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Republic of the Philippines
HOUSE OF REPRESENTATIVES
Quezon City

SEVENTEENTH CONGRESS
First Regular Session

i 4465

House Bill No.

Introduced by HON. JOHN MARVIN “YUL SERVO” NIETO, HON. EDWARD VERA PEREZ
MACEDA, HON. DENNIS C, LAGAN, HON. XAVIER JESUS D. ROMUALDO, HON.
MANUEL F. ZUBIRI, and HON. GUS S. TAMBUNTING

EXPLANATORY NOTE

The trade of used items, popularly known as "secondhand goods", traces back its roots
from the era of barter trade when a considerably large volume of goods were being traded by
people at public bazaars and flea markets, in hopes of generating extra value. With the advent
of more efficient communication and banking technologies, trading, or as we may presently refer
to as the practice of “secondhand buy and sell”, has become more convenient for both the
sellers and buyers since these innovations have enabled our transactions «to transcend
geographical boundaries. Today, communication between two parties has become much easier
because of the advancement of mobile technologies (i.e, SMS and online markets); and
financial transactions have become more efficient through the development of mobile banking
and money transfer. Because of these, many of the buyers and sellers of secondhand goods
are able to transact with each other in the convenience of their own homes, without having to
actually meet up to verify the authenticity and quality of the items.

On this regard, a major caveat brought about by the aforementioned technologies for
purchasing secondhand items is the exposure to the risk of being taken advantage of by the
seller, especially when the monetary value of the secondhand item being sold to a consumer is
high. Some of the most traded secondhand items are electronics such as computers, cellular
phones, and cameras. Aside from these, more expensive luxury items such as jewelries and
designer bags are also common in the trade. Alarmingly, the increase in price and value of the
secondhand items being sold can go from several hundred thousands, even up to over a million
pesos (e.g. cars, etc.), thus, greater consumer protection and stricter seller regulations are not
only timely, but are also necessary.

Republic Act 7394, otherwise known as the “Consumer Act of the Philippines’, provides
standards, procedures and safeguards for the consumers in general. Unfortunately, the existing
laws and regulations do not cover the rapidly thriving industry of secondhand goods trade and
fails to adequately ensure the consumers that the quality and source of secondhand goods
being traded are of their expectations, thus exposing the buyers to the risk of spending their


hard-earned money on defective items, inauthentic goods, falsely-advertised products, and
others.

In line with the policies forwarded in RA 7394, this piece of legislation aims to improve
and further develop the secondhand goods trade in the country. Patterned after the successful
Secondhand Dealers laws of other Asian countries, it seeks to regulate the trade of secondhand
900d8 by requiring the secondhand goods dealers to secure license from the licensing officer
appointed by the Secretary of the Department of Trade and Industry. It also provides for the
record-keeping and reporting by the dealers to ensure the reliability of source and to prevent the
sale and circulation of lost or stolen items,

The form of regulation proposed by this measure intends to protect both the buyers and
the sellers or dealers. The fact that the goods being traded are secondhand does not mean that
this should be given lesser attention; the quality of goods bought by the consumers, regardless
of their price, should not be sacrificed.

In view of the foregoing considerations, immediate approval of this measure is sought.


SERVO” NIETO
9° DISTRICT OF MANILA

REPRESEN TA TNE. noe DISTRICT OF PARANAQUE


Republic of the Philippines
HOUSE OF REPRESENTATIVES
Quezon City

SEVENTEENTH CONGRESS
First Regular Session

House Bill No. 4 4 6 5

Introduced by HON. JOHN MARVIN “YUL SERVO" NIETO, HON. EDWARD VERA PEREZ
MACEDA, HON. DENNIS C. LAQGAN, HON. XAVIER JESUS D. ROMUALDO, HON.
MANUEL F. ZUBIRI, and HON. GUS S. TAMBUNTING

AN ACT
TO PROVIDE FOR THE LICENSING AND CONTROL OF DEALERS IN SECONDHAND
GOODS AND FOR MATTERS CONNECTED THEREWITH

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

SECTION 1. Short Title. — This Act shall be known as the “Secondhand Goods Dealers Act
of 2016"

SEC. 2. Declaration of State Policy. — It shall be the policy of the State to protect the rights and
welfare of the consumers and to ensure a healthy commercial environment, including the trade
‘of secondhand goods.

