AN ACT PREVENTING THE PROLIFERATION OF WEAPONS OF MASS DESTRUCTION BY MANAGING THE TRADE IN STRATEGIC GOODS, THE PROVISION OF RELATED SERVICES, AND FOR OTHER PURPOSES

Sixteenth Congress
Third Regular Session

Begun and held in Metro Manila, on Monday, the twenty-seventh day of July, two thousand fifteen.

REPUBLIC ACT No. 10697

AN ACT PREVENTING THE PROLIFERATION OF WEAPONS OF MASS DESTRUCTION BY MANAGING THE TRADE IN STRATEGIC GOODS, THE PROVISION OF RELATED SERVICES, AND FOR OTHER PURPOSES

Be it enacted by the Senate and House of Representatives of the Philippine Congress Assembled:

CHAPTER I
GENERAL PROVISIONS

SECTION 1. Title. – This Act shall be known as the “Strategic Trade Management Act (STMA)”.

SECTION 2. Declaration of Policy. – It is declared a policy of the State to be free from Weapons of Mass Destruction (WMD) in its territory, consistent with the national interest, to fulfill its international commitments and obligations, including United Nations Security Council Resolution (UNSCR) 1540, to take and enforce effective measures to establish domestic controls to prevent the proliferation of WMDs and their means of delivery; and to maintain international peace and security, and promote economic growth by facilitating trade and investment through the responsible management of strategic goods and the provision of related services.

Towards this end and consistent with its foreign policy and national security interests, and in support of efforts to counter terrorism, control crime, and safeguard public safety, the State shall manage the trade of strategic goods and provision of related services in accordance with international standards and best practices.

SECTION 3. Scope and Coverage. – This Act shall apply to:

SECTION 4. The National Strategic Goods List. – There shall be a National Strategic Goods List (NSGL) to describe with specificity the strategic goods subject to authorization. The NSGL shall be in conformity with international commitments and nonproliferation obligations pursuant to bilateral and multilateral treaties, international conventions and international non-proliferation regimes.

Upon its establishment, the NSGL shall be published in the Official Gazette and in at least two (2) newspapers of general circulation. The NSGL shall be reviewed and updated on a regular basis.

Updates and revisions to the NSGL shall also be published in the Official Gazette and in at least two (2) newspapers of general circulation.

The NSGL shall comprise three (3) annexes: Military Goods (Annex 1), Dual Use Goods (Annex 2), and Nationally Controlled Goods (Annex 3).

SECTION 5. Definition of Terms. – As used in this Act:

CHAPTER II
IMPLEMENTING STRUCTURE AND MECHANISM

SECTION 6. Central Authority. – A permanent committee under the National Security Council (NSC), to be known as the NSC-Strategic Trade Management Committee (NSC-STMCom), is hereby constituted and deemed the central authority on any and all matters relating to strategic trade management with the following composition: (1) the Executive Secretary, as Chairperson; (1) the Executive Secretary, as Chairperson; (2) the Secretary of Trade and Industry, as Vice Chairperson; and (3) the Secretary of Foreign Affairs; (4) the Secretary of Justice; (5) the Secretary of National Defense; (6) the Secretary of the Interior and Local Government; (7) the Secretary of Finance; (8) the Secretary of Transportation and Communications; (9) the National Security Advisor; (10) the Secretary of Environment and Natural Resources; (11) the Secretary of Science and Technology; (12) the Secretary of Agriculture; and (13) the Secretary of Health; as Members. The Anti-Terrorism Council (ATC) – Program Management Center (PMC) shall serve as the Secretariat.

The members may designate a representative to the NSC-STM Com, who shall have a rank not lower than an Undersecretary. Five (5) members of the NSC-STMCom shall constitute a quorum for the transaction of business.

For purposes of this Act, the NSC-STMCom shall be complemented by the following support agencies and bureaus:

SECTION 7. Powers and Functions of the NSC-STMCom. – As the central authority focused on the country’s international commitment towards the promotion of a secured and safe environment for trade in strategic goods consistent with the objectives of this Act, the NSC-STMCom shall have the following powers and functions:

SECTION 8. Executive and Technical Arm. – The STMO is hereby created as a bureau under the administrative supervision of the Department of Trade and Industry (DTI) to serve as the executive and technical agency of the national government for the establishment of the management systems for the trade in strategic goods pursuant to this Act. The STMO shall be headed by a Director who shall be responsible for the pursuit of the office mandate, the discharge of its duties and functions and the exercise of supervision and control over the STMO and its constituent units. The STMO, through the Secretary of Trade and Industry, shall submit periodic updates to the NSC-STMCom.

The organizational structure and staffing pattern of the STMO shall be formulated by the DTI Secretary in coordination with the NSC-STMCom, subject to the approval by the Department of Budget and Management (DBM) in accordance with Executive Order No. 292 (Administrative Code of 1987).

