CTA Case No. 2902 (Decision)

RFPURUC OF THE PRILJPPlMU COURT O.l� TAX APPEALS QUEZON CITY l c. � . c ._, r ., � 2 ~ 12 n ~ t ion r"' . - v rs s - '.. # X ... - .. ... ... - - D ~~ l Thi� c � ~ub it d f r ju g nt on th l dings . r.corc of th Bure u of Cu t u.., d rer. ct.iv of t1e :etie"' , i!" n p l fr m h deci .... i n f r .) onde t Co is ir n r of CU<.>t m Jun ~ .lO , 1 7 I .. firming h d ci i n 0 th r o Cu ton 0 h 11 - il lnt r- r ati n 1 ir~ort in iz r 1 e f ca ion � 1350- 76 ted rch 1 ' , 97 ' for- . f iture f for i curr nc G C i ting o.~.. United t t �-' d llar nese Yen nd ngkong doll r"" in th t t 1 mo nt 0 u 105 . 14 . oo , 17 , ooo . oo and ! <'35 . 00 .t r ec iv y , for vi 1 ti n c ~C- tion 3 of c nt 1 n c rc lar o . 265 i r 1 ion to ction 2530(f) of t 'ari -f nd Cu,�t m Cod � 103

D Cl o. 2 02 . CT. 2 om th co s 0 t ure u cu~t s , g ther th f llcwin ndi ut d ct�~: iti n r n~ oOt y rna . ikio w � F:.zjicc n w n ti 1 , an hi l , ll J rriv in e hili pin s on D c ,, 29 , 1975 tour ts cr v .i r � In t rnin 0 J n ry 11, l 76 ~ thy r sch d 1 �d to th co ntry en liqht c 900 of c th y cific ir �y pl n un for on n � n y ec -in th ir lu g e hrcugh t t t. rcur r 0 th .tdnil n- �t rn 1 ir r , thy r s by c t a .in ~r J s f n ~'~'>olen tin (through a -y ....hi w-m whc could u n< nglia.h) if tL y h doll r� ith nd to wt.ich u -.,1:1 n, th y n r in th n uJ.on s rch n X in ic � r � ol ntino no for _i n cur- r nci s cl ( ) in the rly hiu n in heir lug # to 11 uitc "".e n 0 otoyam - u 2,0 o. O: . (b) in th uitc e 0 hi l�- rna - Uu 6, 00 . 00; � nd . {c) i th suite s 0 Fujico - u 2,000 . C~.,; . J..,i},evis � cu X iner nto i V rsoz # who in ch �am c eking r to. th r w 1 - si ith ner ol ntino , foun cone<. leo in th o a p ir r u rs in 1 c � .. ot y n 's � dte s , U 0 , 000 . 00 . There ft r , t th 1

D c � 2 02 .... j ... Cu t olic H rt rs , physi � 1 y rch c d1c by C' t ~ 1 c n s cial inv tig or � od lf u i t r ult d in th di - CO'.i of dditil'. 1 r ign curr nci � In t hi c.�ets of 'ot y m � c t er ~ fo nd 9,500.00, �11 , 500 . 09 nc }~ 35. 0; nd hi ir o 0 r v 20, �oo . oo. i l r 'i, in t 1 od. t cf � c t, us 2,515 00 an 95, 000.00 er ; nd in t of 1H� # u� S2,600.00 n 71,500.00 un � r utro- dmi... it c er �n .(1 t rit � fr t t ncr 1 I3 n. 0 th fo ign curr cie found in th ir 0 � Cons q nt y, i ur .roc. ding roc eding o . 1350- 76) ~a~ i\ titut d by h ur u of g in~ th s id f r i cu rerci ( oun ng . 1 in 11 t 105, 45 . 00 , 17 , 000 . }' 35. 0} r vio- 1ati n o .c i ..n 3 .&:. Centr n: Circt.il r o � I. .; on to ct n 0 (f) 0- h riff \ 2 nd Cu' t ' s Co e. . .r 1 h.arin , t arch 1 , '1', 7 , t Coll ctor 0 Cu f the i lnternation 1 irr..,ort r n r .d decisi n deer in b forf i- t r 0 ne jc re qn c r l ie - .t: r vi J 1 tic n h 1 . s, 1ich .cisi' n on by t iG r � ' s y r on nt 105

