CTA Case No. 3398 (Decision)

C~O'i~..'J'JRn.jv~rOlo~�: ,1~!J1.~ xHlHA.t?J'l:P)Et~A.,.'-� j f'S ' lt'f.tJ�"' ~1T'f ROSA CANCIO, C.T.A. CASE NO. 3398 Petitioner, - versus - THE COHMISSIONER OF CUS'!OHS, Respondent. X- - - - - - ~ - ~ ~ X DECI S I 0 N Sought to be reviewed in this appeal brought by petitioner Rosa Cancio is the decision of res- pendent Commissioner of Customs dated December 1, 1981 in Customs Case No. 81-40 (Seizure Identifi- cation No . 4431-81) which affirmed the decision of the Acting Collector of Customs of the Manila . International Airport dated November 18, 19Cl, decreeing the forfeiture of US$102,900.00 in cash, US$600.00 in travellers checks and ~1,500.00. The seizure proceeding was instituted against the subject currencies for violation of Section 2530 (f) _of the Tar iff and Customs Code, in relation to Central Bank Circular Nos. 265 and 383, after petitioner failed to pfesent to the apprehending I customs authorities a Central Bank authority to bring out of the country the said currencies while 4G

DECISION - CTA CASE NO . 3398 - 2- at .t he pre-boarding area of the Manila International Airport on June 12, 1981 on her scheduled flight to Hongkong together with her husband and three children. The case is rested on the pleadings, records of the Bureau of Customs and respective memorandum of the parties. No substantial dispute exists on the background facts and evidentiary aspect of the controversy as found by the Acting Collector of Customs and fully restated in the decision of the Commissioner of Customs . Thuaz The records show that claimant Mrs . Rosa Cancio bearing Philippine Passport No. 11797799, while clear- ing through the Pre-Boarding (AVSECOH) Area of MIA with her husband and three � {3) children to board PR 306 for Hong- kong in the morning of June 12 , 1981 , was apprehended with One Hundred Two Thousand Nine Hundred Dollars (US $102,900.00) in cash, six hundred dollars (US$600.00) in two travelers checks, and one thousand five hundred (Pl,SOO.OO) Pesos; that such apprehen- sion was effected only, thru an alarm sounded by the scann~r (metal detecting device ) of tha AVSECOM men, when Mrs. Cancio who did not declare her currency had already passed the Customs inspection area1 that subject curren- cies were placed and concealed inside the two fairly-sized carton boxes for local chocolates, securely ~rapped and taped with tin foil-back paper; and, that in view of c)aimant ' s failure, upon being required, to present the Central Bank Authotity, the said currer.- cies iere accordingly confiscated and a seizure Receipt No. 013 was issued to her1 hence, this seizure proc e ed i ng s.

DECISION - CTA CASE NO. 3398 - 3- At the hearing of this case , claimant, thru counsel, presented certified xerox copy of her Bank Book (Exhibit "1") �for foreign currency deposit with the � Philippine Commercial and Industrial Bank under Account FCDU No. 0265, dollar remittances in telegraphic transfers from abroad for deposits in her account from May 13, 1981 to May 21, 1981 , and with- drawal cards (Exhibit "1-A" to "1-E" , inclusive), attesting to the fact that claimant Rosa Cancio had withdrawn from her PCDU Account a certain amount of United States currency which tended to show that claimant herein was a foreign currency depositor pursuant to the provi- sions of Republic Act No. 6426 , as i mple- mented by Central Bank Circular No. 343. Anu herein claimant testified that because her foreign currency deposi t could not be withdra\"m at one time, s he made her \'lith- drawal on several occasions starting from May 14, 1981 up to May 27, 1901 whe n she closed her account preparatory t o her departure which was scheduled in the morning of June 12, 1981 for Hongkong7 that f rom Hongkong, she and her family intended to proceed to the United States for medical treatment of her heart ailment as advised by her two attending physic ians from the UST Hospital7 that the us Cur rency that the y were carry i ng and confiscated from them on June 12, 1981 was intended principally f or such medical pdrpose and for other miscellaneous and necessar y expenses, and, that the subject currencies were conce aled and hidden by t hem inside the two chocolate boxes solely for security reasons. (PP � 85-86 and 140-141, Customs record.) The primordial issue for resolution is whether there is a viol ation of Central Bank circulars as wou l d warrant the f or feiture of the subject United 4 G'�

