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Republic of the Philippines | RECEIVED

HOUSE OF REPRESENTATIVES
Quezon City _ 02 AUG 2016

SEVENTEENTH CONGRESS
First Regular Session

House Bill No, 2397

Introduced by Representative GLORIA MACAPAGAL ARROYO

AN ACT
DEFINING THE CRIME OF ECONOMIC ESPIONAGE AND PROVIDING
PENALTIES THEREFOR

EXPLANATORY NOTE

‘An integral part of a country’s commerce is the development of proprietary
economic information. The development, protection and lawful exchange of such
information is essential to the competitiveness of critical segments of Philippine
business and industry

It is therefore important to safeguard such from theft, misappropriation and
wrongful use specially from foreign governments and their agents or
instrumentalities since it can cost our economy millions of pesos each year.

At present, our laws do not give adequate protection to proprietary economic
information. It is the intent of this proposed measure to prevent economic
espionage by advancing the development and lawful use of Philippine proprietary
economic information by protecting it from theft, wrongful destruction or
alternation, misappropriation and conversion by foreign governments and their
agents or instrumentalities

Due to the urgency of this bill, its expeditious passage into law is earnestly

requested.
GLORIA MACAPAGAL ARROYO

2" District, Pampanga



Republic of the Philippines
HOUSE OF REPRESENTATIVES
Quezon City

SEVENTEENTH CONGRESS
First Regular Session

House Bill No._230'7

Introduced by Representative GLORIA MACAPAGAL ARROYO.

AN ACT

DEFINING THE CRIME OF ECONOMIC ESPIONAGE AND PROVIDING
PENALTIES THEREFOR

Be itenacted bythe Senate and the House of Representatives of the
Philippines in Congress assembled:

SECTION 1.Title. —This Act shall be known as the “Economic Espionage
and Protection of Proprietary Information Act of 2016.”

SECTION 2. Statement of Policy.-It is hereby declared the policy of the
State to prevent economic espionage and further the development and lawful use
of Philippine proprietary economic information.

SECTION 3. Definition of Terms.-As used in this Act, the term:

a)

b)

¢)

d)

“Foreign corporation, institution or instrumentality” means any
corporation, agency, component, institution, association,
instrumentality, or legal, commercial, or business entity that is
substantially owned, controlled, sponsored, commanded,
managed, patronized, dominated or chartered by a foreign
government or subdivision of a foreign government;

“Foreign agent” means any officer, employee, proxy, servant,
delegate, or representative of a foreign nation or government;

“Person” means a natural person, corporation, agency,
association, institution, or any legal, commercial, or business
entity;

“Proprietary economic information” means all forms and types
of financial, business, scientific, technical, economic, or
engineering information including, but not limited to data, plans,
tools, mechanisms, compounds, formulas, designs, prototype,
processes, procedures, programs, codes or commercial
strategies, whether tangible or intangible and whether stored,
compiled, or memorialized physically, electronically graphically,


e)

9)

photographically, or in writing provided that the following
coneur:

1) The owner thereof has taken reasonable measure to keep
such information confidential;

2) The information is not available generally to, or accessible
by the public; and

3) The information is not a matter of public concern.
“Owner” means my Filipino person or any Philippine
Government compound, department, or agency in which,
rightful legal, beneficial, or equitable title to, or license in,
proprietary economic information is reposes;

“Filipino person” means —

4) In the case of a natural person, a Philippine citizen or a
permanent resident alien; and

2) In the case of artificial person, a Philippine Government or
by Filipino citizens or permanent resident aliens, or
incorporated under Philippine laws.

