Republic of the Philippines
HOUSE OF REPRESENTATIVES
Quezon City, Metro Manila

FIFTEENTH CONGRESS
First Regular Session

9753

Introduced by Representative Rodolfo W. Antonino

EXPLANATORY NOTE

A successful terrorist group, like any other criminal organization, must be one that is
able to build and maintain an effective financial infrastructure. It must locate, develop and keep
sources of funding, means of laundering those funds, and finding ways to ensure that those
funds can be used to obtain material and other logistics needed to commit terrorist acts.

Experts on global terrorism generally agree that terrorist financing comes from either of
the following sources: from states or organizations with highly developed financial structure;
from individuals or groups with substantive financial means; or from income derived from crime
or other unlawful activities such as kidnapping for ransom, drug trafficking, smuggling, illegal
gambling, etc. The 11 March 2004 Madrid train bombings is an example of a terrorist act
financed by illegal activities, specifically, narcotics trafficking. However, experts failed to
include the income derived from lawful or legitimate sources, or a combination of both lawful
and unlawful sources. No anti-terrorism financing law would be effective if the remedies of
freezing and confiscation would only cover illegitimate funds or those of illicit origins.

In 2001, the Philippines signed and subsequently ratified the 1999 UN Convention on the
Suppression of the Financing of Terrorism or Terrorist Financing Convention, obligating itself
to criminalize the financing of terrorism and impose measures designed to prevent terrorists’
access to funds, however acquire, which may later on be forfeited. Following the adoption of
this Convention, the UN Security Council issued Resolution Nos. 1267 (1999) and 1373 (2001)
and successor Resolutions. °

This bill intends to complement and reinforce existing laws on anti-money laundering
and anti- terrorism. It defines terrorist financing as a crime separate and distinct from the crime
of terrorism and provides penalties to deter terrorist financiers them from providing logistics
and support to terrorists. It is also intends, as a measure on the part of the Philippines, to
comply with the Terrorist Financing Convention, UNSC Resolution Nos. 1267, 1373 and its
successor resolutions, as well as the Financial Action Task Force’s Special Recommendations
on terrorist financing.

Without discouraging or prohibiting financial institutions from doing business with
legitimate customers, this bill intends to deny terrorists and their supporters access to legitimate
international financial systems. It strengthens the country’s support to fight terrorism as it
continues to threaten global peace and security, and reaffirms UNSC Resolution 1373 which
“recognizes the need for States to complement international cooperation by taking additional
measures to prevent and suppress the financing and preparation of any acts of terrorism”.

The passage of this bill is earnestly sought. / /

IDOLFOW. ANTONINO.


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Republic of the Philippines
HOUSE OF REPRESENTATIVES
Quezon City

Fifteenth Congress
First Regular Session

House Bill No. $753

Introduced by: Representative Rodolfo W. Antonino

AN ACT DEFINING TERRORIST FINANCING AS A CRIME AND PROVIDING
PENALTIES THEREFOR

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 “Terrorist Financing
Suppression Act of 2010”.

SEC. 2. Declaration of Policy — 1t is the policy of the State to protect life, liberty,
and property from acts of terrorism, and to condemn terrorists and those who support and
finance terrorists as inimical and dangerous to the national security of the country and to
the welfare of the people. Toward this end, the State shall reinforce its fight against
terrorism by defining terrorist financing as a crime and providing penalties for the
commissions thereof.

SEC. 3. Definition of Terms. — As used in this Act:

a) Anti-Money Laundering Council (AMLC) refers to the agency created by

virtue of Republic Act No. 9160, as amended, otherwise known as the “Anti-Money

Laundering Act of 2001, as amended’
b) Anti-Terrorism Council (ATC) refers to the agency created by virtue of
Republic Act No. 9372, otherwise known as the Human Security Act of 2007:
co) Covered institution refers to or shall have the same meaning as defined

under the Anti-Money Laundering Act (AMLA), as amended;


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@) Forfeiture refers to an act where a court order transfers, after due process,
in favor of the goverment ownership of property or funds representing, involving or
relating to a terrorist act or terrorist financing;

©) Freeze refers to the act of blocking or restraining specific property or funds
from being transacted, converted, concealed, moved or disposed. The owner of said
frozen property or funds shall retain ownership thereof although the government
possesses, administers or manages the property or funds;

1) Property or funds refers to assets of every kind, whether real or personal,
tangible or intangible, movable or immovable, however acquired or regardless of its
source, including legal documents or instruments in any form, including electronic or
digital, evidencing title to, or interest in, such assets, including but not limited to cash,
bank credits, travelers cheques, bank cheques, money orders, shares, securities, bonds,

drafts, letters of credit and other monetary instruments;