DECISION - CTA CAS E NO. 3398 - 4- States currency and Philippine notes under Section 2530 (f ) .of the Tariff and Customs Code , as amended, which pertinently provides as followss SEC. 2530. - Property Subjec t to Forfeiture Under Tariff and Customs Law. - Any vehicle, vessel or aircraft, cargo, article and other objects shall, under the following conditions be sub- j ect to forfeiturex XXX XXX XXX f. Any article the importation or exportation of which is effected or attempted contrary to law, XJ~x , XXX XXX XXX Treating first the Philippine notes in t he amount of �1,500.00 found in the possession of petitioner Rosa Cancio, the legal requirement is that the amount that a traveller can bring out of the country should not exceed PSOO.OO. If the amount to be brought out or exported exceeds P500 .00, prior authorization from tpe Central Bank must be sec ured~ This is clear from the provisions of paragraph 4 of Central Bank Circular No. 383 which statea "Any person, firm, company or corporation , may import or export, and a ny incOJtl~. ng or outgoing traveller may bring with him, Philippine notes and coins , and checks , money orcers and o ther bi ls of exchange drawn in pesos against banks operating in the Philippines in an amoun t not exce edi lvJ PSOO. OO; Provide~, That an amount

DECISION - CTA CASE NO. 3398 - 5- in excess of PSOO~OO may be imported into, exported from, or brought into or out of, the Philippines upon pr ior authorization of the Central Dank of the Philippines, xxx." In the case at bar, petitioner was travelling with her husband and three children and, as testi- fied by her, the amount of Pl,SOO.OO was for the expenses of the fi ve of them in Hongkong. Her claim that each of them was "therefore" a_located only P300.00 has not been refuted nor argued by I respondent. Evidently, such facts which indicate that she \>tas merely carrying the \'thole amount of Pl,soo.oo. including the allocation of P300.00 for each of the other four (4) members of the family travelling with her, does not constitute a violation of the law although no Central Bank authorization was ob~ained because, in reality , the ~soo.oo l imit which each traveller can freely bring abroad has not been exceeded. 'l'o hold otherw.~se would result in an absurdity in the application of the above provi sions of Central Bank Circu lar No. 383 as it would require, in a situation like this, every member of the family tr,�avelling together, including even each child going with his/her parents, to physically and personal! y carr y the money intended 47 1

DECISION - CTA CASE NO. 3398 - 6- for . his/her expenses. To our mind, any responsible member of the fami ly travelling abroad together may personally carry the whole amount for all of them without need of a Central Bank authorization, pro- vided that the amour:.t allocated to each member does not exceed ~500.00. As regards the foreign currency o r foreign exchange, the legal provisions pertinent to the exportation or taking out thereof from the country are found in Central Bank Circular No. 265, parti- cularly paragraph 3 thereof, which reads: "No person shall take out or export from the Philippines foreign currency or any other foreign exchange except as otherwise authorized by the Central Bank." and Section 3 of Central Bank Circular No. 534, providing as follO\'IS : "Sec. 3. Unless specifically authorized by the Central Bank or allowed under existing interna~ional agreements or Central Bank regulations , no person shall take or transmit or attempt to take or transmit foreign exchange 1 in an y form, out of the Philippines directly, through other persons, through the mails, or through international carriers. The provisioos of this Section shall not apply to tourists and non- resident temporary visitors who are taking or sending out of the Philippines their own foreign exchange brought in by them." . 4 7 ~!

DECISION ... CTA CASE NO. 3398 - 7- Central Bani< Circular No . 534, which too effect on July 19, 1976, has partially amended or modified Central Bank Circular No. 265 to the extent that, among others, it exc ludes from the prohibitory pro- vision (Central Bank authorization requirement)~ tourists and non-resident temporary visitors \'lho are taking or sendin0 out of the Philippines their own foreign exchange brought in by them. (See Sotoyama, et al . va. The Commissioner of Customs, C.T.A. Case No. 2902, April 23 , 1979.) . In this case , petitioner, a resident citizen of the Philippines , was taldng abr oad a large amount of United States dollars without a Centr~l Bank authority or author i zation under exist ing Cen tral Bank ~egu lations. Clearly, such fact constitutes a violation of the Central Bank Circulars, and thus would subj ect to forfeiture said foreign currency under Section 2530(f) ?f the Tariff and Customs Code. Indeed, based on her unimpugned evidence which shows, among others, that she was a foreign cu rrency depositor at the Philippine Conmercial and Industri al Bank , Makat i, and tha,t.. the subjec t Unite d States dollars were a part of the total amount of US$116,000.00 she withd re\Y' from sai d bank fr om Hay 47 3

