10 Questions
What is the fate of unclaimed balances according to Act No. 3936?
They will be deposited with the Insular Treasurer for the credit of the Government of the Philippine Islands
What is the duty of banks regarding unclaimed balances under Act No. 3936?
Forward a statement to the Insular Treasurer of all credits and deposits held by them in favor of persons unheard from for ten years or more
What is the policy of the State regarding bank accounts under the Anti-Money Laundering Act?
Protect and preserve the integrity and confidentiality of bank accounts
What is considered a 'covered transaction' under the Anti-Money Laundering Act?
A transaction in cash involving a total amount in excess of P500,000 within one banking day
What is the purpose of implementing targeted financial sanctions under the Anti-Money Laundering Act?
Related to the financing of the proliferation of weapons of mass destruction, terrorism, and financing of terrorism
In the Philippines, which law explicitly provides that foreign currency deposits shall be exempt from garnishment?
RA 6426 or The Foreign Currency Deposit Act
If a judgment creditor wants to go after a depositor's foreign currency deposit in the Philippines, which law prohibits this action?
RA 6426 or The Foreign Currency Deposit Act
Abet has a P250,000 balance in his BPI Account and a $100,000 balance in his foreign currency deposit. Can a judgment creditor go after both accounts according to the laws mentioned?
No, the judgment creditor can only go after the peso account
Which law does not contain a prohibition on garnishment of a depositor’s peso deposit in the Philippines?
RA 1405 or the bank secrecy law
Under what circumstances can a judgment creditor go after a depositor's foreign currency deposit according to Philippine laws?
Under no circumstances can a judgment creditor go after a foreign currency deposit
Study Notes
Act No. 3936
- Unclaimed balances are turned over to the National Treasury after a certain period of time.
- Banks are duty-bound to report and remit unclaimed balances to the National Treasury.
Anti-Money Laundering Act
- The State's policy is to ensure that bank accounts are not used for money laundering and terrorist financing.
- A 'covered transaction' is a transaction with a value of more than PHP500,000 or its equivalent in foreign currency.
- The purpose of implementing targeted financial sanctions is to prevent the financing of terrorism and proliferation of weapons of mass destruction.
Foreign Currency Deposits
- Foreign currency deposits are exempt from garnishment under Philippine law, specifically Republic Act No. 6426.
- A judgment creditor cannot go after a depositor's foreign currency deposit by virtue of Republic Act No. 6426.
- This exemption does not apply to peso deposits, which can be garnished by a judgment creditor.
- However, a judgment creditor may go after a depositor's foreign currency deposit if the court has obtained a judgment based on a fraud or illegal activity connected to the deposit.
Garnishment of Deposits
- A judgment creditor can go after a depositor's peso deposit, but not their foreign currency deposit, unless the latter is connected to a fraud or illegal activity.
- Republic Act No. 6426 is the law that exempts foreign currency deposits from garnishment, but it does not contain a prohibition on garnishment of peso deposits.
Test your knowledge of Philippine banking laws with this quiz. Explore the regulations related to garnishment of deposits, including foreign deposits, under RA 1405 and RA 6426.
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