D C .... I � 2902 CT C ' E - 4- Commission r of Cus ms on June 30, 1976 _ o subse u nt motion for r consideration int rpos d by p titio rs were of no avail. Hence, the pr - sent appe 1 . The issue for judici al d t r .in tion is \he- th r or not th subj ct foreign currencies (or fo- r ign exchange) found in the possessi n of subject Jap n se tourists hil bout to depart �rom the country in January 1 76 , nd who hav no per it OE . authority frc m the Central ank , ar subject to forfeiture for violation of s ction 3 f Central an Circ lar o . 265, in relation to ection 2530 (f) of th Tariff and Custc...ms Code , as amend d by Pre- sidential Deere ~o . 34, which p rovid as fell s: � 265 XX X X x _x :x 3 . o p rson sha 1 take out or export from the hi1ippines foreign curr ncy or any other foreign xchang' except as other- wise aut c riz d .by the C ntral ank . -X X XX XXX nd Custcms Cod EC . 2530 . - Pro or- iture Under Tar ff nd Customs Law. - ny v hicle, vessel or aircraft, cargo, rticle and other obj ct , sh 11, under the follcwing c nditic ns be subject to forfeiture: XXX - XXX X X 10G

DECI...,IO CT CA E o . 2902 - 5- (f) Any article th i m. ortation or xport tion of wh ich is eff cted or atte upt d contrary to law, or any article ot prohibit d importation or x ortation, nd a ll ether articles which, in th op inion of th Collec- tor, have be n used, r or re ent r d to be used s instruments in t he i mporta tio n or ortation of th form r; XX XXX X XX In a nutsheli , the osition of petitioners is that th re was no violation of Central Bank Circular No . 265 ; h nc , forfeitur under ...,ection 2530 ( f) of the Tariff and Customs Code is ~ithout basis or merit . In th ir memoranda, it is str ssed th t C ntral ank Circular to . 265, which was issued by the Central Bank of the Philipoines on ovember 20, 1968, was implemented and amp lified by Central B n Cir- cular o . 266 on ov mb r 26 , 196 , r uiring tern- crary visitors t accomplish curr ncy declarations . ut this Circular (c . � Circular o . 26 ) was com- plet ly rep aled nd revoked by Central ank Circu- lar Jo . 270 on .Pril 16 , 1969 , thus doing a iay with th curr ncy declar tion r qu irem nt . urth rmore, S ction 6 of C ntral Bank Circular No . 265 , w s amended by Centr 1 Bank Ci-rcular L~ O . 273 on ril 25 , 1~69 ; and on July 19 , 1976 , the Central ank iysu d Circular No . 534 , ' expressly providing that the provi~ion p rohibi ing the t king or s nding out ) of th hi1ipp ines o f �or ign xch ng without

� D CI lOt - CTA C uE NO . 2902 6 -� sp cific authority from the Central Bank sh 11 not apply to t ourists and non-resi ent tem orary visi- tors who re taking or s nding out of the Phil i ppines their own for ign exc hange r ught in by them . Thus , acc o r ding t o petitioners , ection 3 of Central Bank Circular �o . 265 has , like�ise, been repealed, and it is c lear that at the time this i ncident occurred on January 11, 19761 tourists c r non - resident tem~orary visitcrs may bring in and take out of th hilippines any amount of foreign exchange provi ded that the foreign currency or exchang they bring out does not exceed hat they brought in . And inasmuch as the foreign currencies found in th ir possession while about to depart from th c ountry were brought in by them from Japan, p titioners claim that th re was no violation of Central ank Circ lar ~o . 265 , in relation to Sec- tion 2530 (�) of the Tari.ff ann Cus toms Cede . etitioners ould furt er capit lize on the f c t th t they have not ben prosecut .d criminally for violati n of th C ntral Bank -c irculars , which alleg edly proves and indicat s tha t ther is no factual .or legal basis f r the forf iture of the c onfiscat d for i gn curr .ncies . espondent .. on the other hand , maintains in his memorandum th t: (1) while Central B nk Cir- 1 08

., DECl...,I CT CA.3 �o . 2902 - 7- cular o . 270 d ted pril 16, 1969 revoked Central Ban Circular No . 266 and thus abolish d the cur- rency declaration requir ent for touri s ts and n n~ r sident t ~crary visitors , this d id not , in ny way, revoke or r p 1 Centr 1 nk Circular �o . 265, ~ ction 3 of which vrohibits the taking out or ex ortation of for ign exchange without prior uth rization fro. the Centr l Bank; (2) th non- filing of cri inal charges gainst petitioners was on account o the fact that the govern .ent had in- sufficient evidence on how the subject foreign cur- rencies w r obtained loc lly and, further , th t th p nal provision of C ntral Bank Circul r o . 265 (,sec . 6) does not apply to tourists or non- r si ent t orary visitors; and (3) the provi- sions f Central Bank Circular No. 534 d ted July 19 , 1976 are not plic ble to the instant ca e (\vi ich hap ened on J nuary 11, 1976) because said Circular has no retroacti e a plication, and, ev�n ssuming th t such circular ha � retroactive effect, the same c nnot b av iled of by petition r b - , cause they have not sufficiently and satisf ctorily shown that the subject foreign exchange wer brought in by them. he Court is of th p�rsuasion that pri r to the issuance and effectivity of Central Ban Cir- cular o . 534, the rovi ions of uection 3 of 10 9