DECISION - CTA CASE NO. 3398 - 8 "!'" 14 to 27, 1981 for her travel and medical expenses in the United States , petitioner would argue that a Central Bank authority is not necessary in this case �because under Section 5 of Republic Act No. 6426, as i mplemented by Cen tral Bank Circular No. 343, which states: Sec. 5. \'Jithdrawability and_t;runs- ferability of deposits. '!'here shall be no r estriction on the withdrawal by the depositor of his deposit or on the trans- fer ability of the same abroad except those arising from the contract between the depositor and the bank. she could bring out or transfer abroad her deposit without restriction. (See pp. 5 & 6, petition for review, pp . 5 & 6, c.T.A. records. ) She maintains that Section 5 of Republic Act No . 6426 should be an exception to or must prevail over Central Banlt Ci rcular No. 265, thusa As we have above stated, CB Circular No . 265 applies to all foreign currencies from whatever source. It is, ~herefore, a l aw of general application. On the other hand , Section 5 of R.A. No. 6426 onl y refers to spec ific or particular kind of f oreign currency - those deposited under the s aid Act. The lm'l, therefore , is specific or particular in its application. Furthermore, R.A. No. 6426 is a later l eg islation . Reconciling ,-the two la'rm, 1t is safe q to state that while CB Circular No. 265 is the ~eneral rule, Section 5 of R.A. No. 6426 provides for an exception. A parti- cular l~w prevails over a general law . 4 7 :A.

DECISION - CTA CASE NO., 3398 - 9- More so, when ~'\ ~Jo. 6426 is a late!: legislation . For if Congr.ess intended to require a CB authority for the tranefer abroad of foreign currency deposits, it could have so easily provided it in RA No ., 6426 as an exception to its ex~ressly declared policy of unrestrained transfe- rability abroud of foreign currcocy deposited under the Act. It is our contentio~ that the dollars conficcatcd from the pet't:oner having come from her foreign cur rency deposited under the provisions of RA No. 6426, no ca authority is necessary to take them abroad. Hence, the petitioner did not v iolate CD Circular No. 265. (p. 7, pet itioner 's i;lemorandum, p. 55, c.T.A. records.) Said postulation fails to convince ua. l'rescinding frorl the quastion on whether or not Section 5 of Republic Act No. 6426 must prevail over paragraph 3 of Central nan!~ Circular ~ o. 265, the fact remains that Central Ban k Ci,cular No. 534 which was promulgatGd by the C<mtral Bunk in July 1976, a nd very much later than t e~ublic hct No . 6426, has to all intenmand purpose~ reiterated the regulatory provis ions of varagra?h 3 of Central nank Circular ::o. 265 r~lative to the taking cut or exportation of forei~n currency or foreign exchange . Central Bank Circular No. 534, as quotaJ / heretoforo, prohibits the taking out, tr.lnsmittal, or attemj.)t to tal~e out or transTnit foreign exchange .47 5

DECISION - CTA CASE NOe 3398 - 10 - in any form unless specifically authorized by the Central Bank, or allowed under existing . international agreements or Central Bank regulations. Only tourists and non-resident temporary visitors who are taking or sending out of the Philippines their own foreign exchange brought in by them are expressly exempted . The reason is obvious: they are merely bringing out what was actually brought in by them, being only transients or sojourners in the Philippines. However, nothing in the exemption is mentioned or contemplated of residents of the Philippines who are foreign currency depositors bringing out or with- drawing and transferring abroad their own foreign currency deposits in the Philippi nes. We cannot i~nore the principle that express mention of an exemption preclude s reading others into it. (Uanila Electric Company vs. 11isael Vera, L-23 ;347, October 22, 1975, 67 SC~\ 351, citing Hoard vs. Sears, Roebuck & Co., 122 Conn. 105, lBB, A. 269.) It maybe that under Section 5 of Republic Act No. 6426, supra, ther~ is no restriction of the " withdr~wability and trans ferabilit y of deposits except those arising from c ontract ') ct �.�tN:~n [) an k 4 7 ()

