The Validity of Saving Clauses in Repealed Central Bank Circulars

TLDR: This case affirms the validity of saving clauses in Central Bank circulars, even when the circulars themselves are repealed. It clarifies that the Monetary Board has the authority to include these clauses to ensure ongoing legal proceedings for violations of the original circulars are not affected by the repeal. This is crucial for maintaining the stability of the Philippine monetary system and preventing offenders from escaping justice due to technicalities.

IMELDA MARCOS, PETITIONER, VS., THE HONORABLE COURT OF APPEALS; HONORABLE JUDGE GUILLERMO L. LOJA, SR., THE PRESIDING JUDGE OF BRANCH 26 OF THE RTC AT MANILA; AND THE PEOPLE OF THE PHILIPPINES, RESPONDENTS. G.R. No. 126594, September 05, 1997

Introduction

Imagine a scenario where a new law is passed, seemingly wiping away all past transgressions. What happens to those already facing charges under the old law? This is the essence of the legal question addressed in Imelda Marcos vs. Court of Appeals. The case revolves around Central Bank (CB) circulars and whether the repeal of one circular automatically dismisses pending cases filed under it.

The case involves Imelda Marcos, who was charged with violating Central Bank Circular No. 960 for allegedly opening and maintaining foreign exchange accounts abroad without proper authorization. When CB Circular No. 960 was later repealed by CB Circulars Nos. 1318 and 1353, Marcos argued that the charges against her should be dropped. However, these later circulars contained “saving clauses,” explicitly stating that pending actions or investigations under the old circular would not be affected. The Supreme Court ultimately sided with the government, upholding the validity of these saving clauses.

Legal Context: Central Bank Circulars and the Power of the Monetary Board

Central Bank circulars are regulatory issuances of the Bangko Sentral ng Pilipinas (BSP), formerly the Central Bank of the Philippines, designed to govern various aspects of the country’s financial system. These circulars have the force and effect of law, provided they are within the scope of the authority delegated by Congress to the BSP.

At the heart of this case lies the power of the Monetary Board, the governing body of the BSP, to issue and amend these circulars. Section 14 of the Central Bank Act grants the Monetary Board the power to “prepare and issue rules and regulations necessary for the effective discharge of the responsibilities and exercise of the powers assigned to the Monetary Board and to the Central Bank under this Act.”

The key legal principle at play here is the concept of repeal and its effect on pending cases. When a law is repealed, it is generally understood that it is no longer in effect. However, the repealing law can include a saving clause to preserve the effect of the repealed law for specific situations, such as pending cases. This is to prevent a situation where wrongdoers escape liability simply because the law under which they were charged has been repealed.

The relevant provisions in this case are the saving clauses found in CB Circular No. 1318 and CB Circular No. 1353. The saving clause in CB Circular No. 1318 states:

“SEC. 111. Repealing Clause. All existing provisions of Circulars 363, 960 and 1028, including amendments thereto, with the exception of the second paragraph of Section 68 of Circular 1028, as well as all other existing Central Bank rules and regulations or parts thereof, which are inconsistent with or contrary to the provisions of this Circular, are hereby repealed or modified accordingly: Provided, however, that regulations, violations of which are the subject of pending actions or investigations, shall not be considered repealed insofar as such pending actions or investigations are concerned, it being understood that as to such pending actions or investigations, the regulations existing at the time the cause of action accrued shall govern.”

Case Breakdown: The Saga of Imelda Marcos and Central Bank Regulations

The narrative unfolds with Imelda Marcos facing charges for allegedly violating Section 4 of CB Circular 960 by opening and maintaining foreign exchange accounts abroad without prior authorization. These accounts were allegedly held in Swiss banks under the names of various foundations.

The timeline of events is crucial:

• 1968-1991: Alleged violations of CB Circular No. 960 by Imelda Marcos.
• December 20, 1991: Criminal charges filed against Marcos for violating Section 4 of CB Circular 960.
• 1992: CB Circulars Nos. 1318 and 1353 are issued, repealing CB Circular No. 960 but including saving clauses.
• May 23, 1994: Marcos files a Motion to Quash, arguing that the repeal of CB Circular No. 960 extinguished her liability.
• June 9, 1994: The trial court denies Marcos’ Motion to Quash.
• August 30, 1994: The trial court denies Marcos’ Motion for Reconsideration.
• Court of Appeals: Marcos petitions the Court of Appeals, which upholds the trial court’s decision.
• Supreme Court: Marcos elevates the case to the Supreme Court.

The Supreme Court, in its resolution, emphasized the validity of the saving clauses. The Court quoted the trial judge’s observation:

“x x x In no uncertain terms, the corresponding informations clearly state that the accused, in conspiracy with the late president x x x opened and maintained foreign accounts abroad in the name of foundations organized by their dummies… As already stated and discussed, it is the accused who (was alleged to have) maintained foreign accounts and earned foreign exchange abroad camouflaged in the name of foreign agents and/or foundations but neither obtained authority to do so nor reported the earnings to the Central Bank.”

The Court also highlighted the purpose of the saving clauses, stating that they were “dictated by the need to continue the prosecution of those who had already committed acts of monetary destabilization.” To allow the repeal to automatically dismiss pending cases would be an “absurdity.”

Practical Implications: Protecting the Integrity of Monetary Regulations

This case has significant implications for the enforcement of monetary regulations in the Philippines. It affirms that the BSP has the power to issue circulars with the force of law, and that these circulars can include saving clauses to protect ongoing legal proceedings.

For businesses and individuals, this means that they cannot assume that a change in regulations will automatically absolve them of past violations. They must remain aware of their obligations under the law and ensure compliance, even if the specific regulations are later amended or repealed.

Key Lessons

• Saving Clauses are Valid: Repealing a law doesn’t automatically dismiss pending cases if a saving clause exists.
• Monetary Board Authority: The BSP’s Monetary Board has broad powers to regulate the financial system.
• Compliance is Key: Businesses and individuals must comply with all applicable regulations, even if they are later amended or repealed.

Frequently Asked Questions (FAQ)

Q: What is a Central Bank Circular?

A: A Central Bank Circular is a regulatory issuance of the Bangko Sentral ng Pilipinas (BSP) that governs various aspects of the Philippine financial system.

Q: What is a saving clause in a law?

A: A saving clause is a provision in a repealing law that preserves the effect of the repealed law for specific situations, such as pending cases.

Q: Why are saving clauses important?

A: Saving clauses prevent wrongdoers from escaping liability simply because the law under which they were charged has been repealed.

Q: Does the repeal of a law automatically dismiss pending cases filed under that law?

A: No, not if the repealing law contains a saving clause that preserves the effect of the repealed law for pending cases.

Q: What is the role of the Monetary Board in issuing Central Bank Circulars?

A: The Monetary Board is the governing body of the BSP and has the power to issue rules and regulations necessary for the effective discharge of the BSP’s responsibilities.

Q: What happens if I violate a Central Bank Circular?

A: Violating a Central Bank Circular can result in criminal penalties, including fines and imprisonment.

Q: How can I ensure compliance with Central Bank Circulars?

A: Stay informed about the latest regulations issued by the BSP and seek legal advice if you have any questions or concerns.

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