The Supreme Court ruled that failure to report foreign exchange earnings, as required by Central Bank Circular No. 960, remains a punishable offense despite the circular’s repeal, due to saving clauses in subsequent circulars and the reenactment of penal provisions in related banking laws. This decision underscores the continuing obligation of Philippine residents to report foreign exchange earnings and clarifies the scope of immunity granted in compromise agreements with the government. This case clarifies the responsibilities of individuals and entities earning foreign exchange and the enduring power of the Central Bank to enforce its regulations.

From Marcos Era Secrets to Legal Exposure: Can Regulatory Repeals Erase Past Violations?

This case, Roberto S. Benedicto and Hector T. Rivera v. The Court of Appeals, Hon. Guillermo L. Loja, Sr., Presiding Judge, Regional Trial Court of Manila, Branch 26, and People of the Philippines, revolves around the legal challenges mounted by Roberto S. Benedicto and Hector T. Rivera against criminal charges for violating Central Bank Circular No. 960. These charges stemmed from their failure to report foreign exchange earnings from abroad, a requirement under the circular which aimed to regulate foreign exchange transactions. The petitioners sought to quash the informations filed against them, arguing lack of jurisdiction, forum shopping, extinction of criminal liability due to the repeal of Circular No. 960 and Republic Act No. 265, prescription, exemption from reporting requirements, and a grant of absolute immunity. The core legal question is whether the repeal of the circular and related laws extinguished their criminal liability, and whether other defenses, such as prescription and immunity, were valid.

The petitioners initially faced indictments for allegedly violating Section 10 of Circular No. 960 in relation to Section 34 of the Central Bank Act. The prosecution asserted that the petitioners failed to report foreign exchange earnings from abroad and/or failed to register with the Foreign Exchange Department of the Central Bank, as mandated by Circular No. 960. This circular prohibited maintaining foreign exchange accounts abroad without prior authorization from the Central Bank and required residents earning foreign currencies to report such earnings. Criminal Cases Nos. 91-101879 to 91-101883 were filed against Mrs. Imelda R. Marcos, Roberto S. Benedicto, and Hector T. Rivera. Additional cases, Criminal Cases Nos. 91-101884 to 91-101892 and Criminal Cases Nos. 92-101959 to 92-101969, were filed against Mrs. Marcos and Benedicto.

The legal landscape changed when the Central Bank issued Circular No. 1318, which revised rules governing non-trade foreign exchange transactions, followed by Circular No. 1353, amending Circular No. 1318. Despite these changes, both circulars contained a **saving clause**, preserving pending criminal actions involving violations of Circular No. 960. The petitioners argued that the repeal of Circular No. 960 and Republic Act No. 265 extinguished their criminal liability, citing Article 22 of the Revised Penal Code, which generally provides that the repeal of a penal law has the effect of depriving a court of its authority to punish a person charged with a violation of the old law.

The Supreme Court, however, emphasized that an **absolute repeal of a penal law** does indeed deprive a court of its authority to punish violations under the old law, but noted exceptions. One exception is the presence of a saving clause in the repealing statute. Another is when the repealing act reenacts the former statute and punishes the act previously penalized. In this case, Circular No. 1353 retained the reportorial requirement for residents receiving earnings or profits from non-trade foreign exchange transactions. Additionally, Circular Nos. 1318 and 1353 included saving clauses, expressly stating that the repeal of Circular No. 960 would not affect pending actions.

The petitioners also argued that the cases had already prescribed, citing that the dollar interest earnings were remitted between 1983 and 1987, while criminal actions were instituted in 1991 and 1992. The Court disagreed, affirming the lower court’s ruling that the prescriptive period should be computed from the discovery of the violations, which occurred after the EDSA Revolution in 1986. The Court noted the political realities of the time, where the petitioners, as close associates of President Marcos, were shielded from investigation.

Moreover, the petitioners claimed exemption from Circular No. 960’s coverage. They argued that because the treasury note purchases were done through the Central Bank, filing reports would be redundant. They also cited Republic Act No. 6426, which provides for the absolute confidentiality of foreign currency deposits. The Court found these arguments unpersuasive, stating that to avail of the exemption, petitioners must show they fall within its scope and satisfy the requirements for eligibility imposed by Section 2, Republic Act No. 6426. Furthermore, the Court noted that the foreign currency accounts were maintained in foreign banks, not Philippine banks, making Republic Act No. 6426 inapplicable.

