Benedicto v CA [G.R. No. 125359. September 4, 2001] compromise agreement entered into with the government.
ise agreement entered into with the government. Both RTC & CA
DOCTRINE: Sec 2 of the RA 6426 (Foreign Currency Deposit Act) is INAPPLICABLE to
the foreign currency accounts here. Sec 2 refers to deposit w/ PH BANKS in good
standing as designated by Central Bank. IN THIS CASE, the criminal cases filed
against petitioner for violation of Circular 960 involves foreign currency accounts
maintained in FOREIGN BANKS not PH banks.
1. In 1991, criminal cases were filed against Ms. Imelda Marcos & Messrs.
Benedicto & Rivera for violating Sec. 10 of Circular nO. 960 in relation to
Sec. 34 of Central Bank Act (CBA/RA 265). Due to their FAILURE TO
REPORT of their foreign exchange earnings from abroad and/or failed to
register w/ Foreign Exchange Department of the Central Bank (CB) w/n 90
days from Oct. 21,1983 since they are residents customarily earning
foreign exchange interests every 6 mos. from their investment of $25M in
PH-issued dollar denominated treasury notes w/ float in rates & in bearer
form in the name of Bank Hofmann, AG, Zurich, Switzerland, for the
benefit of Avertina Foundation, their front organization established for
economic advancement purposes with secret foreign exchange account
Category (Rubric) C.A.R. No. 211 925-02 in Swiss Credit Bank (also known
as SKA) in Zurich, Switzerland, which earned, acquired or received for the
accused petitioners.
a. An interest of $2M was remitted to Bank Hofmann, AG, through
Citibank, New York, US, for the credit of said Avertina account in
1985. Aside from the redemption of $25M and outwardly
remitted from the PH $7M+ & $17M+ for further investment
outside the PH WIHOUT FIRST COMPLYING WITH THE CENTRAL
BANK REPORTING/REGISTERING REQUIREMENTS.
2. When the criminal cases were filed & consolidated, the Central Bank issued
Circular No. 1318 revising the rules governing non-trade foreign exchange
transactions. 7 months after, Central Bank issued Circular No. 1353
amending 1318. 1353 deleted the requirement of prior Central Bank
approval for foreign exchange-funded expenditures obtained from the
banking system.
a. BUT BOTH CIRCULARS contained a saving clause, excepting from
their coverage pending criminal actions involving violations of
Circular No. 960.
3. 1993: Gov. allowed Benedicto & Rivera to return the PH on the condition
they face the crim charges against them including the DOLLAR-SALTING
case. They posted bail & pleaded not guilty.
4. They then moved to quash all informations against them. Due to lack of
jurisdiction, forum shopping, extinction of criminal liability with the repeal
of Circular No. 960, prescription, exemption from the Central BankÊs
reporting requirement, and the grant of absolute immunity as a result of a
denied their motions.
CONTENTIONS & RATIO:
Petitioners contend: No criminal liability for violations of Circular 960 since they
were exempted from its coverage. Since the purchases of treasury notes were
done thru the Central Bank’s Securities Servicing Department & payments of
interest were coursed thru its Securities Servicing Department/Foreign Exchange
Department, their filing of reports would be surplusage because the information
were already w/ Central Bank. Also, they said that the foreign currency investment
accounts in the SWISS BANKS were subject to ABSOLUTE CONFIDENTIALITY under
RA 6426 (Foreign Currency Deposit Act), hence, fell outside the coverage of the
reporting requirement imposed. They cited Sec 10(q) and the confidentiality
granted to Swiss bank accounts by the laws of Switzerland.
Cited provisions of Foreign Currency Deposit Act in this case:
1. 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. (As amended by Section 2, Presidential Decree
No. 1246.
2. Sec 10(q). Firms issuing/servicing international credit cards. Authorized foreign
exchange dealers and registered foreign exchange earners shall submit separate
monthly reports to the Foreign Exchange Department copy furnished the
Supervision and Examination Section, Dept. IV, CB supported by proof/evidences
of receipts, sales of foreign exchange to the banking system, provided that foreign
exchange eligible for deposit under the Philippine Foreign Exchange
3. SEC. 2. Authority to deposit foreign currencies. Any person, natural or juridical
may, in accordance with the provisions of this act, deposit with such Philippine
banks in good standing as may, upon application be designated by the Central
Bank for the purpose; foreign currencies which are acceptable as part of the
international reserve, except those which are required by the Central Bank to be
surrendered in accordance with the provisions of RA 265
SC: Petitioners correctly point out the at Sec 10(q) of Circular No. 960 exempts
from reporting requirement foreign currency eligible for deposit under the
Philippine Foreign Exchange Currency Deposit System pursuant to RA 6426 (FCDA).
But they must show they fail within its scope to avail such exemption. They failed
to do so.

