Republic of the Philippines
HOUSE OF REPRESENTATIVES
Quezon City

SEVENTEENTH CONGRESS
Third Regular Session
137

HOUSE BILL NO.

Introduced by HON. GUS S. TAMBUNTING

EXPLANATORY NOTE

This bill, to be known as the “RICO LAW”, seeks to combat organized crime entities
that are being ran as legitimate businesses by combining certain individual crimes
committed by associates into a larger, more comprehensive endeavor, thus allowing
other members of the organization to be held criminally responsible for each crime
committed in furtherance of that business or enterprise.

It also aims to help law enforcement agencies and the Philippine Judiciary to go after
and hold accountable persons directly and indirectly involved in organized crime
syndicates and prosecute them to the fullest extent of the law.

The undersigned firmly believes that if this bill will be enacted, it will greatly help the
government go after the big heads and leaders of these nefarious organizations and
authorize the government to go after illegally acquired assets of people involved in
illegal activities and transactions.

Considering the importance of this measure, I earnestly urged for the early approval
of this bill.

US Al


Republic of the Philippines
HOUSE OF REPRESENTATIVES
Quezon City

SEVENTEENTH CONGRESS
Third Regular Session
8737
HOUSE BILLNO.___

Introduced by HON. GUS S. TAMBUNTING

AN ACT
CURTAILING THE ILLEGAL ACTIVITIES OF RACKETEERS AND POWERFUL
SYNDICATES IN THE PHILIPPINES

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

SECTION 1. Title of the Act—This Act shall also be known as the "Racketeer-
influenced and Corrupt Organizations (RICO) Act of 2018”.

SECTION. 2. Declaration of Policy — It is the policy of the State to promote
and maintain a sound economy anchored on legitimate businesses, enterprises and
transactions and fueled by honest capital derived from legitimate and lawful sources
and activities. It is likewise the policy of the State to curb organized and sophisticated
crimes and the laundering of the proceeds of these crimes into legitimate business
and activities by depriving the criminals the opportunity to enjoy the proceeds of their
wrong doings.

SECTION. 3. Liberal Construction. — The provisions of this Act shall be
liberally construed to effectuate the policy declared under this Act. However, the
constitutional rights of any person accused under this Act shall not be impaired.

SECTION. 4. Definitions. — For purposes of this Act, the words and phrases
used herein shall, unless the context indicated otherwise, mean and understood to
mean as follows:

a) “Person” is any individual, association, partnership, corporation, entity or any
group of individuals, associations, corporations or entities.

b)"Enterprise” is any legitimate business or establishment formed as
corporation, partnership, single proprietorship, formal or informal association, or as
group of individuals whether possessed of juridical personality or not.


c) “Racketeering activity” whether by an organized conspiracy or by an
individual, is any attempt or act involving all of the following crimes of kidnapping, for
the purpose of ransom; murder for money; arson; robbery; illegal possession of
firearms, and explosives for purposes of gunrunning, whether syndicated or not;
terrorism; bribery; other graft and corrupt practices; money laundering; syndicated
illegal gambling including loan sharking; organized syndicated carnapping; piracy;
hijacking; illegal logging; illegal mining; white slavery; illegal recruitment; smuggling;
illegal fishing; fencing, as a result of theft or robbery; importation, manufacture, sale,
administration, delivery, distribution and transportation of prohibited drugs and
maintenance of a drug den; large-scale swindling; syndicated film piracy; electronic
and computer software piracy and/or fraud; counterfeiting; violation of intellectual
property rights; monopolies and combination in restraint of trade; syndicated land
grabbing and falsification of land titles, whether private or public land; securities fraud,
bank frauds; human trafficking; and sexual exploitation of children as defined under
existing and similar general and special laws and other acts of similar nature where
the objective is to raise money or generate funds.

d) “Pattern” of racketeering activity requires at least two (2) predicate acts of
racketeering activity, one of which occurred after effectivity of this Act and the other
occurring either within ten (10) years before the one occurring after the effectivity of
this Act or within ten years after the one occurring after the effectivity of this Act.

e) “Racketeering investigator” is an attorney or investigator designated by the
Secretary of Justice or the Solicitor General to serve as racketeer document custodian
and charged with the duty of enforcing or carrying into effect this Act.

f)*‘Dummy” is a person secretly acting for another who is apparently
representing his own interests; tool of another.

g) “Sequestration” means taking into custody or placing under the State’s
control or possession any asset, fund, or other property, as well as relevant records,
papers and documents in order to prevent their concealment, destruction, impairment,
or dissipation pending the determination whether the said asset, fun or property is ill-
gotten or a result of any illegal activities punished under this Act.

