EIGHTEENTH CONGRESS )
REPUBLIC OF THE PHILIPPINES )
First Regular Session )

HOUSE OF REPRESENTATIVES

____ Introduced by Representative Rufus B. Rodriguez
House Bill No. _1866
EXPLANATORY NOTE

The development of proprietary economic information is an integral part of a nation’s
commerce. Its development, protection and lawful exchange are essential to the
competitiveness of critical segments of Philippine business and industry.

The theft, misappropriation and wrongful use of Philippine proprietary economic
information by foreign governments and their agents or instrumentalities can cost our
economy millions and possibly billions, of pesos each year.

Existing laws do not give adequate protection to proprietary economic information. It
also seeks to advance the development and lawful use of Philippine proprietary economic
information by protecting such information from the theft, wrongful destruction or alteration,
misappropriation and conversion by foreign governments and their agents or
instrumentalities. This bill seoks to prevent economic espionage.

Hence, the immediate approval of this bill is earnestly sought.

My

RUFUS B. RODRIGUEZ


EIGHTEENTH CONGRESS )
REPUBLIC OF THE PHILIPPINES )
First Regular Session )

HOUSE OF REPRESENTATIVES

__ Introduced by Representative Rufu:
Bill No. 1866
AN ACT

DEFINING THE CRIME OF ECONOMIC ESPIONAGE AND PROVIDING PENALTIES
THEREFOR

Hou!

Be it enacted by the Senate and House of Representatives of the Philippines in Congress
assembled.

SECTION 1. Short Title. - This Act may be cited as the “Economic Espionage and
Protection of Proprietary Information Act”.

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

1) “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;

2) “Foreign Agent” means any officer, employee, proxy, servant, delegate or
representative of a foreign nation or goverment;

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

4) “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, prototypes,
processes, procedures, programs, codes or commercial strategies, whether tangible
or intangible and whether stored, compiled or memorialized physically, electronically,
graphically, photographically or in writing provided that the following concur:

(a) the owner thereof has taken reasonable measures to keep such
information confidential;

(b) the information is not available generally to, or accessible by, the public:
and

(c) the information is not a matter of "public concer’, as defined by law.

5) “Owner” means any Filipino person or any Philippine Government department,

agency or instrumentality in which, rightful legal, beneficial or equitable title to or license

in, proprietary economic information is reposed;

6) ‘Filipino person” means -

(a) in the case of a natural person, a Philippine citizen or permanent
resident alien; and
(b) in the case of an artificial person, a juridical entity substantially

‘owned or controlled by the Philippine Government or by Filipino


citizens or permanent resident aliens, or incorporated under
Philippine laws.

SEC 4. Economic Espionage. - Engaging in economic espionage to aid foreign nations,
governments, corporations, institutions or instrumentalities.

(a) Any person who, with intent to, or reason to believe it will injure or disadvantage
any owner and benefit or advantage any foreign nation, government, corporation, institution
or instrumentality who —

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

2) wrongfully copies, duplicates, sketches, draws, photographs, downloads, uploads,
alters, destroys, photocopies, replicates, 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 paragraphs (1). (2), (3) or
(4);

6) wrongfully solicits another to commit any offense described in paragraphs (1), (2), (3)
or (4); or

7) conspires with one or more other persons to commit any offense described in
paragraphs (1), (2), (3) or (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 by not less than Five Hundred Thousand Pesos (P500,000.00), or imprisoned
for a period ranging from fifteen (15) to twenty-five (25) years, or both

(b) Any corporation that commits any offense described in the preceding subsection (a) shall
be fined by not less than One Million Pesos (P100,000,000.00).

SEC 5. Vicarious Liability. . - Any officer, director, 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 -

(1) knows or has reason to know that agents or employees of the
corporation or entity have wrongfully acquired or manipulated
proprietary economic information in violation of Section 4 of this Act;
and

(2) directly or indirectly authorizes, permits or suffers the information
wrongfully acquired or manipulated to be used to injure or
disadvantage any owner and benefit or advantage any foreign nation,
government, corporation, institution or instrumentality shall be fined
by not less than Five Hundred Thousand Pesos (P500,000.00) or
imprisonment for a period ranging from ten (10) to fifteen (15) years,
or both,


SEC 6. Forfeiture. -
(a) Notwithstanding any provision of law to the contrary, any person convicted of a violation
of this Act shall forfeit to the Philippine Government —

(1) any property constituting or derived from or any proceeds the person obtained,
directly or indirectly from the commission of such violation; and

(2) any of the person's properties used, or intended to be used, in any manner or
part, to commit or to facilitate the commission of a violation of this Act.

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

SEC 7. Extraterritoriality. -
(a) Notwithstanding any provision of law to the contrary, this Act applies to conduct occurring
outside the territorial jurisdiction of the Philippines if -
(1) the offender is a Filipino citizen; or
(2) the victim of the offense is an “owner” as defined in Sec!
offense was intended to have, or had an effect in the Philips

Nn. of this Act, and the

SEC 8. 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

of proprietary economic information.

SEC 9. Preservation of Confidentiality. - In any prosecution under this Act, the court shall
preserve the confidentiality of alleged proprietary economic information by any reasonable
‘means including, but not limited to -

(1) the granting of protection orders in connection with discovery
proceedings; and
(2) the holding of in-camera hearings, sealing relevant portions of the record

and the ordering of any person involved in the proceedings not to
disclose the alleged proprietary economic information without prior court
approval. Any owner of the proprietary economic information which is the
subject of the offense may request the prosecution to seek such
protective action.

SEC 10. Non-applicability to lawfully authorized law enforcement or intelligence
activities. - Any act in which information is seized, taken, 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 of any of its political
subdivisions, shall not be deemed a violation of Sections 4 and 5 of this Act.

SEC 11. Separability Clause - If any provision or part hereof, is held invalid or
unconstitutional, the remainder of the law or the provision not otherwise affected shall
remain valid and subsisting.

SEC 12. Repealing Cla Any law, presidential decree or issuance, executive order,
letter of instruction, administrative order, rule or regulation contrary to, or inconsistent with,
the provisions of this Act is hereby repealed, modified or amended accordingly.

SEC 13. Effectivity Clause. - This Act shall take effect fifteen (15) days after its publication
in at least two (2) newspapers of general circulation.

Approved,