SC: Freeze orders in money laundering subject to guidelines

The Supreme Court (SC) ruled that a freeze order issued by the Court of Appeals (CA) for suspected money laundering may legally cover related bank accounts, provided certain guidelines are followed to protect the rights of account owners.

In a decision penned by Associate Justice Japar B. Dimaampao dated May 20, 2025, the SC En Banc upheld Section 10 of Republic Act No. 9160, as amended — the Anti-Money Laundering Act (AMLA). The provision permits the CA to freeze related and materially linked accounts if they are included in the application and the freeze order identifies the amount or value of the assets involved.

The case originated from corruption and plunder charges filed against former Vice President Jejomar Binay and other officials over alleged irregularities, including the overpricing of the New Makati City Parking II Building.

The Anti-Money Laundering Council (AMLC) requested the CA to freeze Binay’s assets, including bank accounts, insurance policies, securities, and “related accounts” of Binay, his family, and close associates suspected of involvement in money laundering.

The appellate court granted the request and ordered banks to freeze all identified assets, including “all related accounts wherever they may be found.”

However, Melissa Manganip and others challenged the freeze order before the SC, arguing their accounts were frozen despite not being named in the AMLC’s application. They also claimed that the AMLA’s implementing rules and regulations (IRR) exceeded legal authority by allowing related accounts to be frozen, violating rights to privacy and protection against unreasonable searches.

The Supreme Court disagreed, ruling that the law authorizes freezing related accounts even if the term “related accounts” is not explicitly stated in the AMLA. These accounts fall under the broader category of “monetary instruments or property related to unlawful activity” as defined in Section 10.

The Court noted that money laundering often involves complex networks of accounts used to conceal or transfer illicit funds, making it necessary to freeze related accounts to prevent suspects from evading investigation.

However, the SC emphasized that freeze orders must be grounded on probable cause—meaning there must be reasonable grounds to believe the assets are linked to illegal activity—to protect the rights to privacy and guard against unlawful searches.

To further safeguard innocent account holders, the Court set clear guidelines on how related accounts may be included in freeze orders, ensuring due process and fairness.