SECTION. 5. Prohibited Activities. — It shall be unlawful for any person to:

a) Knowingly participate, either directly or indirectly with or in an enterprise
conducting a pattern of racketeering activity;

b) Received any money or property derived directly or indirectly, from a pattern
of racketeering activity, or act as dummy of any person in order to hide or
conceal money or property acquired through racketeering activities as
defined herein;

¢

Use or invest directly or indirectly, any part of the money or property
received or derived, directly or indirectly, from a pattern of racketeering
activity in any interest in or the establishment or operation of any business.


d) Acquire or maintain through a pattern of racketeering activity, directly or
indirectly any interest in or control of any business enterprise.

e) Conspire in the conduct of any unlawful acts provided herein.

SECTION. 6. Penalties. - Any person who commits any of the prohibited
activities under Section 5 of this Act shall, upon conviction, be penalized by
imprisonment of not less than ten (10) years nor more than twenty (20) years and if
found guilty of a racketeering activity for which the maximum penalty includes life
imprisonment or death and a fine of not less than One Hundred Thousand Pesos
(100,000.00) nor more than Two Million Pesos (2,000,000.00).

SECTION. 7. Forfeiture. — In addition to penalties provided in the preceding
Section, any person convicted of any prohibited activities provided under Section 5
hereof shall forfeit in favor of the Philippine Government:

1. any interest acquired or maintained through racketeering activity or a
pattern of racketeering activity;

2. any interest in, security of, claim against, or property or contractual right
of any kind affording a source of influence over any enterprises which
any person has established, operated, controlled, conducted, or
Participated in the conduct of such unlawful acts; and

3. any property constituting, or derived from any proceeds which the
person obtained directly or indirectly, from racketeering activities.

All rights, titles and interest in property described in the preceding paragraph
shall be vested in the Philippine Government upon the commission of the act giving
rise to forfeiture under this Section. The manner of disposition thereof shall be in
accordance with Section 14 of this Act.

SECTION. 8. Jurisdiction. - Any of the regional trial courts of the place
where any of the racketeering activities constituting the pattern of racketeering activity
has been committed including those with jurisdiction over heinous crimes, shall have
jurisdiction over cases filed under this Act and applications for forfeiture including
petitions for temporary restraining order or injunction under the next succeeding
section regardless of the location of any property subject to forfeiture or where the
person resides or where the enterprise is located.

SECTION. 9. Sequestration. — All known properties of the defendant shall
be subjected to sequestration upon the filing of criminal complaint against him.

SECTION. 10. Temporary Restraining Order. — A temporary restraining
order effective for sixty (60) days may be issued upon application by the Secretary of
the Department of Justice of the Solicitor General without notice or opportunity for a
hearing before, during or after the filing of the information directing the defendant of


any person acting on his behalf to desist from disposing and to preserve the availability
of the property for forfeiture, if the Philippine Government demonstrates that there is
probable cause to believe that the property would be subject to forfeiture and the
provision of notice will jeopardize the availability of the property of forfeiture.

SECTION. 11. Preliminary Injunction. — Within (60) days after issuance of
a temporary restraining order, the court shall conduct a hearing with notice to all
properties concerned. A writ of preliminary injunction shall be issued if the court
determines that:

a) There is substantial probability that the Philippine Government will prevail on
the issue of forfeiture and the failure to issue the writ result in the property
being destroyed, removed, disposed of or otherwise made available for
forfeiture; and

b) The need to preserve the availability of the property through the writ
outweighs the hardship on any party against whom it is directed.

SECTION. 12. Evidence Required. — In the hearing for the prosecution of
cases filed under this Act, the sole testimony of a participant or conspirator, if credible,
can be the basis for conviction of the other defendants: provided that, for purposes
of the hearing for the writ of preliminary injunction, the court shall not be bound by
the technical rules on evidence under the rules of court; Provided further, that the
evidence was taken without violating the constitutional rights of the accused.

SECTION. 13. Judgement of Forfeiture. — Upon conviction of a person
under this section, the court shall enter a judgement of forfeiture of the property in
favor of the Philippine government and shall authorize the Secretary of Justice or the
Solicitor General to seize all properties ordered forfeited: Provided, That the
judgement of forfeiture in the original case shall be without prejudice to the right of
the government to initiate further forfeiture proceedings on properties of the accused
which may later on be discovered as part of the proceeds of the commission of the
crime of racketeering.

SECTION. 14. Disposition of Forfeited Property. — Following the seizure
of the property, the Secretary of Justice of the Solicitor General shall direct the
disposition of the property by sale or any other commercially feasible means pursuant
to existing laws, rules and regulations on the sale of government properties. Any
property right or interest not exercisable by or transferable for value to the Philippine
government shall expire and shall not revert to the defendant, nor shall the defendant
or any person acting on his behalf be eligible to purchase forfeited property at any
sale held by the Philippine government.