DEC ,;;,l � 2902 CTI c SE - 8- Central ank Circul r No . 265 had not been a nded nor rep aled by the subsequent circulars of the Central Bank . o , on January 11, 1976, when this c se r s , s id Section 3 of Central Bank Cir- cular to . 265 was still in fore and in eff ct. A perusal and an lysis of th pertin nt�prcvisions of the Central Bank circulars involved clearly indicate nd d � onstrate the basis for this deduction . Central ank Circular � 265 dated Nov~nber 20 , 1968 XXX XXX X :X X 3 . o pers n hall take out or export from th Philippines foreign c urrency or ny other foreign exchange excep as otherwise authcrized by the Central Bank . XXX X X XXX 6 . Strict observance of the prcvisi ns of this Circular is enjoin d ; and ny resi- dent per son, firm or corporation, w o , being bound tc the observanc thereof, or of such . other rul s , regul tions or directives as may hereafter b issued in imple1. entation of this Circular, shall fail or r fuse tc conply ith, or bi e by, or shall viol te the same, shall be subj c t to the. penal sanctions pro- vid d for under Section 34 of the Central ank Act . (unaerlining sup lied. ) Central Ban Circular o . 266 dated November 26, 1968 In implemerttation of the prov~s~ons of Central ank Circular o . 265 dated ov mb r 20, 1S68, th follo ing rules nd regulations are hereby promulgated: 110

. D CI ,I t - CT CA3 NO . 2902 - 9- CTIO 1 . ( ) very hili pine r sident departing from or returning to the Philippin s from abro d and ev ry t rnpor ry visitor enter'ng the Philippin s , including members of the crew or com- ern nt of vessels and air 1 nes eng ged in internation 1 trans ortation, shall ccomp ish a Currency Declaration on C orm o . 303 nd shall decl re on this form all hilippine currency and foreign exchange c rried by the Declarant. X XXX -. X X X (c) T mporary visitors H �� , 11 p rs ns who are not resident~ o� the hilippines) enter~ng th hili pin , including memb rs of the crew or ccnple- m nt of v ssels nd airplanes engag d in interna~io al trans ortation , sha 1 ex- hibit t e r cccmplished Currency Dec- laration tc th Central Bank represen- tatives at t ' pier or iroort of entry who sh 11 stamp th Curr ncy o_claration nd ret in the stub. Th visitor sha 1 keep his Currency eel ration during his stay in the country . He m y carry with him all the foreign eYchang declar d by him in his Curr ncy Declar ti n , but to m et his local currency n eds during his stay in the hili pines , h shall s 11 forei n exchang for Philippine peso only t u h rized ag nts of th . Central ank . e hall not take out of th hi- lippines foreign e change in excess of the amount brought in by him . At the time o his departure from the country, the ter. ., orary visitor or memb r of the crew or com};lewent o a vessel or air- planJ ngaged in int rnaticn 1 transpor- tation sh 11 surrender his Currency Dec- lar tion t the Central Bank rep res nt - tiv s at the pier or air ort of de artur � Central ank Circular o . 270 dated April 16, 1969 ursuant to esolution o . 594 dated pril l , 1969, of the t1onetary oard, Cir- cular ~o . 266, dated Nov mb r 26 , 1968 , is hereby revok d , ef ective im � diately . 11 1

� 2902 - 10 - I H nceforth, no currency decl ration of ny kind shall b required either from out- going or incoming p ss ngers . 27 3 ursuant to the provisions f Republic Act o . 265 nd by unanimvus vote of the Mo- n tary oard, an with th approval of th resident of th Philip ines an in accor- dance ith ex cutive and international ag- ree~cnts to which th R public of the hi- lippines is p rty, the fo lowing regula- tions re hereby 'promulgated: XXX X X X. XX SEC . 2 . ection 6 of Central B nk Circul r o . 265 dated November 20, 1968, is her by mend d to re d s follo s: "6 . dtrict observance of the pro- visions of this Circular is -njoined: and any person, firm or corporation. who, being bound to the obs rvance thereof, or of such oth r rules , r gu- lations or directive as may hereafter be icsue in impl entation of this Ci rcular, sh 11 fail or refuse to com ly with, or abide by, or shall violate the same, shall b � stbject to the penal s nctions provided for under Section 34 of the Central ank ct . 11 ( hasis su plied . ) Central Bank Circular o . 534 dated July 19, 1976 .X X X XXX XX ection 3 . Unle s specifically autho- rized by ~he Central Bank or allowed under existing internati nal greements or Central B nk regulations , no person s all take or ' transmit or att mpt to tak or transmit foreign exchang , in ny fo , out of the Philippines dir ctly, through other persons, through the mails, or through international carriers . 112