SEC. 3. Definition of Terms. - As used in this Act
(a) “goods” in the term “secondhand goods" means any of the following goods

i.) cameras, videographic and photographic equipment including lenses;

ji.) computers including desktop computers, tablet personal computers, laptops,
palmtops, personal digital assistants and computer accessories;

il.) handphones, personal digital assistant handphones and smartphones;

iv.) compact disc (CD), digital video/versatile disc (DVD) and blu-ray disc players;

v.) jewelry set with precious stones including, but not limited to, diamonds, jade,
rubies, sapphires and emeralds;

vi) jewelry made from platinum, gold and white gold without precious stones;

vii.) pawn tickets;

viii) watches;

ix) cables and wires made of copper:


(b)

(a)

(e)
f)

(9)

SEC. 4.

x) Other electronic device,
“license” means a license issued under Section 5 of this Act;

“licensing officer’ refers to the Licensing Officer and Assistant Licensing Officer from
the Department of Trade and Industry appointed under Section 3 of this Act;

"second hand goods dealer’ refers to any person who deals in secondhand goods,
including a person in the Philippines who deals in secondhand goods through the
Internet; further, every person in whose shop secondhand goods are found apparently
exposed for sale, or who is found in possession of secondhand goods of an unusual
quantity, shall be deemed, until the contrary is proven, to be a person who deals in
secondhand goods;

“Secretary’ refers to the Secretary of the Department of Trade and Industry,

“shop” includes a stall, house, flat, place of business, place of storage of secondhand
goods, an administrative office or any other premises from which the business of a
secondhand goods dealer is being carried out, whether electronically or otherwise;

“stolen property’ means property, the possession of which has been transferred by
theft, extortion or robbery, which has been criminally misappropriated or in respect of
which criminal breach of trust or cheating has been committed, whether the transfer has
been made or the misappropriation or breach of trust or cheating has been committed
within or out of the Philippines; but does not include such property which subsequently
comes into the possession of a person legally entitled to the possession thereof:

Appointment of Licensing Officer and Assistant Licensing Officers. - The Secretary of

the Department of Trade and Industry (DT!) shall appoint a Licensing Officer for the purposes of
this Act and may similarly appoint such number of Assistant Licensing Officers as may be
deemed necessary.

SEC. 5.

Dealing in Secondhand Goods. — No person shall deal in secondhand goods except

under and in accordance with the conditions of a license issued under Section 6 of this Act,

SEC. 6.
(a)
(b)

Issuance, Renewal and Conditions of License. - An application for a license shall be ~

made to the Licensing Officer in such form or manner as the Licensing Officer may

require; and,

accompanied by -

i.) such particulars, information and documents as the Licensing Officer may
require; and,

ii.) the licensing fee and any other charges that may be necessary.

Upon receipt of an application, the Licensing Officer may, in his discretion, issue a license to the
applicant subject to such conditions as the Licensing Officer may deem fit to impose.

The Licensing Officer may at any time add to, vary or revoke any condition of a license imposed
under the preceding paragraph


The Licensing Officer shall, before adding to, varying or revoking any condition of a license, give
the licensee ~

(a) notice in writing of his intention to do so; and,
(b) an opportunity to be heard, within such time as may be specified in the notice, as to why
the condition should not be added to, varied or revoked

Any person who is aggrieved by the decision of the Licensing Officer under this Section may,
within fourteen (14) days of being notified of the decision of the Licensing Officer, appeal in
writing to the Secretary of the DT! whose decision shall later on be final

A license may be renewed upon its expiry, with the necessary modifications, to an application
for the renewal of a license.