SECTION 9. Powers and Functions of the STMO. – The STMO shall have the following powers and functions:

CHAPTER III
RESPONSIBILITIES OF PERSONS IN STRATEGIC TRADE TRANSACTIONS

SECTION 10. Responsibilities of Persons. – It shall be the responsibility of any person, subject to this Act; who intends to engage in the export, import, transit, and transshipment of strategic goods, under the NSGL, or the provision of related services to obtain an authorization from the STMO as provided in this Act and its implementing rules and regulations. In addition, any person who intends to engage in the re-export or reassignment of strategic goods is required to obtain an authorization when this has been made a condition for the authorization of the exports from the Philippines.

No person shall be allowed to place .any strategic goods in or on any carrier located within the territorial and economic jurisdiction of the Philippines without the consent of the owner or operator of the carrier. Such owners and operators shall be prohibited from allowing the placement of strategic goods in or on any carrier unless the person presents an authorization issued by the STMO to export, import, transit or transship strategic goods.

All persons engaged in the business involving strategic goods are required to keep at their principal place of business, in the manner prescribed by the IRR to be issued by the NSC-STMCom for a period often (10) years from the date of the completion of the transaction, all records of the transaction and/or books of accounts, business and computer systems and all commercial and technical data related to the transaction including:

The customs broker shall submit to the BOC, a copy of the authorization and a copy of the extract of the manifest of the carrier, in or on which the strategic goods were loaded prior to its departure or arrival.

SECTION 11. End-Use Controls. – End-use controls may be imposed on strategic goods that are not in the NSGL (unlisted goods) and related services, and shall apply as follows:

SECTION 12. Control Over End-Use of Strategic Goods in the Philippines Under Governmental End-Use Assurances. – The STMO, in consultation with the NSC-STMCom as may be necessary, is authorized to certify the end-use of strategic goods in the Philippines based on the International Import Certificate, End-Use Certificate and Delivery Verification Certificate.

The STMO, within the limits of its competence on the basis of end-use licensing documents, shall exercise the function of certification of the end-use of strategic goods. In addition to the standard end-use certification assurances contained in the end- use documents, the STMO, in consultation with the NSC- STMCom, may add other terms and conditions in order to meet the requirements of the exporting country of the goods and the security interest of the Philippines.

The STMO shall be responsible for informing the competent authority of the end-use country and all countries through which the goods will be transshipped or transited. In fulfilling this responsibility, the STMO may request additional documents such as declarations of the shippers or refer to other relevant information obtained in the course of performing their functions under this Act.

The application, issuance, modification, suspension, or revocation procedures of end-use certification documentation shall be in accordance with the IRR and in consultation with the NSC-STMCom as may be necessary.

SECTION 13. Registration. – Any person who engages or intends to engage in the export, import, and re-export of strategic goods or provide related services shall register directly with the STMO.

SECTION 14. Issuance of Authorization. - Any person, prior to engaging in the export, import, re-export, reassignment, transit, transshipment of strategic goods, or the provision of technical assistance or related services shall apply for an authorization from the STMO. The application shall be in the manner and form prescribed under the IRR of this Act. The STMO is authorized to collect fees to cover the cost to be incurred in the processing of applications for authorization.

The STMO may issue an authorization to an applicant subject to conditions it may deem fit. It may renew an authorization with or without conditions.

The STMO may deny, issue with or without conditions, modify, limit, suspend, revoke, or annul the authorization based on its discretionary powers as specified in the IRR.

SECTION 15. Exemption from Authorization Requirement. – An authorization is not required under the following circumstances:

SECTION 16. Administrative Appeals. – Any person whose registration or authorization has been denied, suspended, modified, limited, revoked, or annulled, and any person upon whom administrative penalties have been imposed shall have the right =to appeal in accordance with the IRR. The decision on the appeal is final and executory.

SECTION 17. Liability Limitation. – If the STMO denies, suspends, limits, revokes or annuls an authorization or registration, it shall not be liable for damages that may be caused by such acts.

SECTION 18. Confidentiality of Business Proprietary Information. – Any information obtained under this Act that are marked as confidential business information shall not be disclosed to any other party except in the furtherance of justice and law enforcement, national security or foreign policy interest, as determined by the STMO, unless the party providing such information has consented to its disclosure.

CHAPTER IV
LIABILITIES, VIOLATIONS, PENALTIES AND SANCTIONS

SECTION 19. Unlawful Act and Penalties. –

SECTION 20. Attempt to Commit Violations of this Act. — Any attempt to commit any crime under Section 19(a) of this Act shall be penalized by imprisonment for a period from six (6) months and one (1) day to six (6) years, and a fine from one hundred thousand pesos (P100,000.00) to one million pesos (P1,000,000.00).

SECTION 21. Investigation. – If in the course of conducting an investigation for violations committed under this Act, the STMO comes across evidence of possible criminal violations, it shall refer the matter and turn over all available evidence to the following agencies:

After a finding that a prima facie case exists, the aforementioned agencies shall refer such case to the Department of Justice for preliminary investigation.

