Republic of the Philippines
HOUSE OF REPRESENTATIVES
Quezon City

SIXTEENTH CONGRESS
First Regular Session

1377

House Bill No.

Introduced by Representatives
DIOSDADO MACAPAGAL ARROYO and GLORIA MACAPAGAL ARROYO

AN ACT
DEFINING THE CRIME OF ECONOMIC ESPIONAGE AND PROVIDING PENALTIES
THEREFOR

EXPLANATORY NOTE

An integral part of a country’s commerce is the development of proprietary
economic information. The development, protection and lawful exchange of such
information is essential to the competitiveness of critical segments of Philippine
business and industry

It is therefore important to safeguard such from theft, misappropriation and
wrongful use especially from foreign governments and their agents or instrumentalities
since it can cost our economy millions of pesos each year.

At present, our laws do not give adequate protection to proprietary economic
information. It is the intent of this proposed measure to prevent economic espionage by
advancing the development and lawful use of Philippine proprietary economic
information by protecting it from theft, wrongful destruction or alteration,
misappropriation and conversion by foreign governments and their agents or
instrumentalities.

Due to the urgency of this bill, its expeditious passage into law is eamestly
requested

DIOSDADO MACAPAGAL ARROYO GLORI APAGAL ARROYO
Second District, Camarines Sur Seg§nd District, Pampanga


Republic of the Philippines
HOUSE OF REPRESENTATIVES
Quezon City

SIXTEENTH CONGRESS
First Regular Session

House Bill No. 1377

Introduced by Representatives
DIOSDADO MACAPAGAL ARROYO and GLORIA MACAPAGAL ARROYO

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 shall be called the “Economic
Espionage and Protection of Proprietary Information Act of 2013.”

SECTION 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.

SECTION 3. Definition of Terms. — As used in this Act, the term:

(A) “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,

(B) “Foreign agent’ means any officer, employee, proxy, servant,
delegate, or representative of a foreign nation or government;


(C) “Person” means a natural person, corporation, agency, association,
institution, or any other legal, commercial, or business entity:

(D) “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, prototype, 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
concur:

(1) The owner thereof has taken reasonable measure to keep such
information confidential;

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

(3) The information is not a matter of public concern:

(E) “Owner” means my Filipino person or any Philippine Government
compound, department, or agency in which, rightful legal, beneficial, or
equitable title to, or license in, proprietary economic information is
reposes;

(F) “Filipino person” means -

(1) In the case of a natural person, a Philippine citizen or a
permanent resident alien; and

(2) In the case of artificial person, a Philippine Government or by
Filipino citizens or permanent resident aliens, or incorporated under
Philippine laws.

(G) "Economic Espionage” is committed by any person 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
subparagraphs (1), (2), (3) or (4);

(6) Wrongfully solicits another to commit any offense described in
preceding subparagraphs (1), (2), (3) or (4); or

(7) Conspires with one or more other persons to commit any
offense described in preceding 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 not more than 50% of the economic value of such proprietary

information or imprisoned for a period ranging from 15 or 25 years,
or both.

SECTION 4. Prohibited Acts; Penalties. — Any natural or juridical person
who commits economic espionage as defined in the preceding Section, whether
or not in the aid of foreign nations, governments, corporations, institutions, or
instrumentalities, shall be fined an amount equivalent to the economic value of
such proprietary information.

The person mentioned in the preceding paragraph is presumed to have
acted with intent to injure any owner and benefit any foreign nation, government,
corporation, institution or instrumentality, unless proven otherwise

If the offender is a corporation, any officer, director, or 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 knowingly permitted or failed to prevent the
commission of any of the acts which constitute economic espionage.

SECTION 5. Forfeiture. — Notwithstanding any provision of law to the
contrary, any person convicted of violation of this Act shalll forfeit to the Philippine
Government any property constituting, or derived from any proceeds the person
obtained, directly or indirectly, from the commission of such violations; and any of
the person's properly used, or intended to be used, in any manner or part, to
commit, or to facilitate the commission of a violation of this Act.


The court, in imposing penalty on the offender for a violation of this Act,
shall order that the property described in paragraph (A) of this Section be
forfeited in favor of the Philippine Government.

SECTION 6. Extra-Ternitoriality. — Notwithstanding any provision of law to
the contrary, this Act applies to conduct occurring outside the territorial
jurisdiction of the Philippines if -

(A) The offender is a Filipino citizen or permanent resident of the
Philippines;

(B) 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; or

(C) The offender foreign corporation is conducting business in the
Philippines through agents or subsidiaries and has caused damage to the
*owner’ in the conduct of its business abroad

SECTION 7. 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 or proprietary economic information

SECTION 8. Preservation of Confidentiality. - In any prosecution under
this Act, the court shall preserve the confidentiality of alleged proprietary
economic information by any reasonable and lawful means including, but not
limited to -

(A) The granting or protective orders in connection with discovery
proceedings; and

(B) The holding of in-camera hearing, sealing relevant portions OC the
record, and the ordering of any person involved in the proceedings not to
disclose the alleged proprietary economic information which is the subject
of the offense may request the prosecution to seek such protective action

SECTION 9. Non-Applicability of 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 any of its political subdivisions, shall
not be deemed a violation of this Act.


SECTION 10. 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

SECTION 11. Repealing Clause. — Presidential Decree No. 1602 is
hereby amended and 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

SECTION 12. Effectivity Clause. — This Act shall take effect fifteen (15)
days after its publication in at least two (2) newspapers of general circulation.

Approved,