To ensure that dirty money cannot enter the country through extractive industries, the government requires mining and oil firms to disclose their beneficial owners as mandated under a recent rule issued by the Securities and Exchange Commission (SEC).
“Beneficial ownership disclosure in the country is an enormous task, but we appreciate its value in curbing illicit financial activities. We are glad that the SEC is with us in this undertaking,” Assistant Finance Secretary Maria Teresa Habitan said in a statement.
Habitan is also the alternate chair and focal person for the Philippine Extractive Industries Transparency Initiative (PH-EITI) multistakeholder group.
Memorandum Circular No. 15, s. 2019 issued by the SEC in July required all registered stock and nonstock Filipino-led corporations to disclose their beneficial owners by submitting a revised general information sheet (GIS) that now included a beneficial ownership declaration form, PH-EITI noted in a statement.
It defined “beneficial owners” as the natural persons who ultimately owned or controlled or exercised ultimate effective control over a corporation.
The beneficial ownership declaration form, meanwhile, requires the following information: complete name, nationality, percentage of ownership or voting rights, residential address and tax identification number.
All domestic corporations must submit their GIS, which now included the beneficial ownership declaration form, to the SEC yearly.
PH-EITI said MC 15 formed part of the government’s antimoney laundering drive.
“The PH-EITI, the government’s transparency initiative for the extractive sector, required the reporting of beneficial owners of mining and oil and gas companies in line with an international campaign to counter or prevent the use of anonymous shell companies to hide or launder money and conceal potential conflicts of interest within the extractive sector,” it said.
On Oct. 18, the Department of Finance-led PH-EITI and the Chamber of Mines of the Philippines (COMP) held a workshop to discuss the SEC’s beneficial ownership rule, which was attended by over 40 companies from the gas, oil and mining industries.
“There is a global shift toward increased disclosure of beneficial owners, and COMP is committed to taking a lead role in this direction through the PH-EITI. We see the benefits of increased transparency in beneficial ownership—it enhances confidence in our local companies, thereby helping improve the investment climate. More importantly, it can help prevent corruption and illicit financial flows, and can increase trust and accountability in the mining sector,” COMP executive director Ronald Recidoro was quoted by the PH-EITI as saying.
Under the 2016 EITI Standard, countries involved in EITI such as the Philippines must ensure that all firms with participating interests in extractive assets should have had disclosed beneficial ownership information by Jan. 1 next year, the EITI website said.
“The deadline for these disclosures highlights the need for greater cross-sectoral, cross-jurisdictional collaboration between government agencies tasked to implement beneficial ownership reforms,” the EITI said.
This is in line with the goal to address corruption risks, avoid conflicts of interests for politically exposed persons, improve the business climate, as well as prevent use of shell firms to perpetrate bribery, illicit financial flows and money laundering in the extractive sector, it added.