Republic of the Philippines
HOUSE OF REPRESENTATIVES
Quezon City

EIGHTEENTH CONGRESS,
First Regular Session

House Bill No. __4525

Introduced by Representatives John Marvin “Yul Servo” C. Nieto,
Edward Vera Perez Maceda, Dale “Along” R. Malapitan, Eric M.
Martinez, and Rolando M. Valeriano

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


Jol

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 goods 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.

rvin/‘Yul Servo” C. Nieto

y l, { Mtdko— ic M. Martinez

Edward Vera Perez Maceda


Republic of the Philippines
HOUSE OF REPRESENTATIVES
Quezon City

EIGHTEENTH CONGRESS
First Regular Session

House Bill No. _ 4525

Introduced by Representatives John Marvin “Yul Servo” C. Nieto, Edward
Vera Perez Maceda, Dale “Along” R. Malapitan, Eric M. Martinez, and

Rolando M. Valeriano

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 2019”.

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.)
ii.)

iii.)
iv.)
v.)
vi.)

vii.)

cameras, videographic and photographic equipment including
lenses;

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

handphones, personal digital assistant handphones and
smartphones;

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

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

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

pawn tickets;


) watches;
ix.) cables and wires made of copper;
x.) Other electronic device.

(b) “ticense" means a license issued under Section 5 of this Act;

(c) “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;

(d)“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;

(e) “Secretary” refers to the Secretary of the Department of Trade and
Industry;

(f) “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;

(g) “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;

SEC. 4. Appointment of Licensing Officer and Assistant Licensing Officers. - The
Secretary of the Department of Trade and Industry (DTI) 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. Issuance, Renewal and Conditions of License. - An application for a
license shall be —

(a) made to the Licensing Officer in such form or manner as the Licensing
Officer may require; and,
(b) 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 DTI 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;

has improperly obtained his license contrary to the provisions of

this Act;

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

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 DTI 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 records 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 shall, 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) to be 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,
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,
(c) 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,