Any person who, in making an application for a license —

(a) makes any statement or furnishes any particulars, information or document which he
knows to be false or does not believe to be true; or,
(b) by the intentional suppression of any material fact, furnishes any information which is
misleading
shall be guilty of an offense.

SEC. 7. Form and Validity of License. — A license shall —

(a) be in such form as the Licensing Officer shall determine;
(b) contain the conditions subject to which it is issued; and,
(c)_ be valid for such period as may be specified therein.

SEC. 8. Transfer of License. — No person shall transfer his license to another person except
with the consent of the Licensing Officer and upon payment of the prescribed fee.

‘Any person who contravenes this provision shall be guilty of an offense.

SEC, 9, Revocation or Suspension of License. ~ The Licensing Officer may revoke a license or
suspend a license for such period as he deems fit —

(a) if he is satisfied that the license —

i) has ceased to carry on the business for which he has been licensed or, if the
licensee being a company, has gone into liquidation or is wound up or
otherwise dissolved;

ii) has improperly obtained his license contrary to the provisions of this Act;

ill) is no longer a fit and proper person to continue to hold a license;

iv) has been convicted of any offense involving dishonesty or, if the licensee is a
company, any of its officers holding a managerial or an executive position has
been convicted of any offense involving dishonesty;

v) _ is carrying on or has carried on the business of a secondhand goods dealer
in such a manner as to render him unfit to continue to hold a license;

vi) has failed to comply with any condition of his license;

vii) is contravening or has contravened any of the provision of this Act; or,


vill) has been convicted of any offense under this Act or, if the licensee is a
company, any of its officers holding a managerial or an executive position has
been convicted of any offense under this Act; or

(b) if he considers it necessary in the interest of the public.

The Licensing Officer shall, before revoking or suspending any license under this Section, give
the licensee notice in writing of his intention to do so, specifying a date, not less than fourteen
(14) days after the date of the notice, upon which the revocation or suspension shall take effect
and calling upon the licensee to show cause to the Licensing Officer why the license should not
be revoked or suspended,

When the Licensing Officer has revoked or suspended a license, he shall immediately inform
the licensee by notice in writing of the revocation or suspension.

‘Any person whose license has been revoked or suspended may, within fourteen (14) days of
the receipt of the notice or such extended period of time as the Secretary of the DT! may allow,
appeal in writing against the revocation or suspension to the Secretary whose decision shall be
final

‘Any revocation or suspension of a license shall not take effect until the expiration of a period of
fourteen (14) days after the Licensing Officer has informed the licensee of the revocation or
suspension in accordance with this Section, and if within that period, the licensee gives due
notice that an appeal has been made to the Secretary, the revocation or suspension order shall
not take effect unless the revocation or suspension order is confirmed by the Secretary or the
appeal is for any reason dismissed by the Secretary.

Where any license has been suspended, the Licensing Officer may, at any time and subject to
such conditions as he may deem fit to impose, lift the suspension if he considers it appropriate
to do so.

SEC. 10. Effect of Revocation or Suspension of License. - Where any revocation or
suspension of a license becomes effective, the licensee shall cease to carry on the business of
a secondhand goods dealer.

This Section shall not prejudice the enforcement by any person of any right or claim against the
licensee or by the licensee of any right or claim against any person arising out of or concerning
any matter or thing done prior to the revocation or suspension of the license.

SEC. 11. Keeping Proper Records. ~ Every secondhand goods dealer shall keep in his shop —

(a) records of the particulars of all goods bought by him, including the dates of purchase,
the names and addresses of the persons from whom he bought the goods and such
other particulars as may be prescribed; and,

(b) records of the particulars of all goods sold by him, including the dates of sale, the
names and addresses of the persons whom he sold the goods to and such other
particulars as may be prescribed


Every secondhand goods dealer shall submit to the Licensing Officer the records at such time
and in such format and through such medium (whether electronic or otherwise) as the Licensing
Officer may require.