(i) commits, or attempts, or

2) Terrorist refers to any natural person who:
conspires to commit terrorist acts by any means, directly or indirectly, unlawfully and
willfully; (ii) participates, as a principal or as an accomplice, in terrorist acts; (iii)
organizes or directs others to commit terrorist acts; or (iv) contributes to the commission
of terrorist acts by a group of persons acting with common purpose where the contribution
is made intentionally and with the aim of furthering the terrorist act or with the knowledge

of the intention of the group to commit a terrorist act;
h) Terrorist act refers to the following:

1: Any act or combination of acts punishable under any of the following provisions

of the Revised Penal Code (RPC) and other special laws;


i) Article 122 (RPC) on piracy in general and mutiny in the high seas or in the
Philippine waters:
ii) Article 134 (RPC) on rebellion or insurrection;

Article 134-a (RPC) on Coup de ‘état, including acts committed by private

persons;

iv) Article 248 (RPC) on murder;

v) Article 267 (RPC) on kidnapping and serious illegal detention;

vi) Article 324 (RPC) on crimes involving destruction;

vii) Presidential Decree No. 1613, the Law on Arson;

vili)Republic Act No. 6969, otherwise known as the “Yoxic Substances and
Hazardous and Nuclear Waste Control Act of 1990”;

ix) Republic Act No. 5207, otherwise known as the “Alomic Energy
Regulatory and Liability Act of 1968";

x) Republic Act No. 6235 entitled, “An Act Prohibiting Certain Acts Inimical
to Civil Aviation and for other purposes”;

xi) Presidential Decree No. 532, entitled, “Anti-Piracy and Anti-Highway
Robbery Law of 1974";

xii)Presidential Decree No. 1866, as amended by RA 8294 and further
amended by RA 9516 (Sections 3 & 4), entitled “Codifving the Laws on
Illegal and Unlawful Possession, Manufacture, Dealing in, Acquisition or

Disposition of Firearms, Ammunition or Explosives or Instruments Used in

the Manufacture of Firearms, Ammunition or Explosives, and Imposing


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Stiffer Penalties for Certain Violations Thereof and for Relevant
Purposes”;

which sows and creates a condition of widespread and extraordinary fear and panic

among the populace, in order to coerce the goverment to give in to an unlawful

demand;
2. Any other act intended to cause death or serious bodily injury to a civilian or to any
person not taking an active part in the hostilities ina situation of armed contfict, when the
purpose of such act, by nature of its context, is to intimidate a population, or to compel a
government of an international organization to do ot to abstain from doing any act.

Dv Terrorist entity or organization refers to any entity owned or controlled by
any terrorist of group of terrorists that: (i) commits, or attempts to commit, terrorist acts by
any means, directly or indirectly, unlawfully and willfully; (ji) participates es an
accomplice in terorist acts; (ii) organizes or directs others to commit terrorist acts; or (iv)
contributes to the commission of terrorist acts by # group of persons acting with common
purpose of furthering the terrorist act where the contribution is made intentionally and
‘with the aim of furthering the terrorist act or with the knowledge of the intention of the

group to commit a terrorist act.

SEC 4. Terrorist Financing. ~ Any person who, directly or indirectly, willfully
and without lawful excuse, provides, collects or uses property or funds or makes available
property or financial service or other related services, by any means, with the unlawful and
willful intention that they should be used or in the knowledge that they will be used, in full
or in part: (a) to carry out a terrorist act or acts; (b) by a terrorist entity or organization; or

(©) by an individual terrorist shall be guilty of the crime of terrorist financing and shall be


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imposed the penalty of reclusion temporal in its maximum period to reclusion perpetua
and a fine of not less than Five Hundred Thousand Pesos (PhP 500,000.00) nor more than
One Million Pesos (PhP 1,000,000.00).

Provided, however, That with respect to c), it shall be an affirmative defense that
the person providing the property or funds had no knowledge or reason to believe that the
property or funds will be used for activities related to terrorist acts.

For purposes of this Act, knowledge may be established by direct evidence or
inferred from the attendant circumstances.

SEC. 5. Conspiracy to Commit Terrorist Financing. — Persons who conspire to
commit the crime of terrorist financing shall suffer the penalty of reclusion tempural in its
maximum period to reclusion perpetua and a fine of not less than Five Hundred Thousand
Pesos (PhP 500,000.00) nor more than One Million Pesos (PhP 1,000,000.00).

‘There is conspiracy when two or more persons come to an agreement concerning
the commission of the crime of terrorist financing as herein defined and decide to commit
the same.