DEC! .... . 2 9 02 cI - 11 - 'l'h provision f tt is ction l 11 not .,., ly ouri t nd non-r id nt t v� itor 1 re t king or w nding por out of the hilip in s th ir own foreign _ exch n brought in v th m. XX XXX XX ~JCCtion 6. ion of xi ting c ntr 1 nk ich r inc n- ul tion sistent r h reby rev Ed n /or mo J. i d XXX XX XXX ill o d, ection 3 of c ntr 1 nk Circular o . 2 5 do s no~ rn n qu 11 icati n in p rohi i 'ng th t ing out or xport tion o any f r ign curr cy r for i e c ng it. ut u h rizatton r m the C ntr 1 nk . It tate in n r~l t rms n ith ut uali...icati n: "no pers n" � and t i pl inly nd cl rly includ s f r i_n tourist nd n n-r si n t or ry visi- r h nd., Section ther of m e tors . n tr o referenc only to " ny resi ent p r on , f rm or cor~or ti n. " otbin th re i aid of tourists nd n n-r si nt te or ry v~si-or � This c n only an to re r, in far th plic b lity of th p nal or crim~n 1 li bility is concer. d ., t o r ~id nt rs n � ourist nd non- re i racy visi or r not r sid nt r- he non-im s t n of th en 1 nctions un er ~ ction 34 f the C ntr 1 � an ct in t touri ts n n n-resid nt t r r vislt rs for 113

c 1' � 2902 - 12 - irc�l r not obs rving th- revisions f tl r ui e by . ction th r of not th r for a � ct h rohib tion ag nst ~ ch tourist nd n n-r nt t or ry vi.:i1t: r rn t � ing out or x orting fr m th . 111 ig cur ncy or ny cth r xch ng r u noriz ct by t C n r 1 nk n er ction 3 of Circul r s th 0 ing ly t , . Centr 1 n � Circ �lar o. 266 i m.r ly n i pl"- r nting c i rcular c c ntr n � ire r o . �265, om~lg t ng h ru nd r ll i on or th n- . ore nt tt re f. Th Curr rcy cl r tic.n r qui nt pr vi e t r 1n i i to rr. k mor - f ctiv Circu ar o . 65 a no id r uir rr~en is n t ctu ly in ict or incon.;;.L.. t nt it revision of th~ la t r. r vi i ns of Central ank Circul r �o. 266 n ither xpr no i 1 n men n or r p al f the provi- 1 ns o , ection 3 o C ntr 1 an Ci:r:cul r o . 265 . hu , t e revoc tion thereof by Centr 1 nk �circular o . 270, thereby a olL ..in th curr ncy cl r ticn r ir nt, di not, t 1. f - ct re 1 or r voc i n o Circ1l r � 65, r- icu rly .::> ction f. Th r lin c ..... i Court in c of on 11 4

D CI ION CTA C S O. 2902 - 13 - Z lman vs . olando G. Geotina , C . T . A. Case No . 2394, January 1 , 1976, which involv d forfeiture of foreign exchange or violation of ~ ct1on 3 of Central ank Circular o . 265 and Section l(c) of C ntr 1 Bank Circular o . 266 , in r lati n to Section 2530(f} of the Tariff and Customs Code, plainly indicates that, apart from Central ank Circular o . 266 and despite its revocation by Central ank Circular o . 270, ection 3 of Centr 1 ank Circular No . 265 has not been affected nd, � therefore, is still pp icable at the time perti- nent to this case . aid this Court in that cas : t any rate the bills and for ign excl ang in question are subject to forfeiture under ection (three) 3 of Central ank Circular o . 265 in relation to Section 2530 of the T riff and Cust ms Code . Said Circular , is- sued by the Central ank pursuant to the powers vested it by its charter, is ubject to nforce nt by the Bureau f Customs and forms a part of our Customs Law. Violations thereof comes within the purview of 'ection 2530 of the .Tariff and Customs Cod although the circulars do not provide fer confiscation -in case of violation thereof . x x x. Thus, the export tion of dollars with ut uthority from the Central Bank, which is prohibited by ~ecticn 3 of Circul r o . 265 is sub'ect to forfeitute in favor of th government und r Section 2530(f of the Cus- toms Code as exportation ffected contrary to law. For this it suffices that petitioner is c ught att pting to bring ut of the hilippines dollar�bills and foreign exchange without authority from the Central Bank . Section 3 of Circular o . 265 covers all man- ner of ex, orting foreign / eY.C� ange without authority fr m th Central ank , wh ther it is brouqht out by outgcinq passengers , or sent throu h the mail or hidden in car o sent bro {Underlining sup lied . 115