Finally, the petitioners asserted that the government granted them absolute immunity under a Compromise Agreement entered into on November 3, 1990. The Supreme Court referenced its decision in Republic v. Sandiganbayan, 226 SCRA 314 (1993), upholding the validity of the agreement. However, the Court emphasized that the Compromise Agreement specifically listed the cases it covered, and violations of Circular No. 960 were not among them. The Court applied the parol evidence rule, stating that when parties reduce their agreement to writing, the contents of the writing constitute the sole repository of the terms of the agreement.

Ultimately, the Supreme Court affirmed the Court of Appeals’ decision, which upheld the trial court’s denial of the Motion to Quash the Informations in the criminal cases. The Court found that none of the grounds for quashing the informations provided in the Rules of Court applied. However, the Court noted that Roberto S. Benedicto had died during the pendency of the petition. Thus, the charges against him were ordered dropped, and any criminal or civil liability ex delicto attributable to him was declared extinguished due to his death.

FAQs

What was the key issue in this case?	The key issue was whether the repeal of Central Bank Circular No. 960 and related laws extinguished the criminal liability of the petitioners for failing to report foreign exchange earnings. The court also considered the validity of other defenses, such as prescription, exemption, and immunity.
Did the repeal of Circular No. 960 absolve the petitioners of their criminal liability?	No, the Supreme Court held that the saving clauses in subsequent circulars (Nos. 1318 and 1353) preserved the pending actions for violations of Circular No. 960. Additionally, the penal provisions of Republic Act No. 265 were reenacted in Republic Act No. 7653, ensuring the continuity of the offense.
What is a saving clause, and how did it affect this case?	A saving clause is a provision in a repealing law that preserves the effect of the repealed law on pending actions or investigations. In this case, the saving clauses in Circulars No. 1318 and 1353 ensured that pending cases for violations of Circular No. 960 remained valid despite its repeal.
When did the prescriptive period for the offenses begin to run?	The Supreme Court ruled that the prescriptive period began to run from the discovery of the offenses in February 1986, after the EDSA Revolution, not from the dates of the actual remittances between 1983 and 1987. This was because the petitioners were protected from investigation during the Marcos regime.
Were the petitioners exempted from the reporting requirements of Circular No. 960?	No, the Court found that the petitioners did not meet the requirements for exemption under Republic Act No. 6426, as their foreign currency accounts were maintained in foreign banks, not Philippine banks. The confidentiality guarantees of Swiss banking laws were also not proven.
Did the Compromise Agreement grant the petitioners absolute immunity from these charges?	No, the Compromise Agreement specifically listed the cases it covered, and the criminal cases for violations of Circular No. 960 were not among them. The Court applied the parol evidence rule, limiting the agreement to its written terms.
What was the effect of Roberto S. Benedicto’s death on the criminal charges against him?	The Supreme Court ordered the charges against Roberto S. Benedicto to be dropped, and any criminal or civil liability ex delicto attributable to him was declared extinguished due to his death on May 15, 2000.
What is the significance of the ruling on forum shopping in this case?	The Court clarified that the single act of receiving unreported interest earnings can constitute offenses against two distinct laws (Circular No. 960 and R.A. 3019), thus not considered as forum shopping. The lack of identity of the offenses charged means prosecution under one law is not an obstacle to prosecution under the other law.

In conclusion, this case reaffirms the importance of complying with Central Bank regulations and clarifies the limitations of defenses such as repeal, prescription, exemption, and immunity. The decision underscores the government’s commitment to prosecuting violations of banking laws and recovering ill-gotten wealth, even in the face of changing legal landscapes.

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Disclaimer: This analysis is provided for informational purposes only and does not constitute legal advice. For specific legal guidance tailored to your situation, please consult with a qualified attorney.
Source: Roberto S. Benedicto vs. CA, G.R. No. 125359, September 04, 2001