CANCIO v.

COURT OF TAX APPEALS Indeed, given the underlying objective of the Foreign Currency Deposit Act, as amended, which
G.R. No. 73882 / OCT 22, 1987 / MELENCIO-HERRERA, J./FOREIGN CURRENCY DEPOSIT is to attract and invite the deposit of foreign currencies which are acceptable as part of the
UNIT/IAquino international reserve in duly authorized banks in order that they may be put into the stream of
NATURE Petition for Certiorari the banking system, it would be to defeat the very purpose of the law to place undue restrictions
PETITIONERS ROSA CANCIO on the transferability of such funds. The countervailing effect would be to discourage
RESPONDENTS COURT OF TAX APPEALS prospective foreign currency depositors to the detriment of the banking system.

SUMMARY. Petitioner’s family attempted to go to USA but were stopped by airport security In fine, Central Bank Circulars Nos. 265 and 534 requiring prior Central Bank authority for the
due to having a large sum of money (USD) in their possession ($102,900.00 cash and $600 in taking out of the country of foreign currency should not be made to encompass foreign currency
checks). The airport security confiscated the money under CB circular 265 and 354 stating that depositors whose rights are expressly defined and guaranteed in a special law, the Foreign
large sums of money cannot be taken outside the country without permission from the Central Currency Deposit Act (RA 6426, as amended). As a foreign currency depositor, therefore,
Bank. SC ruled otherwise stating that a person can provided they are Foreign Currency petitioner cannot be adjudged to have violated the aforestated Central Bank Circulars. It follows
Depositors who are allowed by special laws (Foreign Currency Deposit Act). that neither is there room for the application of Section 2530(f) of the Tariff and Customs Code,
as amended, which provides for the forfeiture of any article and other objects, the exportation of
DOCTRINE. Central Bank Circulars Nos. 265 and 534 requiring prior Central Bank authority for which is effected or attempted contrary to law.
the taking out of the country of foreign currency should not be made to encompass foreign
currency depositors whose rights are expressly defined and guaranteed in a special law, the
Foreign Currency Deposit Act (RA 6426, as amended). This is not to condone petitioner's failure to declare the foreign currency she was carrying out of
the country but just to stress that the Foreign Currency Deposit Act grants petitioner the right of
FACTS. transferability of her funds abroad except that she was not advised by her bank to secure, and
 The Cancio Family, while clearing through the Pre-Boarding (AVSECOM) Area of MIA with consequently was unable to present, the necessary certificate of withdrawal from said bank.
her husband and three (3) children to board PR 306 for Hongkong in the morning of June 12,
1981, was apprehended with One Hundred Two Thousand Nine Hundred Dollars DECISION.
(US$102,900.00) in cash, six hundred dollars (US$600.00) in two travelers checks, and one ACCORDINGLY, the Decision of respondent Court of Tax Appeals is hereby SET ASIDE in so
thousand five hundred (Pl,500.00) Pesos. far as it upheld the forfeiture by respondent Commissioner of Customs of the sums of
 Mrs. Cancio did not declare her currency which had already passed the Customs inspection US$102,900.00 in cash, and US$600.00 in traveller's checks, which amounts should now be
area which were placed and concealed inside the two fairly-sized carton boxes for local returned to petitioner's heirs, but AFFIRMED in so far as it reversed the forfeiture by the same
chocolates, securely wrapped and taped with tin foil-back paper official of the sum of P1,500.00.NOTES.
 In view of claimant's failure, upon being required, to present the Central Bank Authority, the
said currencies were accordingly confiscated and a seizure Receipt was issued to her; hence, NOTES
this seizure proceedings
 Cancio claims that was a foreign currency depositor at the Philippine Commercial and CB CIRCULAR 265 – Relevant Provision
Industrial Bank at Makati, Metro Manila, and that the subject foreign currency was part of the
total amount of US$116,000.00 she had withdrawn from said bank from May 14 to 27, 1981 for No person shall take out or export from the Philippines foreign currency or any other foreign
her travel and medical expenses in the United States via Hongkong. exchange except as otherwise authorized by the Central Bank.
 Petitioner failed to present to the apprehending customs authorities a Central Bank authority
to bring out of the country the said currencies while at the pre-boarding area of the Manila CB CIRCULAR 534 – Relevant Provision
International Airport on June 12, 1981 on her scheduled flight to Hongkong together with her
husband and three children. Sec. 3. Unless specifically authorized by the Central Bank or allowed under existing
international agreements or Central Bank regulations, no person shall take or transmit or
attempt to take or transmit foreign exchange, in any form out of the Philippines only, through
ISSUES & RATIO. other persons, through the mails, or through international carriers.
1. WON CTA had committed reversible error in upholding the forfeiture of the foreign
currencies in question – YES.
The provisions 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
Petitioner could not present a certificate of withdrawal at the MIA. As she had explained, them.
however, she was unaware of this requirement. And if she had wrapped her dollar currency
inside a chocolate box it was for "security reasons." Besides, as instructed in the Circular-Letter,
it is the authorized depository bank which should advise its depositors to carry with them the FOREIGN CURRENCY DEPOSIT ACT RA 6426 – Relevant Provision
certificate of withdrawal. CA found that petitioner has presented in evidence her foreign
currency bank book and her withdrawal cards which may be considered as substantial SEC. 5. Withdrawability and transferability of deposits. — There shall be no restriction on the
compliance for purposes of this case. withdrawal by the depositor of his deposit or on the transferability of the same abroad except
those arising from the contract between the depositor and the bank.