C 1N � 2902 C':t CA �s1 i -l Cir- rly, th {..., u nc of c ntr 1 cul r N � 27 on '"r.i.l 2c, l 9, m n ing t e p nal pro 1 ions un r _, ction o� Centr l nk Circul r� � 265, id nc t ct th ... l l~c bi- i y of � ct n 3 th r f . ~ id � nd�. n � hich, in ct, 1 a e th n 1 ncti r.o p , lie bl to in neral, in... t u li iting th am t � , ,1, f i rrn or cor, r ion p ior to t tn nt, the r or cl rl d n - t r t s , int nticn an <-licy o .. th Centr 1 Jc to n ain n r vit l i th n.r..orc bili y of !J c ion 3 of C-ntr 1 nk Circul r o . 265, tc s bject t crimi al li bil.ity Vi l ticns th r of v n s ainst t uris ru . n-r . i nt Inde � it m ., b ccnc d d tl at d1.t th 1.� s .1 nc 'j c tr n Circu.L r o. 534 on July 19, 1.76, rti 1 am tc ct � n 3 of Centr 1 s n.'k Circul to. 26 5 my ~ v n �f Ct"'..:l� Circul r or th hil i c ion f c ntral n ic ti n, .o. 5 .. �r y. on it l ut 'i its ny p roon fr m � .P r ing or t }ing out of t c u ry ny for Ln XC' ng unl ~ utho- riz { y th Cen ral an}. e ti n c ~ nt . 1 0 n}: cir�cul r N � 534 .,t ich , in L .. rti n, ai ..,t in ff ct, r 1 �r t d t I( ..r hi i ion the t � in ut 0 f iQn xch.ng as 1�rovi d in 11G

EC ~10 CT.A CAS 1- � 2902 - 15 - 3ection 3 of C ntral Bank Circ lar o . 265 , express- ly provi es in its seccnd portion or paraaraph that: "The provisions of this ~ection s all not a �ly to tourists and non- r sident tern crary visitors o re ta�ing or s nding out of the Philip ins th ir own for i n exchange brought in by them . " In oth r wor s , un er ~ection 3 of Central Bank ircular o . 534, tourists and non-resident tern crary visit rs ho re bringin or sending out of the Philip ines their own foreign xchang brought in by them are not requir d to secure a specific authority fr m the Centr l nk . iowever, as correctly cbs rved not have a retroactive orovisi n and it can net, therefor , be given retroactive effect. It is w ll settl d that st tut�s have no retroactiv effect unle s other ise provided therein . (Espiritu vs . Cipriano , No . L- 32743 , February 15 , 1974, 55 ~c A 533 . ) Conse uently, since the law ap licable to this case is s ction 3 of Central ank Circ lar o . 265, there was cl rly a violation thereof when peti- tioners attempted to xport out of th country th subj ct foreign exchange without an uthority from the Central Bank . The said for ign exchange ar 117

D c � 2502 1rstly, - 17 - videnc rr- . nt ,;,).h wn by th y t c tral Bapk 1 y rs . .c cell b rat d ith th Cu t I' 1 y rs rin izur .~roc edings , t. f ch n 1 w of J J? n r trict n limit .h .ount o or ign c ng. n cu r cy th t J n r sid nt �tr v ling brc d my b in out of J n. $1 nts of J- n y urch s fer i curr tCi s fer Xtt ns in c .,nn ctic n 1it tr-v 1 bro d up to u Sl , SOO . CO a t.ri , ubj ct to 1 d �t n r 1 n exch r J<; n. i- c ti ns i c f . erson trip r h .rcval o th D nk of J n . oth resi .nts and cf J pan .�y ak out rely � to Jo , o�o.oo J Jan s y � nd id r ident tr v ro d ir p b (.... e 56th nnu r1: o n ch n es riction , ntern ti al n t r:y und , .. L-xh- . ington , 1 7 , � 276-2 0 11 n to " , p � 335- 3 , old r � Custo ' r c~) In thi ca it h b sta l i h d , n unc ....n rev rt d , th t h mo nt of r ign XC �nc ~ inc'ic t d in the pas ....vrtS 0 titi n rs 'It/ n tn 1 arrived in th hili i on D c 29 , 1S75 r s fcl ow o . 283759 � � 3 4, ol r 3, � 119