Appropriate forfeiture proceedings for materials and goods confiscated shall be filed in accordance with existing laws, rules and regulations.

SECTION 22. Administrative Penalties. – The STMO shall impose on any person found to have committed violations under this Act the following administrative penalties:

The imposition of the penalty shall be without prejudice to the filing of appropriate criminal charges against the persons responsible for the violation.

SECTION 23. Criminal Liability of Officers of Partnerships, Corporations, and Other Juridical Entities.- In case any of the violations of this Act is committed by a partnership, corporation, association, or any other juridical persons, the partner, president, director, manager, trustee, administrator, or officer who willfully and intentionally consents to, or tolerates such violation shall be held criminally liable as co-principal. The penalty provided for the offense shall be imposed upon the responsible officers who participated in the commission of the crime or who have willfully and intentionally permitted its commission.

SECTION 24. Administrative Liability of Government Officials and Employees. – Any government official or employee who commits, or facilitates the commission of, any violation of this Act shall be administratively liable under Civil Service rules, without prejudice to criminal liability under this Act. The concerned government official or employee shall, upon conviction, be dismissed from the service.

SECTION 25. Additional Penalty if Offender is an Alien/ Foreign National. – In addition to the penalties prescribed in this Act, any alien/foreign national who violates any provision of this Act shall, after service of sentence, be deported immediately without further proceedings, and be barred permanently from entering the country.

SECTION 26. Forfeiture. – In addition to imprisonment and fine, the strategic goods subject of the offense, including the proceeds derived therefrom, shall be forfeited in favor of the government.

After conviction, the Regional Trial Court shall enter a judgment of forfeiture of the goods, including its proceeds, in favor of the Government of the Philippines and shall authorize the forfeiture of the seized goods.

Following the seizure of the strategic goods, the relevant government agency shall direct the disposition of the property by sale or other commercially feasible means. The offender or any person acting on behalf of the offender shall not be eligible to purchase the forfeited property. The proceeds of any sale or disposition of any property confiscated or forfeited under this section shall be paid directly to the National Treasury. All proper expenses .incurred in the proceedings for the confiscation, forfeiture, custody and maintenance of the property pending disposition, as well as expenses for publication and court costs shall be taken from the General Appropriations Act (GAA).

If the strategic goods are located outside of the Philippines, the court may order the convicted offender to pay to the National Treasury the amount equal to the value of the strategic goods or related services under the contract or as assessed by the STMO, whichever is greater.

SECTION 27. Protection of Officers. – No action or prosecution shall be brought, instituted or maintained against the NSC-STMCom or the STMO or an authorized officer for or on account of or in respect of any act ordered or done for the purpose of carrying into effect this Act or IRR if the act was done in good faith and under a reasonable belief that it was necessary for the purpose intended to be served thereby.

SECTION 28. Jurisdiction. - The Regional Trial Court shall have jurisdiction over criminal prosecutions for violation of any provision of this Act, as well as over applications for the issuance and grant of applicable provisional remedies under the Rules of Court.

SECTION 29. International Legal Cooperation. – For the purposes of this section, the Department of Justice (DOJ) shall make and receive requests for assistance and to execute or arrange for the execution of such requests.

Subject to the provisions of the extradition law and the applicable extradition treaty, the offenses defined in this Act shall be deemed included as extraditable offenses in an extradition treaty in which the Philippines is a party.

CHAPTER V
FINAL PROVISIONS

SECTION 30. Implementing Rules and Regulations (IRR). – Within six (6) months from the effectivity of this Act, the Implementing Rules and Regulations Committee to be composed of the member-agencies of the NSC-STMCom shall draft and issue the IRR for its effective implementation, after public consultations with stakeholders: Provided, That the non-issuance of the IRR shall not prevent the coming into force of this Act: Provided, further, That any administrative proceedings under this Act shall be suspended pending the issuance of the IRR.

SECTION 31. Appropriations. – The amount needed for the initial implementation of this Act shall be charged against the current year’s appropriations of the DTI. Thereafter, such sums as may be necessary for the implementation of this Act shaffbe included in the annual General Appropriations Act.

SECTION 32. Separability Clause. – If any provision of this Act is held to be invalid or unconstitutional, the provisions not otherwise affected shall remain valid and subsisting.

SECTION 33. Suppletory Application. – For purposes of this Act, the Revised Penal Code and other applicable laws shall have suppletory application.

SECTION 34. Repealing Clause. – All laws, decrees, executive orders, rules and regulations and other issuances or parts thereof which are inconsistent with the provisions of this Act are hereby repealed, amended or modified accordingly.

SECTION 35. Effectivity Clause. – This Act shall take effect after fifteen (15) days from its publication in the Official Gazette or in a newspaper of general circulation.

Approved,

Senate Bill No. 2762, which was approved by the Senate on August 17, 2015, was adopted as an amendment to House Bill No. 5822 by the House of Representatives on August 25, 2015.

Approved: NOV 13 2015

(Sgd.) BENIGNO S. AQUINO III
President of the Philippines