 Sec 2 of the RA 6426 (Foreign Currency Deposit Act) is INAPPLICABLE to
the foreign currency accounts here.
 Sec 2 refers to deposit w/ PH BANKS in good standing as designated by
CB.
 IN THIS CASE, the criminal cases filed against petitioner for violation of
Circular 960 involves foreign currency accounts maintained in FOREIGN
BANKS not PH banks.
 Also, by invoking the confidentiality guarantees provided for by Swiss
banking laws, petitioners admit such reports made. Exceptions are strictly
construe, all doubts are resolved in favor of the general provision rather
than exception. Hence, they can’t claim exemption under Sec 10(q)
As to the banking laws of Switzerland cited by petitioners:
 PH courts can’t take judicial notice of foreign laws. Laws of foreign
jurisdictions must be alleged and proved. They failed to prove it.
o They should have proved it either by: (1) an official publication
thereof; or (2) a copy attested by the officer having the legal
custody of the record, or by his deputy, and accompanied by a
certification from the secretary of the Philippine embassy or
legation in such country or by the Philippine consul general,
consul, vice-consul, or consular agent stationed in such country,
or by any other authorized officer in the Philippine foreign service
assigned to said country that such officer has custody
Notes (other topics na, included it since matanong rin naman siya recently, these
topics are more on RemLaw & CrimLaw but still related to banking shizz):
(1) No forum shopping here. The case before the RTC involves the violating of
Circular No. 960, which involves the FAILURE TO REPORT the interest earnings from
the foreign exchange accounts to the proper authority. While in Sandiganbayan the
case involves anti-graft cases which involves the act of RECEIVING such interest
earning w/c is a prohibited transaction prejudicial to PH Gov.
(2) They waived the alleged irregularities in the preliminary investigations. They
posted bail upon return in the PH, entered their pleas & filed various motions &
pleadings.
(3) GR: Absolute repeal of penal law deprives the court of its authority to punish a
person charged w/ violation of OLD law PRIOR to its repeal. Since the repeal is a
legislative act rendering legal what was previously illegal so no offense longer exist
& as if the person committed it, didn’t do so.
 XPN:
a. Inclusion of a saving clause in the repealing statute that provides that the
repeal shall have no effect on pending actions.
b. The act reenacts the former statute and punishes the act previously
penalized under the old law.
 HERE, even if there was a repeal of Circular No. 960, Circular 1353
RETAINED the same reportorial requirement for residents receiving
earnings or profits from non-trade foreign exchange transactions. Also the
repealing circulars shows that both contain a SAVING CLAUSE, expressly
providing that the repeal of Circular No. 960 shall have NO EFFECT ON
PENDING ACTIONS FOR VIOLATION OF such circular.
(4) Petitioners contend: The repeal of Sec 34 of RA 265 (Central Bank Act) by RA
7653 (New Central Bank Act) removed the applicability of any penal sanction for
violations of any non-trade foreign exchange transactions previously penalized by
Circular No. 960.
 SC: A comparison of the old Central Bank Act and the new Bangko Sentral’s
charter repealing the former show that in consonance with the general
objective of the old law and the new law to maintain internal and
external monetary stability in the Philippines and preserve the
international value of the peso, both the repealed law and the repealing
statute contain a penal clause which sought to penalize in general,
violations of the law as well as orders, instructions, rules, or regulations
issued by the Monetary Board. In the case of the Bangko Sentral, the
scope of the penal clause was expanded to include violations of “other
pertinent banking laws enforced or implemented by the Bangko Sentral.”
 IN THIS CASE, the acts of petitioners sought to be penalized are violations
of rules and regulations issued by the Monetary Board. SC said that while
Sec. 34 RA 265 was repealed, it was simultaneously reenacted in Section 36
of RA 7653. Where a clause or provision or a statute for that matter is
simultaneously repealed and reenacted, there is no effect, upon the rights
and liabilities which have accrued under the original statute, since the
reenactment, in effect “neutralizes” the repeal and continues the law in
force without interruption. Hence, the repeal didn’t extinguish the criminal
liability of petitioners for violating Circular No. 960 & can’t be the basis for
quashing the Informations against them.
(5) Petitioners contend: Sec. 36 of RA 7653 in reenacting Sec. 34 of the OLD Central
Bank Act, INCREASED the penalty for violations of the rules & regulations issued by
the Monetary Board. The increase gives RA 7653 an EX POST FACTO application
w/c violates the BoR.
 SC: No ex post facto law in here. Penal laws and laws which, while not
penal in nature, nonetheless have provisions defining offenses and
prescribing penalties for their violation operate prospectively. Penal laws
 cannot be given retroactive effect, except when they are favorable to the
accused. Nowhere in Sec. 36 of RA 7653 indicates that the increased
penalties provided therein were intended to operate retroactively.

(6) The action HAS NOT PRESCRIBED. They contend that the dollar interest earnings
were remitted to foreign bank on the years 1983-1987 and the filing of the criminal
actions were in 1991 and since these remittances were made thru Central Bank
(regulatory authority), the dates of those violations are KNOWN to them.
 SC: Prescription can’t be made to run from the dates of the commission
of the offenses charged, since they were NOT KNOWN yet.
 It was only after the Edsa Revolution of Feb. 1986 that recovery of ill
gotten wealth were prioritised by the State.
o SC also took judicial notice of the fact that Mr. Marcos, his family,
relations, and close associates, resorted to all sorts of clever
schemes and manipulations to disguise and hide their illicit
acquisitions. This was viewed in CONTEXT OF HTE POLITICAL
REALITIES then prevailing. Petitioners are close associates of Mrs.
Marcos, not only were they protected from investigation due to
their influence & connections but also by the power of the
authority of President exercising strong-arm rule back then.
 Hence, violations of Circular 960 prescribe in 8 years. Here, it was
discovered in 1986 and cases were filed in 1991 so the 8-yr prescriptive
period hasn’t lapsed yet.

(8) Contention: Gov. granted them ABSOLUTE immunity under a Compromise

Ageement entered into in 1990.
 SC: In that agreement, they only limited the applicability of such
agreement to listed / identified cases therein. It didn’t mention the
criminal cases filed against petitioners for violation of Circular No. 960.
 Based on parol evidence rule, if parties agreed in writing, the contents of
that written agreement constitute the sole repository of the terms of the
agreement b/w the parties. The agreement didn’t cover the interest
earning from foreign exchange deposits in banks abroad.