DECISION CTA CASE NO. 3398 - ll - an9 depositor. Nonetheless, the pe~ernptory require- ments of public interest and state nece~sity of pro- tecting and safeguarding our dollar reserves would stress the urgency for full and unconditional corn- pliance with the prohibition of taki ng out or export- ation from the Philippines of foreign currency or any other foreign exchange by residents unless other- wise authorized by the Central Bank. w Nevertheless, Section 3 of Central llank Circular No. 534 must prevail over Section 5 of Republ_c Act No. 6426 because apart from said circular being pos- terior to the latter, the very context of the pro- vision of Section 7 of Republic Act tJo . 6425 ! tself and of Section 11 (a) .and (b) of its implementing circular , Central Bank Circular No. 343, afford a reservation that the rights of foreigri currency depositors may be subject to change or diminution by the Central Bank, except with re~pect to their deposit already existing at the time of nuch change. The pertinent provisions aforesaid read: Section 7, Rep. Act No. 6426 Sec. 7. Rules and Regulations.- xxx XXX ;' XXX In case the Ccntr.::1l llank prornulga t.P.s new rules and regulations decreasing the rights of depositor s, the rules and regulations at the time the deposit was made shall govern. 47 7

DECISION - C. T.A. CASE NO. 339 8 - 12 - Section 11 , CB Circular No. 343 Sec. 11 . Withdrawability an~ Liquidity of Deposits. a. In case of any change in Central Bnnk regulations, the de posits already existing at the time of change shall not b~ adversely affected; b. Subject only to the terms of the contract between the bank and the depositor, the latter shall have a general license to withdraw his depo- sit, notwithstanding any change in policy or regulations . XXX XXX XXX As a matter of fact, the intent to subject to regulation by the Central Bank the transferability of foreign currency deposit abroad i s made more manifest in the above provision of Section ll(b) of Central Bank Circular No. 343, which expressly gives the foreign currency depositor a .9..~neral license to withdraw his deposit but withholds therefrom the transferability abroad of said depo, sit. Significantly , long before the foreign currency (dollar) de posits o f pet i tioner here were made i n April and May, 1901 (see Exhs. "1" , "1-D" & "1-C"; pp. 73, 74 & 76 , Customs records ) , . tho rights of foreign ~urrency a e positors relative t o the transferability of their foreign currency deposits abroad, under Section 5 o f Re public Act

DECISION - CTA CASE NO. 3398 - 13 - No, 6426, have already been changed or diminished. Central Ban k Circular No. 534 prohi bi ts, except with respect to tourists and non-resident temporary visitors, t he taking or transmittal, or even attempt thereof, of any foreign currency or f oreign exchange, i n any for m, out of the Philipp ines, dir e ctly, through othe~ persons, through the mail~or through inter- national carriers , without autho4ity from the Central Bank or without authoriza tion unde r existing inter- nati onal agreements or existing Central Bank regu- l at ions. And goods , as we ll as mer chandise, which include checks, money orders and dollar bills (Bas- tida vs. Commis sioner o f Cus toms, L-24011 , Oc tobe r 24 , 1970, 35 SCRA 418), i mported or exported wi thout a release certificate or author:it y by Circulars iss ue d by the Central Bank are subject to forfeiture unde r Customs Laws . (See Capulong vs. Act9. Com- missioner of Cus toms, L-22991, January 16, 19 68 , 22 SCRA 111 Rosita de la Cruz vs. Court of Tax Appeals, L-23335 and L-23452 , February 29, 1968, 22 SCRA 8867 Ju ana T. de la Cruz vs . Cou rt of Tax Appeals, L-23334 & L-23 451, Februa r y 29, 1968, 22 SCRA 891; ,. Leuter io vs. Commi ss ioner of Customs, L-21800, June 22, 1968, 23 SCRA 1055; Fermin Sa r e vs. Com- missioner of Customs, L-22988 , June 30, 1969, 28 .47 ...

-. DECISION - CTA CASE NO. 33 98 - 14 - 1 sc~ 113 .) Accordingly, the decision appcalca from is hereby affirmed insofar as the forfeiture of the US$ 102,900.00 in cash and US$600.00 in checks is concerned, there being a violntion of CentrDl Bank Circular No. 265 and Section 3 of Centrul Bank Circular No. 534, in relation to Section 2530(�) of the Tariff and Customs Code as amended . The said decision is however reversed insofar as the forfeiture of the Pl,500.00 is concerned. WHEREFORE, the decision of respo:1dent Conunissioner of Customs dated December 1, 1981 is modified as indicated in the above orinion of the Court. With costs against petitioner. SO ORDERED. Quezon City, November 15, 1982 � t.�~�r� "t,.�.'c\.' .~,_- 7!..~ I� ~'�/ ~V � / Al-11\N'fE FJLLi~R Prc:;iding J u :'l<J e t'lE CONCUR 1 � ROA!,JUIN nociatc Jud ~_<? -~~? Associate Judge