D C IO CTA C E N � 2902 - 16 - ther for s bject to forf iture under Section 2530(f) 0 th riff and Customs ode . Petitioners � defense that they re Japan se tourists or non- r sid nt tem �orary visitors taking out th ir own for ign exch nge brought in by th m c nnot su fice to ~e feat the express and uncual fied revisions of S c - tion 3 of Ceniral Bank Circular No . 265 th t " o pers n shall take out or port from 'the hilippines foreign currency or any other foreign exchang ex- cept as other ise aut orizea by the Central Banku , because, admittedly, th � had no authority from th Central Bank to bring out of the Philippines th said foreign currencies . And, certainly, to petitioners may well apply the r ling of this Court in the ca e of L on Zelman vs. land � G. Geotin , suEra, for which th y are similarly situ t d . At any rate, even assuming arguendo th t , at the tim tl is incid nt occurred, th polic. of th Central B nk to allow tou ri~ts or n n-r ~ id nt tern- por ry visitors to bring out of t c untr th foreign eYchan br ght in by the1 al re� dy existed, 1 the Court is net inclin d to beli v that the foreign exchange in ,cu -.. ti on , invr lving as they are substantial amounts of Un ited ~tat s dollars and Ja1 anes y n , w re bro� ht in by petition rs . 118

DECivl CTt . C ...., NO . 2902 , - 18 - Mikio awa - assport M No . 1076831 $1 , 000 . 00 ( h . "8" , p . 302 , Fold er 3, Customs rec . ) Fujiko Nawa - assport ~E - o . 1076832 $50 0 � 0 0 ( Xh e 5 II II # P � 3 0 5 I older 3, Cust ms r c . ) asayoshi Iwama - Passport M o . 1614644 $900 . 00 ( xh . 7 11 11 p. 303 ,. Folder 3 , , Customs rec . ) v i dently, th f cts milit t against the theor y of petitioners that th. large and exce sive amounts of foreign exchang th ~er taking out of the Phi lip ines on Januar y 11, 1976 er the foreign curr ncies or foreign exchange brought in by th m. �Secondly, if the foreign exc ang in q uestion were brought in by petition rs and that petitioners ere th n allowed� under Central ank laws to bring them out even without authcrity from the Central Bank, it is v ry intriguing , indeed, and difficult to un rst nd why such foreign exchang ha b-en clan estin ly and m t i culously conc e l d in th ir persons and suitcases so much �so that at the de- parture area f the anila Internaticnal Airport, petitioner h d to deny to the customs examiners b fore ac tual examination t hat they h d dollars wi th them . fuat were they afraid of? Aft er all , as gain sh' own in the pass orts of Nas yoshi Iwama (the Japanese who could under tand and spea �Engl i sh) and Mikio Nawa (see xhs . "T" t o "T-7 " , i nc lusive, pp . 318- 325, Folder 2, Customs rec .; and ,

D Cl � (2 -1 older in .. F. � " to .. U- 6'' , inc u iv ' PP � 314- 317, 2, Cust', s rec . ) . th y h b en to th hi s v r 1 tL s prier t th ir rriv l on 0 c r 29, 975. and tl y n ' or ou ht to no .ore or le s h or i �n e ch n l w nd r ul tion of the C ntr l Bank. cially cone rn~ng uri t nd n n- r 1 nt t mp r ry vjsitor � i rdly . hi1 th r c rd c � t 1 ur u of Custo 's relating to this c ~e do n t s ow, by direct vi nc � nn r a t c low t 1 for�1cn xch~ng in ue tion w r o t in d lo lly, th in or r who n w and t in f rm tin reg ring tli m r wr r m d t t ~tify . ut nly th s id i f or. ation a n m ly: rino D o n ~ixtc rn ho cut d . ( . �.orn vit o t is c , II tt 327, Cu loer 2) , th 1nf~r ticn s to h iaentitie' s ~f th n s c nc rn d , p r- i w m n of 1 n o o oy m , th l ..ount o f Uni d .-t es do th t:h y c rryin � p roved to cor- rect n ly s by i ( enc � h ~ith h f cts nd and eire rn t nccs alr y could 11 c~ ribut to h ~ ro csi n , i f n t conclu ion , that t for ign curr nci es in u stlun id not . com fro ith t t r witn in t � 12 1