“Economic Espionage” is committed by any person who’

1) Steals, wrongfully appropriates, takes, carries away, or
conceals, or by fraud, artifice, or deception obtains
proprietary economic information;

2)

Wrongfully copies, duplicated, sketches, draws,
photographs, downloads, uploads, alters, destroys,
photocopies, replicated, transmits, delivers, sends, mails,
communicates, or conveys proprietary economic
information;

3)

Being entrusted with, or having lawful possession or control
of, or access to proprietary economic information,
wrongfully copies, duplicates, sketches, draws,
photographs, downloads, uploads, alters, destroys,
photocopies, replicates, transmits, delivers, sends, mails,
communicates, or conveys, the same;

4)

Receives, buys, or possesses proprietary economic
information, knowing the same to have been stolen or
wrongfully appropriated, obtained, or converted

5)

Attempts to commit any offense described in the preceding
subparagraphs 1-4; or

6)

Conspires with one or more other persons to commit any
offense described in preceding paragraphs 1-4 and one or
more of such persons do any act to effect the object of the
conspiracy, shall, except as provided in the next subsection
B, be fined not more than 50% of the economic value of


such proprietary information or imprisoned for a period
ranging from 16 or 25 tears, or both:

SECTION 4. Prohibited Acts; Penalties.—Any natural or juridical person
who commits economic espionage as defined in the preceding Section, whether
or not in the aid of foreign nations, governments, corporations, institutions or
instrumentalities, shall be fined an amount equivalent to the economic value of
such proprietary information

The person mentioned in the preceding paragraph is presumed to have
acted with intent to injure any owner and benefit any foreign nation, government,
corporation, institution or instrumentality, unless proven otherwise

If the offender is a corporation, any officer, director, or manager , or other
person occupying a position of authority and responsibility for the acquisition, use
‘or management of proprietary economic information for any corporation or other
business or commercial entity who knowingly permitted or failed to prevent the
commission of any acts which constitute economic espionage.

SECTION 5. Forfeiture.—Notwithstanding any provision of law to the
contrary, any person convicted of violation of this Act shall forfeit to the Philippine
Government any property constituting, or derived from any proceeds the person
obtained, directly or indirectly, from the commission of such violations; and ay of
the person's properly used, or intended to be used, in any manner or part, to
commit, or to facilitate the commission of a violation of this Act.

The court, in imposing penalty on the offender for a violation of this Act,
shall order that’ the property described in paragraph (A) of this Section be
forfeited in favor of the Philippine Government.

SECTION 6.Extra-Territoriality. Notwithstanding any provision of law to
the contrary, this Act applies to conduct occurring outside the territorial
jurisdiction of the Philippines if —

A) The offender is a Filipino citizen or permanent resident of the
Philippines;
B) The victim of the offense is an “owner”, as defined in Section 3

of this Act, and the offense was intended to have, or had, an
effect in the Philippines; or

c) The offender foreign corporation is conducting business in the
Philippine through agents or subsidiaries and has caused
damage to the “owner” in the conduct of its business abroad.

SECTION 7. Construction with Other Laws—This Act shall not be
construed to preempt or displace any other existing legal remedies, whether civil
or criminal, for the misappropriation or proprietary economic information

SECTION 8.Preservation of Confidentiality.-In any prosecution under this
Act, the court shall preserve the confidentiality of alleged proprietary economic
information by any reasonable and lawful means including, but not limited to —

a) The granting or protective orders in connection with discovery
proceedings; and


b) The holding of in-camera hearing, sealing relevant portions of
the record, and the ordering of any person involved in the
proceedings not to disclose the alleged proprietary economic
information which is the subject of the offense may request the
prosecution to seek such protective action.

SECTION 9.Non-Applicability of Lawfully Authorized Law Enforcement or
Intelligence Activities. -Any act in which information is seized, taken or
transported, transmitted, or transferred pursuant to or in furtherance of any
lawfully authorized investigative, protective, or intelligence activity of a law
enforcement agency of the Philippines or any of its political subdivision, shall not
be deemed a violation of this Act

SECTION 10.Separability Clause.-If any provision of this Act shall be
declared unconstitutional, any other provision not affected thereby shall remain in
full force and effect.

SECTION 11. Repealing Clause.-All laws, decrees, orders, rules
andregulations, or parts thereof inconsistent with this Act are herebyrepealed or
amended accordingly.

SECTION 12. Effectivity—This Act shall take effect fifteen (15) daysafter
its publication in at least two (2) newspapers of general circulation.

Approved,