicitor General.
12

R. A. 9160
Provisions on civil
Section 12forfeiture
. Civil Forfeiture. - When

there is a covered transaction report

made, and the court has, in a petition
filed 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.
13

Civil forfeiture may be defined as

the seizure and confiscation of any
monetary instrument or property, in
whole or in part, directly or indirectly,
involved in or related to a covered
unlawful activity under Section 3(i) or
money laundering offense under
Section 4, Republic Act No. 9160, as
amended.

14

Supreme Court action

January 2005 - upon the request of
the Anti-Money Laundering Council,
the Supreme Court tasked the
Committee on the Revision of the
Rules of Court chaired by Justice
Reynato S. Puno to draft the Rule of
Procedure in Cases of Civil Forfeiture
called for in the law.
15

Supreme Court action

November 15, 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
Preservation, and Freezing of Monetary Instrument,
Property, or Proceeds Representing, Involving, or
Relating to an Unlawful Activity or Money Laundering
Offense under R.A. No. 9160, as Amended

December 15, 2005 - effectivity of the Rule, following

its publication in a newspaper of general circulation.

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Rule of Civil Forfeiture

Includes:

Application for asset preservation

order in the Regional Trial Court

Petition for freeze order in the

Court of Appeals

17

Salient Provisions of the

Rule of Civil Forfeiture
Section 2. Party to institute
proceedings.
Action in the name of the Republic of
the Philippines
Through the Anti-Money Laundering
Council (AMLC)
Represented by the Office of the
Solicitor General
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Basis of Section 2 of the

Rule
i) Section 7(3) of the AMLA - the AMLC
shall institute civil forfeiture
proceedings and all other remedial
proceedings through the Office of the
Solicitor General
ii)The action should be instituted in the
name of the Republic because the law
failed to vest the AMLC with legal
capacity to sue and be sued.
19

Basis of Section 2 (contd)

Only the Solicitor General, as the

lawyer of the government, can bring or
defend actions on behalf of the
Republic of the Philippines and,
therefore, actions filed in the name of
the Republic, if not initiated by the
Solicitor General, will be summarily
dismissed. [Republic vs. The Register
of Deeds of Quezon, 314 Phil. 473 ]
20

Salient Provisions of the

Rule
Where to file?
(contd)
Section 3. A petition for civil forfeiture shall be filed:
i) in any RTC of the judicial region where the
monetary instrument, property, or proceeds are
located;
ii) if all or any portion of the monetary instrument,
property, etc. is located outside the Philippines, the
petition may be filed in the RTC in Manila or of
the judicial region where any portion of the
monetary instrument, property, etc. is located, at
the option of the petitioner.
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Salient Provisions of the

Rule
With whom to(contd)
file?
Section 5. -- The petition shall be filed
directly with the executive judge of the
RTC or, in his absence, the vice-executive
judge or, in their absence, any judge of the
RTC of the same station.
-- He shall act on the petition within
twenty-four (24) hours after its filing.
22

Provisional Remedies under

the Rule of Civil Forfeiture
1.

Provisional Asset
Preservation Order (PAPO)

2.

Asset Preservation Order

(APO)
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Provisional Remedies
(contd)
1. PROVISIONAL ASSET
PRESERVATION ORDER (PAPO)
What is it?
Provisional remedy granted by the court
forbidding any transaction on or disposition of
the subject monetary instrument or property.
Issued ex parte (without hearing)
Upon determination of probable cause, based
on the allegations in the petition, that the subject
property is in any way related to an unlawful
activity as defined in Section 3(i) of R.A. 9160
Valid for twenty (20) days only
24

Provisional Remedies
(contd)
2. ASSET PRESERVATION ORDER
(APO)
- within the twenty-day period, the
court shall conduct a hearing at which
the respondent will have an opportunity
to show cause why the PAPO should be
modified or lifted.
- petitioner may submit clear and
convincing evidence for the court to
issue an Asset Preservation Order
(APO).
25

Order of Trial
Pre-Trial (Mandatory)
Trial
Judgment (Order of Forfeiture)
(Appeal)
26

No prior charge, pendency

or
IMPORTANT
conviction necessary
Section 27. -- No prior criminal
charge, pendency of or conviction
for an unlawful activity or money
laundering offense is necessary
for the commencement or the
resolution of a petition for civil
forfeiture.
27

Prohibited Procedures
(Section 26 of the Rule)
The following are not applicable in
civil forfeiture:

Amicable settlement
Mediation
Other alternative mode
of dispute resolution
28

Third Party Claim

(Section 35 of the Rule)
Within 15 days from date of finality of order of
forfeiture

Any party who has not been impleaded claiming an

interest in the property

Shall file verified petition for declaration that

property legitimately belongs to him

Otherwise, order of forfeiture becomes executory

29

PETITION FOR FREEZE

ORDER (Section 43)

- Verified petition
- Filed before Court of
Appeals
- Ex parte

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Direct filing and docketing

of Petition for Freeze Order
(Section 47)
with the Presiding Justice in

Manila, or the Executive Justices in

Cebu City or Cagayan de Oro City

Docketed in a separate logbook

Strictly confidential
31

Petition raffled on the same

day
Section 50.
- Petition is raffled on the same
day it is filed
- Raffled to a specific justice
actually present in the Court
from among the members of the
first three divisions of the CA.
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Action by the Court of

Appeals
Section 51.
Within 24 hours,
if probable cause exists that property is in any way
related to or involved in an unlawful activity,

issues ex-parte freeze order

effective for twenty (20) days
subject to extension for period not exceeding six (6)
months

33

Effectivity of Freeze
Order
Section 53.
a) Freeze order shall be effective
for twenty (20) days
b) Upon motion of petitioner,
Freeze Order may be extended for
a period not exceeding six (6)
months.
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35

Thank you

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