DECl - lON- CTA dE O. 2902 - 20 - Fo~rthly , p titioners themselv s never ap- p ar d to explain, nor were th y presented by th ir counsel during the seizure proceedings in the Bureau of Customs or the hearing before this Court, to testify for th ir defens , es ecially as _to the source and th justif ication of the 1 rge sums of for ign exchange b ing taken out by the � Much stress was placed by them on the tes- timony of certain Maj r rnistoso of the Philippine ir Force that the foreign exchange in question were bought by petitioners from th black market in Japan . (see pp . 11- 16 & 22 , Folder 4, Customs rec . ) Howev r, Amistoso ' s testimony on this point did net f come from his own personal knowledge but only as al- legedly told to him by petition rs themselves . And in his prev ious direct examination on ebruary 4, 1976, Major Amistoso , who testified that he con- duct d n interview with petition rs in written questions and ans1r1 rs in the afternoon of January 11 , 1916 (see pp . 93-99 , Folder 4 , Customs rec . ) , wh n qu ried by petitioners ' counsel wheth r he had asked the question, and received an nswer from th m, where the foreign currency came from , could not even recall having prop unded such� a question . (See pages 83- 93, older 4, Customs rec.) . Apart from these, it was insisted several 122

D C.J. ION - CT C S o. 2902 - 21 - times by counoel f r the ureau of Customs that the best evidenc on th matt r involved in the int rview of p titioners would b the written state- m nts of p titioners t .ems lves s tak n don by said witn ss. but th same were n ver presented or off red in videnc � (see pp . 83- 93, ld . } V r1ly, the hearsay natur of istoso ' t stimony as to the source of the su~ject foreign xchange, cou led by th fact that the written st t nts of petition rs all gedly ta en down by him during his interview were not prod ced an pre- s nt , and the ambig uity and uncertainty exhibited by said witness in his previous t stimony on di- rect xam n tion. cast not only a cloud of doubt on th truth and credibility o f his sworn tatenents but also impaired th prob tiv value or weight of said 1itn s ' testimony . And to th mind o the Court, the black market theory was par ntly con- cocted and conceived to erve as a disgui e or cov r - up to th reality that p titioners could not hav brought into the l:hili pine;:) these large sums of foreign xch ng becau~ th foreign excha nge laws of Japan r strict and limit the amount of foreign currency which Ja anese nationals and r - sidents could bring out of Japan, w1ich is ordi- narily l , Soo.oo . In fact, as marked nd indica-

DECI.SICI - CT CAS NO . 2902 - 22 - t ed on th ir passports, � none of petitioners had be n aut1oriz d to bring out of Japan re than US$1 , 000 . 00 e ch . Finally, p titioners � defense th t they were not pros cute criminallY for violation of th Central Bank Circular is not - material nd rel - vant to this proceeding . s st ted by respondent on p ge 4 of his memorandum, the non- filing of criminal charges g inst p titioners was du to th fact th t the overnm nt had insufficient evi- dence on how the subj ct foreign curr ncies ere obtained lee lly . Further, s ction 6 of c ntr 1 Bank Circular o . 265 (p n 1 sanction) ap lies, according to .res on ent, only to resident persons and not to tourists or non- resi ent temporary -vi- sitars . t any rate, a forf iture roceeding , as sanction d under our Custo s Laws , is 1Q ~ or on dir cted against th ~ and the .articl or property, in such pro�ceeding, is conoidered the offender . (Lo ez vs . Commissioner of Cust~ms , CT Cas No . 1933 , Dec m er 17 , 1 71 ; citing Trias , � et al , vs . cting Commissioner of Cu terns , C1 Case o . 1413 , rch 18, 1964; Ampere Trading vs . Com- missioner of Customs , CT Case o . -1959 , March 27 , 1972 . ) Said proc ding is indepen nt of and is wholly not ffected by any criminal proc eding 124

