The Securities and Exchange Commission (SEC) has signed data sharing agreements (DSAs) with nine law enforcement agencies and competent authorities, granting them access to beneficial ownership information of corporations registered with the Commission.
The SEC said this will boost its efforts to combat money laundering and terrorism financing, as it equips more government agencies with data that may help them uncover illegal activities carried out through the corporate vehicle.
Signatories to the DSAs include the Philippine Drug Enforcement Agency, Insurance Commission, Cagayan Economic Zone Authority, National Bureau of Investigation, Department of Justice, Philippine Center on Transnational Crime, Department of Agriculture (DA), Intelligence Service of the Armed Forces of the Philippines (ISAFP), and the Philippine Economic Zone Authority (PEZA).
“In this era where data is gold and financial fraud, including cyber fraud, loom large—collaboration between the SEC and law enforcement is not just beneficial; it's imperative,” SEC Chairperson Emilio B. Aquino said.
He added that “first and foremost, sharing corporate data with law enforcement is a powerful tool in combating crime. By providing law enforcement agencies access to pertinent data, we empower them to investigate and apprehend these perpetrators swiftly and effectively.”
Since 2022, the SEC has been signing DSAs with several government agencies, including the Bureau of Internal Revenue, Bureau of Immigration, Department of Trade and Industry- Strategic Trade Management Office, National Intelligence and Coordinating Agency and Philippine Amusement and Gaming Corporation.
The list also includes the Government Procurement Policy Board, Philippine National Police, and the Department of the Interior and Local Government.
The adoption of these agreements has yielded requests for beneficial owners' information for more than 5,400 corporations and individuals.
“Whether it's illegal drugs, transnational crime, money laundering, financial fraud, corruption, tax evasion or smuggling - timely access to corporate data can make all the difference in bringing criminals to justice,” Aquino said.
He noted that “sharing corporate data fosters a culture of accountability and transparency within our corporations…It sends a clear message that the Philippines is not a haven for illicit corporate activities, thereby bolstering trust in the integrity of our business sector.”
Beneficial owners of a corporation are distinguished from legal owners, which are defined as natural or juridical persons who, in accordance with the law, owns or has the controlling ownership interest over the corporation, or has the ability of taking relevant decisions within the corporation and impose those resolutions.
The SEC collects beneficial ownership information from its regulated entities through SEC Memorandum Circular (MC) No. 15, Series of 2019, which amended the General Information Sheet (GIS) to include beneficial ownership information. In 2020, the Commission issued SEC MC No. 30, Series of 2020, expanding the collection of beneficial ownership data to foreign corporations.
The Commission also issued in 2021 SEC MC No. 1, Series of 2021, providing the Guidelines in Preventing the Misuse of Corporations for Illicit Activities through Measures Designed to Promote Transparency.
The SEC subsequently promulgated SEC MC No. 10, Series of 2022, increasing the penalties and imposing additional non-financial penalties for non-disclosure and false disclosure of beneficial ownership information, among others.
Sharing beneficial ownership data is also in line with the recommendations of the Financial Action Task Force (FATF), an intergovernmental money laundering and terrorist financing watchdog that sets international standards to prevent such illegal activities.