Asset preservation, seizure and forfeiture
In the previous article, I mentioned that Republic Act (RA) 11521, or the measure strengthening the Anti-Money Laundering Act of 2001 (RA 9160), introduced significant amendments in the landscape of anti-money laundering compliance. In light of the new law, the Court of Appeals (CA) released AM 21-0305-CA or the Rule of Procedure in Cases of Bank Inquiry into or Examination of Deposit and Investment Accounts relating to an Unlawful Activity or a Money Laundering Offense under RA 9160, as amended. As mentioned, the said CA Rules are complementary to the Supreme Court’s (SC) Rule on Asset Preservation, Seizure, and Forfeiture in Criminal Cases under RA 9160, as amended (AM 21-03-13SC). The CA and SC Rules both took effect on 31 May 2021.
The SC Rules provide that a property subject of a crime or offense, the proceeds or fruits of a crime or offense, or any property used as the means of committing an unlawful activity or money laundering offense, may be preserved, seized, or forfeited upon a lawful order from the court.
Asset preservation is a remedy that the State or prosecution may avail when a criminal information is filed against a person charged with an unlawful activity or a money laundering offense to hold and conserve a property, and forbid any transaction or disposition.
At any time after the filing of the criminal information alleging asset forfeiture, or in case where information has not yet been filed but properties have been seized by virtue of a search warrant or a warrantless arrest, the prosecution may file a verified motion for the issuance of an asset preservation order.
Upon determination by the court that probable cause exists, the court may issue an ex parte provisional asset preservation order effective immediately for a period of 20 calendar days from service.
In case a provisional asset preservation order is to be implemented, the service of said order shall be effected first on said covered persons or government agency prior to the accused or person in possession of the property of the accused, or in whose name the property of the accused is registered. The copy of the court shall also be furnished to the Anti-Money Laundering Council (AMLC).
Within the 20-calendar day period, the court shall summarily hear the motion to determine whether the order shall be modified or lifted, or an asset preservation order shall be issued, which shall be valid during the entire duration of the proceedings.
Within 24 hours from receipt of a provisional asset preservation order or an asset preservation order, the AMLC shall submit to the court which issued the order a detailed return specifying all the relevant information on the asset preserved.
The asset preservation order may be discharged upon filing a motion, comment, or opposition, raising the grounds for its discharge. The court has the discretion to impose a bond, and the amount of the bond to discharge the asset preservation order.
Asset seizure, on the other hand, refers to the taking into custodia legis, upon issuance of a search warrant or a valid warrantless arrest of a property subject of a crime or offense, the proceeds or fruits of a crime or offense, or any property used as the means of committing a crime or offense. An ex parte provisional asset preservation order may be applied for if the seized properties are in danger of dissipation, destruction or deterioration.
Asset forfeiture is the accessory penalty imposed upon a person convicted with finality of a crime or offense, divesting him or her of properties subject of the crime or offense, the proceeds or fruits of the crime or offense, in favor of the State, without compensation as a consequence of the commission of a crime or offense.
Note that the pursuit of asset forfeiture under the SC Rules is independent of proceedings for civil forfeiture against the same property.
“Asset forfeiture is the accessory penalty imposed upon a person convicted with finality of a crime or offense.
“Upon determination by the court that probable cause exists, the court may issue an ex parte provisional asset preservation order.