2003 Q4 | Narrow Channel | Portcalls - the Philippines only Shipping and Transport Guide

::Opinion::

Narrow Channel discusses landmark cases related to the transportation industry. Contributor Atty. Joey T. Banday is vice president of the Maritime Law Association, and in-house legal counsel of the Pac-Atlantic Group of Companies.

You are now in: Narrow Channel Archive : 2003 Q4

*Carrier liability for lost cargo with undeclared value (December 15, 2003)

*Some Q&As on the Anti-Money Laundering Act of 2001 (October 6, 2003)

Carrier liability for lost cargo with undeclared value (December 15, 2003)

WHAT is the liability of the carrier for loss of or damage to cargo where its value is not declared in the bill of lading?

The liability will be those stipulations in the covering bill.

On or about 8 January 1981, Sea Wind Company , a shipping and forwarding company in California, received from Sea Lion Trading Company, a shipment consigned to Mr. Peter De la Cruz of Cebu City, Philippines.
The shipper did not declare any value in the bill of lading. And the shipment was described as "8 CTNS on 2 SKIDS-FILES".

The shipment arrived in Manila on 12 February 1981 and was discharged into the custody of the arrastre operator and port authorities. But the shipment was stolen and was never recovered.

The consignee made a formal claim upon Sea Wind Company for the value of the lost shipment. Sea Wind Company offered to settle under the package limitation clause in the bill of lading.

Mr. De la Cruz rejected the offer and filed a case for damages against Sea Wind Company with the Regional Trial Court of Cebu. The trial court rendered judgment in favor of Mr. De la Cruz ordering the carrier the pay him the value of the lost cargo.

Sea Wind Company appealed to the Court of Appeals. But the appellate court affirmed the decision of the trial court.

But Supreme Court ruled in the following tenor:
" x x x
Since, as already pointed out, Art 1766 of the Civil Code expressly subjects the rights and obligations of common carriers to the provisions of the Code of Commerce and of special laws in matters not regulated by said (Civil) Code, the Court fails to fathom the reason or justification for the Appellate Court's pronouncement in its appealed Decision that the Carriage of Goods by Sea Act "x x x has no application whatsoever in this case". There is nothing in the Civil Code which absolutely prohibits agreements between shipper and carrier limiting the latter's liability for loss of or damage to cargo shipped under contracts of carriage; x x x

It seems clear that even if said section 4(5) of the Carriage of Goods by Sea Act did not exist, the validity and binding effect of the liability limitation clause in the bill of lading are nevertheless fully sustainable on the basis alone of the cited Civil Code provisions. That said stipulation is just and reasonable is arguable from the fact that it echoes Art. 1750 itself in providing a limit to liability only if a greater value is not declared for the shipment in the bill of lading. To hold otherwise would amount to questioning the justice and fairness of that law itself and this private respondent does not pretend to do. But over and above that consideration, the just and reasonable character of such stipulation is implicit in giving the shipper or owner the option of avoiding accrual of liability limitation by the simple and surely far from onerous expedient of declaring the nature and value of the shipment in the bill of lading. x x x".

Let us always remember that the limitation clause in the bill of lading will apply if the shipper did not declare the value of the shipment and without any deception on the part of the carrier.

For questions or comments, email the author at jtb@pac-atlantic.com.ph.

Some Q&As on the Anti-Money Laundering Act of 2001 (October 6, 2003)

With the advent of the Jose Pidal controversy, allow me to discuss the Revised Implementing Rules and Regulations of R.A. No. 9160 (Anti-Money Laundering Act of 2001) as amended by R.A. No. 9194. Here are some questions and answers:

Q. What is a money laundering offense?

A. It is a crime whereby the proceeds of an unlawful activity as defined by the implementing rules and regulations of the Anti-Money Laundering Act (AMLA) are transacted, thereby making them appear to have originated from legitimate sources.

Q. Is an NVOCC/Freight Forwarder a 'covered institution'?

A. No. Only banks, offshore banking units, quasi banks, trust entities, non-stock savings and loan associations, pawnshops, and all other institutions, including their subsidiaries and affiliates supervised and or regulated by the Bangko Sentral ng Pilipinas, Insurance Commission and Securities and Exchange Commission.

Q. If an exporter receives a remittance as payment of his goods in the amount of PHP500,000.00, will it be considered a 'covered transaction'?

A. No. A 'covered transaction' is a transaction in cash or other equivalent monetary instrument involving a total amount in excess of five hundred thousand pesos (P500,000.00) within one (1) banking day.

Q. In the same scenario, will it be considered a 'suspicious transaction'?

A. Yes, if any of the following circumstances exist:
a) There is no underlying legal or trade obligation, purpose or economic justification;
b) The client is not properly indentified;
c) The amount involved is not commensurate with the business or financial capacity of the client;
d) Taking into account all known circumstances, it may be perceived that the client's transaction is structured in order to avoid being the subject of reporting requirements;
e) Any circumstance relating to the transaction which is observed to deviate from the profile of the client and/or the client's past transactions with the covered institution;
f) The transaction is any way related to an unlawful activity or any money laundering activity or offense that is about to be, is being or has been committed; or
g) Any transaction that is similar, analogous or identical to any of the foregoing.

Q. What are considered 'unlawful activities'?

A. These are:
a) Kidnapping for ransom;
b) Violations of the Comprehensive Dangerous Drugs Act of 2002;
c) Violations of the Anti-Graft and Practices Act;
d) Plunder;
e) Robbery and Extortion;
f) Jueteng and Masiao;
g) Piracy on the High Seas;
h) Qualified Theft;
i) Swindling;
j) Smuggling;
k) Violations of the E-Commerce Act;
l) Hijacking;
m) Fraudulent Practices under the Securities Regulation Code of 2000; and
n) Felonies or offenses of a similar nature to the afore-mentioned.

Q. Who investigates money laundering offenses?

A. The Anti-Money Laundering Council (AMLC) which is composed of the Governor of the Bangko Sentral ng Pilipinas, as Chairman, the Commissioner of the Insurance Commission and the Chairman of the Securities and Exchange Commission as members.

Q. Who has the duty to report to the AMLC 'covered and/or suspicious transactions'?

A. Covered institutions shall report to the AMLC all covered transactions and suspicious transactions within five (5) working days from occurrence thereof, unless the BSP/IC/SEC prescribes a longer period not exceeding ten (10) working days.

Q. Can a person who reports a covered or suspicious transaction in the regular performance of his duties and in good faith be sued?

A. No.

Q. When may the AMLC apply for a 'freeze order'?

A. After an investigation conducted by the AMLC and upon determination that probable cause exists that a monetary instrument or property is in any way related to any unlawful activity, the AMLC may file an ex-parte application before the Court of Appeals for the issuance of a freeze order prior to the institution or in in course of, criminal proceedings involving the unlawful activity to which said monetary instrument or property is any way related.

Q. Can the AMLC inquire into or examine a bank deposit without a court order?

A. Yes, where any of the following unlawful activities are involved:
a) Kidnapping for ransom;
b) Violations of the Comprehensive Dangerous Drugs Act of 2003; and
c) Hijacking and other violations of R.A. No. 6235; and
d) Destructive arson and Murder including those perpetrated by terrorists against non-combatant persons and similar targets.

Thus, let us do our share in preventing, detecting and reporting money laundering activities.

For comments or inquiries, contact the author at jtb@pac-atlantic.com.ph.

You are now in: Narrow Channel Archive : 2003 Q4

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