MANILA, Philippines — The Supreme Court has ruled that freeze orders issued by the Court of Appeals (CA) in suspected money laundering cases may include “related and materially linked” accounts, provided specific guidelines are followed to protect the rights of account holders.

In a decision penned by Associate Justice Japar Dimaampao, the SC En Banc upheld Section 10 of Republic Act No. 9160 or the Anti-Money Laundering Act (AMLA), which authorizes the CA to freeze assets tied to unlawful activity, including related accounts, if these are named in the application and the value of the property is clearly stated.

The ruling stemmed from corruption and plunder complaints filed against former Vice President Jejomar Binay and several others, over the alleged overpricing of the New Makati City Parking II Building. The Anti-Money Laundering Council (AMLC) had asked the CA to freeze the assets of Binay, his family, and close associates—including bank accounts, insurance policies, securities, and related accounts allegedly linked to illicit activity.

The CA granted the request, ordering the freeze of all identified assets, including related accounts “wherever they may be found.”

This prompted Melissa Manganip and others to question the legality of the order before the SC, arguing that their accounts were not specifically named in the AMLC application and that the law’s implementing rules and regulations (IRR) exceeded the bounds of the AMLA.

The SC disagreed, ruling that while the term “related accounts” is not explicitly mentioned in the AMLA, such accounts fall under the broader definition of “monetary instrument or property related to unlawful activity” in Section 10 of the law. The Court emphasized that money laundering operations often involve networks of interlinked accounts used to conceal illicit funds, and freezing such accounts is essential to prevent suspects from evading prosecution.

However, the Court stressed that freeze orders must only be issued upon a finding of probable cause by the CA. It also issued guidelines to ensure that the rights of innocent account holders are respected:

• The AMLC must specify related and materially linked accounts in its petition and include descriptions and estimated values.
• The CA must make an independent finding of probable cause linking the accounts to unlawful activity.
• The freeze order must not exceed the amount of funds or value of property believed to be proceeds of crime.
• The freeze order is effective immediately for 20 days, during which a summary hearing must be held to decide whether to extend or lift it. Any extension cannot go beyond six months.
• Frozen account holders may file motions to lift the order before it lapses.
• If no case is filed within the prescribed period, the freeze order is automatically lifted.
• Affected individuals may be allowed to withdraw reasonable amounts for family needs, legal services, and medical expenses.

The decision clarifies the legal framework for asset freezes under the AMLA, balancing the state’s interest in combating money laundering with the constitutional rights of individuals.