SEC. 6. Accomplice. ~ Any person who, not being a principal under Article 17 of
the Revised Penal Code or a conspirator as defined in Section 4 hereof, cooperates in the
execution of either the crime of terrorist or conspiracy to commit terrorism by previous or
simultaneous act, shall suffer the penalty one degree lower than that prescribed for the
conspirator.

SEC.7. Accessory. — Persons who, having knowledge of the commission of the
crime of terrorist financing but without having participated therein as a principal take part,
subsequent to its commission, by profiting themselves or assisting the principal or

principals to profit by the effects of the crime, or by concealing or destroying the effects of

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the crime in order to prevent its discovery, or by harboring, concealing or assisting in the
escape of the principal of the crime shall be guilty as an accessory to the crime of terrorist
financing and shall be imposed a penalty two degrees lower than that prescribed for
principals in the crime of terrorist financing.

SEC. 8. Prohibition Against Use or Possession of Property or Funds for
Terrorist Purposes. — Every person who (a) uses property or funds, directly or indirectly,
in whole or in part, for the purpose of facilitating or carrying out any terrorist act; or (b)
possesses property or funds intending that it be used or knowing or having reasonable
grounds to believe that it will be used, directly or indirectly, in whole or in part, for the
purpose of facilitating or carrying out a terrorist act shall be guilty as a principal of the
crime of terrorist financing.

SEC. 9, Prohibition Against Dealing with Property of Terrorists. — It shall be
unlawful for any person to (a) deal directly or indirectly, with any property or funds that
he knows or has reasonable ground to believe is owned or controlled by or on behalf of
any terrorist, terrorist entity or organization, including funds derived or generated from
property or funds. owned or controlled, directly or indirectly, by any terrorist, terrorist
entity or organization; (b) enter into or facilitate, directly or indirectly, any financial
transaction related to a dealing in property or funds owned or controlled by or on behalf of
any terrorist, terrorist entity or organization; or (c) provide any financial service or any
other related services with respect to any property or funds owned or controlled by, or on

behalf or for the benefit of, or on the direction or order of, any terrorist, terrorist entity or

Violation of this Section shall be penalized as a principal of the crime of terrorist

financing; Provided, That any person who acts reasonably in taking measures to comply


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with this Section shall not be liable in any criminal proceeding if the person took all
reasonable steps to satisfy himself that the relevant property was not owned or controlled
by or on behalf of any terrorist or terrorist entity or organization.

SEC. 10. Offense by a Juridical Person or Corporate Body. ~ Where the crime of
terrorist financing has been committed by a company, firm, society or other body of
juridical person, any person who, at the time of the commission of the offense, was a
director, manager, secretary or other similar officer or a partner of the company, firm,
society or other body of juridical person or was purporting to act in any such capacity,
shall be guilty of the crime of terrorist financing and shall be penalized accordingly unless
he proves that the acts constituting the offense was committed without his consent or
connivance and that he had exercised the due diligence required to prevent the commission
of the offense having regard to the nature of his functions.

In addition to any administrative fine or sanction that may be imposed, the court
may revoke or suspend the license of the juridical person found to have violated the
provisions of this Act.

SEC. 11. Jurisdiction of Terrorist Financing and Related Cases. - The Regional
Trial Court shall have original jurisdiction over all cases of terrorist financing.

Sec. 12. Authority to Investigate Terrorist Financing and Related Cases. ~ The
AMLC, either at its own initiative or at the request of the ATC, is hereby authorized to
investigate: i) any property or funds that are in any way related to terrorist financing or
terrorist act; if) property or funds of any person or persons in relation to whom there is
probable cause to believe that they are committing or attempting or conspiring to commit,
or participating in or facilitating the commission of a terrorist act or terrorist financing as

defined herein.


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It may also enlist the assistance of any branch, department, bureau, office, agency
or instrumentality of the government, including government-owned and- controlled
corporations in undertaking countermeasures to terrorist financing, which may include the
use of its personnel, facilities and resources for the more resolute prevention, detection and
investigation of terrorist financing offenses and prosecution of offenders.

For purposes of this Section and notwithstanding the provisions of Republic Act
No. 1405, as amended, Republic Act No. 6426, as amended; Republic Act No. 8791, and
other laws, the AMLC is hereby authorized to inquire into or examine deposits and
investments with any banking institution or non-bank financial institution and their
subsidiaries and affiliates without a court order.

SEC. 13. Authority to Freeze. — The AMLC, either at its own initiative or at the
request of the ATC, is hereby authorized to issue an order to freeze without delay: i) the
property or funds that are in any way related to terrorist financing or a terrorist act; or ii)
the property or funds of any person or persons in relation to whom there is probable cause
to believe that they are committing or attempting or conspiring to commit, or participating
in or facilitating the commission of terrorist financing or a terrorist act as defined herein.

