What does the Anti-Dummy Law prohibit?

It prohibits using a Philippine or U.S. citizen’s name or citizenship to evade laws that require such citizenship, and it forbids falsely showing that a corporation meets the required citizen ownership percentage.

Who can be punished under the Anti-Dummy Law?

Both the citizen who allows his name or citizenship to be used and the foreigner who profits from it can be punished, as well as corporate officers who simulate required citizen ownership.

What are the penalties for violating the law?

Violators face imprisonment of at least two years and at most ten years, plus a fine ranging from two thousand to ten thousand pesos.

What happens to a corporation that breaks the Anti-Dummy Law?

The corporation can be dissolved after a proper court proceeding.

Can lack of assets be used as evidence of a violation?

Yes, if a citizen had no real or personal property, credit, or assets equal in value to the holdings acquired, that circumstance may be admitted as evidence of a violation.

When did the Anti-Dummy Law take effect?

The law took effect immediately upon its approval on October 30, 1936.

CA 108 - Anti-Dummy Law (1936)

Philippine lawLegal status not independently verified

In brief

AI summary. Verify against the source below.

The Anti-Dummy Law (Commonwealth Act No. 108) makes it illegal to use a Philippine or U.S. citizen's name or citizenship to bypass laws that require such citizenship for certain rights, and to fake the required citizen ownership in corporations. Violators face imprisonment, fines, and possible dissolution of the offending corporation.

Who it affects: It applies to Philippine and U.S. citizens, foreign nationals, and corporations or associations (and their officers) that seek to evade citizenship or ownership requirements.

Key provisions

Use of citizen's name to evade law. If a law requires Philippine or U.S. citizenship to enjoy a right, a citizen who lets his name or citizenship be used to get around that rule can be imprisoned for 2‑10 years and fined 2,000‑10,000 pesos. [Sec. 1]
Foreigner profiting from evasion. A foreigner who benefits from the illegal use of a citizen’s name or citizenship is punished with the same imprisonment and fine as the citizen. [Sec. 1]
Circumstantial evidence of violation. If the citizen had no real assets equal in value to the holdings they acquired, that fact can be used as circumstantial evidence of a violation. [Sec. 1]
Faking citizen ownership in corporations. When a law requires a minimum percentage of a corporation’s capital to be owned by Philippine or U.S. citizens, it is illegal to pretend that requirement is met if it is not. [Sec. 2]
Penalties for corporate officers. Presidents, managers, directors, or trustees of corporations that fake the required citizen ownership can be imprisoned for 2‑10 years and fined 2,000‑10,000 pesos. [Sec. 2]
Dissolution of violating corporations. A corporation found guilty of any violation of this Act may be dissolved after proper court proceedings. [Sec. 3]
Effective date. The law became effective as soon as it was approved on October 30, 1936. [Sec. 4]

Common questions

What does the Anti-Dummy Law prohibit?: It prohibits using a Philippine or U.S. citizen’s name or citizenship to evade laws that require such citizenship, and it forbids falsely showing that a corporation meets the required citizen ownership percentage. [Sec. 1, Sec. 2]
Who can be punished under the Anti-Dummy Law?: Both the citizen who allows his name or citizenship to be used and the foreigner who profits from it can be punished, as well as corporate officers who simulate required citizen ownership. [Sec. 1, Sec. 2]
What are the penalties for violating the law?: Violators face imprisonment of at least two years and at most ten years, plus a fine ranging from two thousand to ten thousand pesos. [Sec. 1, Sec. 2]
What happens to a corporation that breaks the Anti-Dummy Law?: The corporation can be dissolved after a proper court proceeding. [Sec. 3]
Can lack of assets be used as evidence of a violation?: Yes, if a citizen had no real or personal property, credit, or assets equal in value to the holdings acquired, that circumstance may be admitted as evidence of a violation. [Sec. 1]
When did the Anti-Dummy Law take effect?: The law took effect immediately upon its approval on October 30, 1936. [Sec. 4]

[ Commonwealth Act No. 108, October 30, 1936 ]

AN ACT TO PUNISH ACTS OF EVASION OF THE LAWS ON THE NATIONALIZATION OF CERTAIN RIGHTS, FRANCHISES OR PRIVILEGES.

Be it enacted by the National Assembly of the Philippines:

Section 1. In all cases in which any constitutional or legal provision requires Philippine or United States citizenship as a requisite for the exercise or enjoyment of a right, franchise or privilege, any citizen of the Philippines or the United States who allows his name or citizenship to be used for the purpose of evading such provision, and any alien or foreigner profiting thereby, shall be punished by imprisonment for not less than two nor more than ten years, and by a fine of not less than two thousand nor more than ten thousand pesos.

The fact that the citizen of the Philippines or of the United States charged with a violation of this Act had, at the time of the acquisition of his holdings in the corporations or associations referred to in section two of this Act, no real or personal property, credit or other assets the value of which shall at least be equivalent to said holdings, shall be admissible as circumstantial evidence of a violation of this Act.ℒαwρhi৷

Section 2. In all cases in which a constitutional or legal provision requires that, in order that a corporation or association may exercise or enjoy a right, franchise or privilege, not less than a certain per centum of its capital must be owned by citizens of the Philippines or the United States, or both, it shall be unlawful to falsely simulate the existence of such minimum of stock or capital as owned by capital such citizens of the Philippines or the United States or both, for the purpose of evading said provision. The president or managers and directors or trustees of corporations or associations convicted of a violation of this section shall be punished by imprisonment for not less than two nor more than ten years, and by a fine of not less than two thousand nor more than ten thousand pesos.

Section 3. Any corporation or association violating any of the provisions of this Act shall, upon proper court proceedings, be dissolved.

Section 4. This Act shall take effect upon its approval.

Approved, October 30, 1936.