FIFTEENTH CONGRESS )
REPUBLIC OF THE PHILIPPINES —)
FIRST REGULAR SESSION )

HOUSE OF REPRESENTATIVES

Introduced by Representative Rufus B. Rodriguez and
Representative Maximo 8. Rodriguez, Jr.

House Bill No. 1073

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 govemments 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 seeks to prevent economic espionage.

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

RupUs B. RODRIGUEZ

MAXIMO B. RODRIGUEZ, JR.


FIFTEENTH CONGRESS )
REPUBLIC OF THE PHILIPPINES —)
FIRST REGULAR SESSION )

HOUSE OF REPRESENTATIVES

Introduced by Representative Rufus B. Rodriguez and
Representative Maximo B. Rodriguez, Jr.

1073

House Bill No.

AN ACT

DEFINING THE CRIME OF ECONOMIC ESPIONAGE AND PROVIDING
PENALTIES THEREFOR

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.

1)

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

“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 other 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, 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 coneur:

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

(0) the information is not available generally to, or accessible by,
the public; and

(0) the information is not a matter of “public concern”, 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. Economie 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 —

1) 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) oF (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 Section 3 of this
Act, and the offense was intended to have, or had an effect in the
Philippines.

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. - 1n 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 Clause. - 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.