Every secondhand goods dealer shall retain the records for a period of not less than five (5)
years from the end of the financial year in which the transactions or operations to which those
Fecords related are completed,

Every secondhand goods dealer shall produce the records for examination at any time on
demand by the Licensing officer, any court, a police officer or any concerned and competent
authority

‘Any person who ~

(a) contravenes the provisions of this Section; or,
(b) in compliance or purported compliance with the provisions of this Section fabricates,
keeps, submits or produces to the Licensing Officer, any court, a police officer or any
concerned and competent authority, any record which he knows is false or misleading,
shall be guilty of an offense.

SEC. 12. Information of Stolen and Lost Property to be Given to Secondhand Goods Dealers. —
Where a police officer has received any information as to any stolen property or as to any
property which has been lost, he may, if he deems it necessary or expedient to assist in the
recovery of the property, disseminate the information to all secondhand goods dealers, with lists
and descriptions of the stolen or lost property.

If any secondhand goods dealer possesses any property fitting such lists and descriptions
referred to in the preceding paragraph or such property is thereafter offered to or shown to any
secondhand goods dealer —

(a) he shail, without necessary delay, make a report to any police officer, with the
name and address of the person in whose possession the property was seen;
and,

(b) he may detain the person offering or showing him such property until the arrival
of a police officer.

SEC. 13. Power to Enter and Search Secondhand Goods Dealer's Shop, etc. - Any police
officer may enter the shop of any secondhand goods dealer at any time and may, without a
warrant, search the shop for any property which he has personal knowledge to suspect to be
therein which are stolen property or property that has been lost,

Any police officer may at any time enter and search without a warrant any shop where he has
reason to suspect that any person is dealing in secondhand goods without a license issued
under this Act

For the purposes of exercising his powers under this Section, a police officer may, with such
assistance as he considers necessary, break open any door, window, lock, fastener, floor, wall,
ceiling, compartment, box, container or any other object. Provided however, that the police
officer shall announce first that he would enter such premises by reason of suspected unlawful


transaction; only upon failure of the owner of the place to be searched can the police officer
break any opening as he may deem necessary.

Any police officer may seize any secondhand goods found in any shop referred to in this Act
The police officer who seized the said goods shall immediately turnover such to the proper
competent authority.

SEC. 14. Power to Arrest Persons Loitering Suspiciously About Secondhand Goods Dealer's
Shop. ~ Any police officer, having reason to believe that a person in or loitering about the shop
of any secondhand goods dealer under suspicious circumstances has with him any stolen
property, may arrest that person and require him to produce any property which he has with
him,

SEC. 15. Delivery to Owner of Property. - If any person is convicted in any court of an offense
under the Title Ten, “Crimes Against Property” of the Revised Penal Code in respect of any
property, and it appears to the court that the property has been sold to a secondhand goods
dealer, the court may, on proof of the ownership of the property and if it thinks fit, order the
delivery thereof to the owner either on payment to the secondhand goods dealer of the amount
of the purchase price or any part thereof, or without payment thereof or of any part thereof, as to
the court according to the conduct of the owner and the other circumstances of the case seems
just and fitting

The court may also adjourn the proceedings for the attendance of the secondhand goods dealer
and may summon the secondhand goods dealer to attend at the adjourned hearing

If after hearing the secondhand goods dealer the court is satisfied that the secondhand goods
dealer, before purchasing the property —

(a) ought reasonably to have known or suspected that the property was stolen property;
and,

(b) did not exercise due care and diligence to ascertain that the property was not stolen
property,

the court may order the secondhand goods dealer to pay a financial penalty not exceeding One
Hundred Thousand Pesos (P100, 000.00)

SEC. 16. Offenses by Bodies Corporate, etc. ~
(1) Where an offense under this Act committed by a body corporate is proven —

(a) to have been committed with the consent or connivance of an officer; or,
(b) to be attributable to any neglect on his part,

the officer as well as the body corporate shall be guilty of the offense and shall be liable
to be proceeded against and penalized accordingly,

(2) Where the affairs of a body corporate are managed by its members, subsection (1) shall
apply in relation to the acts and defaults of a member in connection with his functions of
management as if he were a director of the body corporate.