The freeze order shall be effective for a period not exceeding thirty (30) days.
Upon a petition filed by the AMLC before the expiration of the period, the effectivity of
the freeze order may be extended up to a period not exceeding six (6) months upon order
of the Court of Appeals, provided that the thirty-day (30-day) period shall be tolled upon
filing of a petition to extend the effectivity of the freeze order.

Notwithstanding the provisions of the preceding Section, the AMLC, consistent

with its international obligations, is authorized to issue a freeze order to comply with the

binding convention, directive or resolution of the ited Nations, the United Nations


Security Council and other international organizations of which the Philippines is a
member. Said freeze order shall be effective until the basis for the issuance thereof shall
have been lifted. During the effectivity of the freeze, an aggrieved party may, within
twenty (20) days from issuance, file with the Court of Appeals a petition to determine the
basis of the freeze order.

However, if the property or funds subject of the freeze order are found to be in any
way related to terrorist financing or terrorist act committed within the jurisdiction of the
Philippines, said property or funds shall be the subject of civil forfeiture proceedings as
hereinafter provided.

SEC. 14. Duty of the Covered Institutions and Government Agency upon receipt
of the Freeze Order. ~ Upon receipt of notice of freeze order, the covered institution or
government agency shall immediately preserve the subject property or funds in accordance
with the Resolution of the AMLC and shall forthwith fumish a copy of the notice of the
freeze order upon the owner or holder of the subject property, or funds. Any person who
fails to comply with a freeze order shall be penalized with imprisonment ranging from six
(6) months to four (4) years and a fine of not less than One Hundred Thousand Pesos (PhP
100,000.00) nor more that Five Hundred Thousand Pesos (PhP 500,000.00) at the
discretion of the court, without prejudice to the administrative sanctions that the AMLC
may impose on the erring covered institution.

SEC. 15. Predicate Offense to Money Laundering.- Terrorism financing and other
violations under this Act shall be a predicate offense to money laundering as defined in the

Anti-Money Laundering Act of 2001 (AMLA), as amended.


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SEC. 16. Civil Forfeiture. ~ The procedure for the civil forfeiture of property or
funds found to be in any way related to terrorist financing and other violations of this Act
shall be made in accordance with the AMLA, as amended, its Revised Implementing
Rules and Regulations and the Rules of Procedure promulgated by the Supreme Court.

SEC. 17. Extra-Territorial Application of this Act. ~ Subject to the provision of an
existing treaty, including the 1999 International Convention for the Suppression of the
Financing of Terrorism, of which the Philippines is a State Party, and to any contrary
provision of any law of preferential application, the provisions of this Act shall apply: a)
to individual persons who commit any of the crimes defined and punished in this Act
within the terrestrial domain, interior waters, maritime zone, and airspace of the
Philippines; b) to individual persons who, although physically outside the territorial limits
of the Philippines, commit, conspire or plot to commit any of the crimes defined and
punished in this Act inside the territorial limits of the Philippines: c) to individual persons
who, although physically outside the territorial limits of the Philippines, commit any of the
said crimes on’board Philippine ship or Philippine airship; d) to individual persons who
commit any of said crimes within any embassy, consulate, or diplomatic premises
belonging to or occupied by the Philippine govemment in an official capacity; e) to
individual persons who, although physically outside the territorial limits of the Philippines,
commit said crimes against Philippine citizens or persons of Philippine descent, where
their citizenship or ethnicity was a factor in the commission of the crime; and f) 10
individual persons who, although physically outside the territorial limits of the Philippines,

commit said crimes directly against the Philippine government.


The provisions of this Act shall likewise apply to a Filipino national who, although
outside the territorial jurisdiction of the Philippines, commit, conspire or plot to commit
any of the crimes defined and punished is this Act.

SEC. 18. Extradition. — The Philippines shall negotiate the inclusion of terrorist
financing as herein defined among extraditable offenses in all future treaties.

SEC. 19. Applicability of the Revised Penal Code. ~ The provisions of Book I of
the Revised Penal Code shall be applicable to this Act.

SEC. 20. Separability Clause. ~ If, for any reason, any provision of this Act is
declared invalid or unconstitutional, the remaining provisions not affected thereby shall
continue to be in force and effect.

SEC. 21, Repealing Clause. ~ All laws, decrees, executive orders, proclamations,
rules and regulations, and other issuances, or parts thereof, which are inconsistent with the

provisions of this Act are hereby repealed or modified accordingly.

SEC. 22. Effectivity Clause. ~ This Act shall take effect fifteen (15) days after its.
publication in the Official Gazette or in at least two (2) newspapers of general circulation,

whichever is earlier.

Approved,