REPUBLIC OF THE PHILIPPINES
HOUSE OF REPRESENTATIVES
Quezon City

SEVENTEENTH CONGRESS
‘Third Regular Session
House Bit Noe 029

Introduced by MAGDALO Party-List Representative
HON. GARY C. ALEJANO

EXPLANATORY NOTE

Under this proposed measure, which shall be known as the RICO Act, Government shall
provide for extended criminal penalties and a civil cause of action for acts performed as part of
‘ongoing criminal organization. This Act shall primarily focus on racketeering and shall make it
possible for leaders of syndicates to be tried for the crimes which they ordered others to do or
assisted them in doing.

This piece of legislation is crucial given the enduring prevalence of organized crime
syndicates in the country, who misdeeds have caused much destruction and grief. This law shall aid
‘our law enforcement agencies and most importantly, the Judiciary who has been witness to a great
number of arrests and charges against alleged kidnap-for-ransom groups, as well as gambling and
drug syndicates, only to end up being acquitted for lack of corroborating evidences.

Furthermore, the passage of this bill shall be the high point of the countless Congressional
investigations on organized crime and other such illegal activities, since it will warrant the
government to sequester assets acquired illegally from people involved in such dealings.

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

. GARY C. ALEJANO-


REPUBLIC OF THE PHILIPPINES
HOUSE OF REPRESENTATIVES
‘Quezon City

Introduced by MAGDALO Party-List Representative
HON. GARY C. ALEJANO

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. Short Title —This Act shall be known as the Racketeer-Influenced and
Corrupt Organizations (RICO) Act.

SEC. 2. Declaration of Policy.—It is hereby declared the policy of the State to promote and
maintain a sound economy anchored on legitimate business 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 crime, 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 wrongdoings.

SEC. 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.

SEC. 4. Definitions —For the purposes of this Act:

a) Person is an 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 a group of individuals
whether possessed of juridical personality or not.

©) 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; bribery; other graft and corrupt practices; syndicated illegal
gambling; organized syndicated carnapping; piracy; hijacking; illegal logging; illegal mining;
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; 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.

4) Pattern of racketeering activity requires at least two (2) predicate acts of racketeering
activity, one of which occurred after the 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.

¢) Racketeering Investigator is an attorney or investigator so 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 the provisions of this Act.

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

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

SEC. 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 pattem 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 control of
any business enterprise.

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

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


SEC. 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, the penalty shall be life imprisonment, and a fine of
not less than One Hundred Thousand Pesos (P100,000.00) nor more than One Million Pesos
(1,000,000.00).

SEC. 7. Forfeiture.—In addition to penalties provided in Sec. 6 of this Act, any person
convicted of any prohibited activities provided under Section 5 hereof shall forfeit in favor of the
Philippine Government:

a) any interest acquired or maintained through racketeering activity or a pattem of
aie?

b) 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

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

Al 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.

SEC. 8. Jurisdiction.—Any of the regional trial courts of the place where any of the
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.

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

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

SEC. 11. Preliminary Injunction.—Within sixty (60) days after the 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 a substantial probability that the Philippine government will prevail on the issue
of forfeiture and that failure to issue the writ will 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.

‘SEC. 12. Required Evidence.—Iin 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 the
court; provided further, that the evidence was taken without violating the constitutional rights of the
accused.

SEC. 13. Judgment of Forfeiture.—Upon conviction of person under this section, the court
shall enter a judgment 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 judgment 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 or the proceeds of the commission of the crime of racketeering.

SEC. 14. Disposition of Forfeited Property.—Following the seizure of the property, the
Secretary of Justice or 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.

SEC. 15. Restitution of Property to Victims.—The court entering the judgment 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
victims.

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

a. Intervene in a trial or appeal of a criminal case involving forfeiture of such

b. Commence an action at law or equity nor may any court issue a restraining order
junction 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 property ordered
forfeited may, within thirty (30) days from publication by the Secretary of Justice or Solicitor
General of the judgment 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.

SEC. 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

¢. Has been commingled with other property, which cannot be divided without
difficulty.

‘SEC. 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 provided 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 engaged in; or

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

AA 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 attomeys fees against all persons found
guilty under this Act.

SEC. 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.

SEC. 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 has 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.

€. While in the possession of the custodian, no material so reproduced shall be
ble for examination, without the consent of the person who produced such material, by
jidual other than the Secretary of Justice or Solicitor General.

any

‘SEC. 21. Statue 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.

SEC. 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.

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

SEC. 24. Separability Clause.—If for any reason, any part or provision of this Act 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.

SEC. 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,