(3) Where an offense under this Act committed by a partnership is proven —


(a) to have been committed with the consent or connivance of a partner; or,
(b) to be attributable to any neglect on his part,

the partner as well as the partnership shall be guilty of the offense and shall be liable to
be proceeded against and punished accordingly

(4) Where an offense under this Act is committed by an unincorporated association (other
than a partnership) is proven —

(a) to have been committed with the consent or connivance of an officer of the
unincorporated association or a member of its governing body; or,
(b) tobe attributable to any neglect on the part of such an officer or member,

the officer or member as well as the unincorporated association shall be guilty of the
offense and shall be liable to be proceeded against and punished accordingly.

(5) In this Section —
(a) “body corporate” includes a limited liability partnership;

(b) “officer’ ~

i) in relation to a body corporate, means any director, partner, member
of the committee of management, chief executive, manager, secretary
or other similar officer of the body corporate and includes any person
purporting to act in any such capacity; or,

ii) in relation to an unincorporated association (other than a partnership),
means the president, the secretary, or any member of the committee
of the unincorporated association, or any person holding a position
analogous to that of president, secretary or member of a committee
and includes any person purporting to act in any such capacity;

(c) ‘partner’ includes a person purporting to act as a partner

SEC. 17. Liability for Offenses. - Where an offense under this Act is committed by any person
acting as an agent or employee of another person, or being otherwise subject to the supervision
or instruction of another person for the purposes of any employment in the course of which the
offense was committed, that other person shall, without prejudice to the liability of the first-
mentioned person, be liable under this Act in the same manner and to the same extent as if he
had personally committed the offense if it is proven that the act which constituted the offense
was committed with his consent or connivance or that it was attributable to any neglect on his
part

Where any person, being an agent or employee employed by a secondhand goods dealer in the
course of his business as such secondhand goods dealer, willfully does any act or commits any
omission that constitutes an offense under this Act, that person shall also be guilty of the
offense and shall be liable to the fine or punishment prescribed for that offense, as if he were
the person carrying on such business as a secondhand goods dealer


SEC. 18. Penalties. ~ Any person who is guilty of an offense under this Act shall be liable on
conviction to a fine not exceeding One Hundred Thousand Pesos (P100, 000.00) or to
imprisonment not exceeding one (1) year, or both at the discretion of the court.

SEC. 19. Composition of Offenses. - The Licensing Officer may, in his discretion compound
any offense under this Act which is prescribed as a compoundable offense by collecting from a
person reasonably suspected of having committed the offense a sum not exceeding One
Hundred Thousand Pesos (P100, 000.00).

On payment of such sum of money, no further proceedings shall be taken against that person in
respect of the offense.

The Secretary may make rules to prescribe the offenses which may be compounded.

SEC. 20. Exemption, - The Secretary may, with or without conditions, exempt any person or
class of persons from any or all of the provisions of this Act

If any exemption is granted under this Section with conditions, the exemption operates only if
the conditions are complied with,

SEC. 21. Implementing Rules and Regulations. - The Secretary of the Department of Trade
and Industry, together with the other concerned agencies and private organizations, shall
promulgate the implementing rules and regulations of this Act within ninety (90) days from the
approval of this Act

Such rules may include the following
(a) prescribed fees and charges payable for the purposes of this Act;
(b) prescribed forms to be used for the purposes of this Act; and,
(©) prescribed records to be kept by secondhand goods dealers and the particulars to be
entered therein.

SEC. 22. Repealing Clause. - All laws, acts, presidential decrees, executive orders,
administrative orders, rules and regulations inconsistent with or contrary to the provisions of this
Act are deemed amended, modified or repealed accordingly.

SEC. 23. Separability Clause. ~ If any part or provision of this Act is declared invalid or
unconstitutional, the other parts thereof not affected thereby shall remain valid.

SEC. 24, Effectivity Clause. - This Act shall take effect fifteen (15) days upon completion of its
publication in at least two (2) national newspapers of general circulation

Approved,