SECTION. 15. Restitution of Property to Victims. — The court entering
the judgement of conviction and forfeiture, upon finality of the decision, shall hear
petitions by victims of racketeering activity for restitution of property or compensation.
The court may order portions of the proceeds of the sale of forfeited property
deposited with the National Treasury to be paid to the victims.


SECTION. 16. Rights of Third Parties. — No party claiming an interest in
property subject to forfeiture may:

a) Intervene in a trial or appeal of criminal case involving the forfeiture of such
property; or

b) Commence an action at law or equity nor may any court issue a restraining
order or injunction against the Philippine government concerning the validity
of his alleged interest in the property subject to forfeiture.

However, any person, other than the defendant asserting a legal interest on a
property ordered forfeited may, within thirty (30) days from publication by the
Secretary of Justice or Solicitor General of the judgement for forfeiture in two (2)
national papers of general circulation in the Philippines, petition the court for a hearing
‘to adjudicate the validity of his alleged interest in the property.

SECTION. 17. Substitution of Other Properties. — The court shall order
the substitution and/or forfeiture of any other property of the defendant equivalent to
value of any property described in Section 7, if any of the said properties:

a) Cannot be located upon the exercise of due diligence;

b) Has been transferred or sold to a third party who acquired the same in good
faith;

c) Has been placed beyond the jurisdiction of the courts;
d) Has been substantially diminished in value; or

e) Has been commingled with other property which cannot be divided without
difficulty.

SECTION. 18. Civil Remedies. — a) The Secretary of Justice or the Solicitor
General may initiate civil action in any of the regional trial courts of the place where
any element of any racketeering activity has been committed which shall have
jurisdiction to prevent or restrain unlawful acts provide under Section 5 hereof,
irrespective of where the person resides or is found or where the enterprise or property
is located by issuing appropriate orders, including but not limited to:

1. Ordering any person to divest himself of any interest, direct or indirect in
any enterprise;

2. Imposing reasonable restrictions on the future activities or investments of
any person including but not limited to, prohibiting any person from
engaging in the same type of endeavor as the enterprise engages in; or


3. Ordering the dissolution or reorganization of any enterprise, making
provision for the rights of innocent persons.

A final judgment rendered in favor of the Philippine government in any criminal
proceeding shall be an estoppel for the defendant from denying the essential
allegations of the criminal offense in any subsequent civil proceedings brought by the
Philippine government.

b) Any person injured in his person, business or property or his heirs, by reason
of prohibited activities under Section 5 hereof, may sue therefor in the appropriate
regional trial court as provided in the preceding paragraph and may be entitled to
recover threefold the damages he sustains and the cost of the suit, including a
reasonable attorneys fees against all persons found guilty under this Act.

SECTION 19. Expedited Action. - In any civil action instituted under the
preceding Section, the regional trial court shall expeditiously try and hear the case,
giving it preference to the same over all other civil cases.

SECTION. 20. Subpoena Duces Tecum. - a) Whenever the Secretary of
Justice of the Solicitor General has reason to believe that any person or enterprise
may be in possession or control of any documentary materials relevant to a
racketeering investigation, he may prior to the institution of a criminal or civil
proceedings, apply with the court for the issuance of a subpoena duces tecum thereon,
requiring such person to produce such materials for examination.

b) Any person who duly served with subpoena duces tecum shall make available
for inspection, copying or reproduction to the custodian designated therein at any
place agreed upon and shall certify under oath that the copies are true reproductions
of the original, which certified copies shall be admissible in court as originals.

C) While in the possession of the custodian, no materials so reproduced shall
be available for examination, without the consent of the person who produced such
material, by any individual other than the Secretary of Justice or Solicitor General.

SECTION 21. Statute of Limitations. — One of the predicate acts of
racketeering must have been committed within ten (10) years of the date of the
information, otherwise violations of this Act shall be deemed to have prescribe.

SECTION 22. Consolidation of Cases. — The trial for criminal liability for
each predicate act of racketeering activity shall be consolidated with the court hearing
the RICO case.

SECTION 23. Repealing Clause. — All laws, decrees, orders, rules and
regulations or parts thereof inconsistent with this Act are hereby amended, repealed
or modified accordingly.

SECTION 24. Separability Clause. — If, for any reasons, any part or
provision of this code shall be held unconstitutional or invalid, other parts or provisions
hereof which are not affected thereby shall continue to be in full force and effect.


SECTION 25. Effectivity. — This Act shall take effect fifteen (15) days after
its complete publication in at least two (2) national newspapers of general circulation.

Approved,