DECl IO CTA CA.:, 0 . 2902 - 23 - in personam � . etition r has lost sight of the fact that his act of ~~"importing contrary to � law" ent il two penalties-- one p en lty for _vio- l tion of Central Bank Circular No . 44 s pr scribed by Jection 34 of Republic Act o . 265 directed princi ally against th person of th offender and which may be had in a cr~minal rosecuticn involving an action in personam, nd the other penalty of for- feiture imposed by ~ection 1363(f) of the Revise Administrativ Code directed prima- rily ag inst the goods rather than the off nder and which may r e had in action ill ~ (see Origet vs . u� '' . , 125 us 240, 246- 247; 31 L. Ed . 743 , 746- 747) . The two pe- nalties being distinct and different, the forfeiture may be nforced against the goods by proc edings !� �__ ind pentlently of the criminal prosecution against the offender (Origet vs . U. w. , supra) . The imposition of one does no preclude the imposition of the other, for it is a well- establish d rule that forfeitur proceedings stand independent of and are \vholly unaf f cted by any criminal proceeding !n p .rsonam (23 Am . Jur . 618) . For while punishment for the crim and for- feitur of the goods might be ccinci~ent , th y are n t necessarily so ( u .~. vs . 25 Ikgs . of Pan a Hats , 231 u. ' � 358, 362 , 58 L. Ed . 267 , 269) . Thus, while it is true that the Bureau of Customs is not au hurized to im~ose th penalty prescribed by section 34 of Republic Act to . 265 for violation of Central Bank Circular No . 44 , there is nothing to preclude the Bur au of Customs from im o- sing the penalty of forfeiture of th goods or merchandise th im ortation of wnich h s been eff cted or att mp ted contrary to 1 w in accordance with section l363(f) of the Revised dministrative Code . (See Pascual vs. Commissioner of Cu terns , 114 hil . 953 , 95 - 959 . ) forfeiture proceedin is, furthermore, civil in nature (f.lanuel Bastida vs . cting Commissioner of Custom and the Court of Tax ppeals , o . L- 125

D CI...:>lON - CT CA~ � 2902 - 24 - such, 24011 , ctob r - 24 , 1970 , 35 �c A 448) and , proof b yond reasonabl doubt to establish con- viction or a finding of guilt is not requir d as in a criminal case . M re preponderance of evid nee showing probabl cause for the violation is suf- ficient in such proceedin � In seizure cases, on important s- pect of th proceedings in th c nsider- tion of the issues invo lved, io th duty on the part of the government of presen- ting evidence hich indicates probable cause for instituting such proceedings . ( �ee u.~ . vs . One B g of Paradise and Ghour Feath rs , �� , 256 F . 301, 167 c . c . A. 473 ). nd the term "probab~ cause", which has been h ld synonymous with 'rea- sonable cause" , means 1 ss than vid nee which will justify con e~nation . It im- ports a seizure made under e ire mstances which warrant suspicion (~ock United t tes, 7 Crank LU - ~~339 ). x x x. (Sanc h z vs . Comm . of Customs , TA Case o . 185, ov. 2, 1954; affirmed , G.R. o . L- 855 , ~ept . 30 , 1957 , 102 Phil . 37 . ) As a matter of fact , there is� another ettled prin- ciple th t acquittal in a criminal case is not a bar to a forfeiture proceeding against the article . (C . R. ~ha rp & Co ., Inc . vs . Commissioner of Customs, C . T . A. Cas No . 1309 , August 17 , 1964 ; affirmed in G. R. No . L- 23803, Feb . 26 , 1968 , 2? SC 760 . ) In finding the s bj ct foreign exchange for- feitable, it might be stated in p ssing that while th policy of the government is to encourage tourism in order to enhance the flow of foreign exchan~e 126

DECL->I N CTA C "E 0 . 2902 - 25 - into the country, the taking or sending out of foreign currencies brought in by tourists themselves should as much as .posr.ibl be without restriction ( or regulation . Expec tedly , tourist~ have to spend during th ir stay here the for ign exchang , or part of it, brought in b y them and, logically, when they dep rt fro th ccuntry, the forei n currency taken out by th shoul be less than what was brought in . The taking out of more than the amount of foreign exchang brou~ t in by a tourist cannot but therefore h lp cr ate the ~uspicion that h is bringing out the foreign exchange reser es of the country . Accor ingly, the decision of respondent Commissioner of Customs atcd June 30, 1976 decla- ring the forf iture in favor of the Government of th su � j ct foreign curre .cies consisting of u~ $105, 145 . 00 ; 178, 000 . 00 and H S35.00 seized from petition rs aneo ~otoyama , r. ikio Nawa , Fujico a a and asayoshi Iwama , and covered by Seizure Identification o . MIA 1350- 76 of the Bur au of Cust ms , for violation of Section 3 of Central Bank Circular No . 265 in relation to ciection 2530(f) 127

OECi c~ ILN - CT CA N � 2902 - 26 - of the Tariff and Customs Code should be sustained . i'lHEREFuRE , the judgment under r view is here- by affirmed at p titioners ' costs . SO ORD ' RED . u uezon City# April 23, 1979 . ~:~ ~ Acting Presiding Judge I CONCUR: I} -- -.C?.7- CONSTANTE {C. R A U! ssociate Judge 128