SEC teams up with BIR, PNP, Pagcor in crackdown vs criminal financing

MANILA , Philippines  – The Securities and Exchange Commission (SEC) is mounting a fresh crackdown on criminal financing activities, announcing that it has signed a data sharing agreement with government tax, police and gaming authorities.

Under the agreement, the SEC will provide timely access beneficial ownership data. This refers to the ultimate personalities that own corporations and whose identities can be obscured by dummies and layers of legal ownership.

“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 imposing those resolutions,” the SEC said.

The data sharing agreement was recently signed between the Bureau of Internal Revenue (BIR), Philippine National Police (PNP), and  Philippine Amusement and Gaming Corp. (Pagcor).

The SEC collects beneficial ownership information from its regulated entities. This came after memorandum circular in 2019 amended requirements for the general information sheet submitted by corporations to include beneficial ownership data.

In 2020, it issued SEC MC No. 30, Series of 2020, expanding the collection of beneficial ownership data to foreign corporations.

“The [agreement] will allow the SEC to give timely access to accurate and adequate beneficial ownership information to competent authorities, in line with the recommendations of the Financial Action Task Force,” SEC said.

“The FATF is an intergovernmental money laundering and terrorist financing watchdog that sets international standards to prevent such illegal activities,” it added.

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.

In 2022, it also increased fines while imposing additional non-financial penalties for non-disclosure and false disclosure of beneficial ownership information/

Information gathered by the SEC through the aforementioned circulars play a vital role in identifying the natural person/s maintaining ultimate effective control of the corporation.

The SEC said the agreement would protect personal and sensitive personal data by incorporating measures provided under Republic Act No. 10173, or the Data Privacy Act of 2012, and its implementing rules and regulations, as well as the pertinent circular issued by the National Privacy Commission Circular on data sharing between government agencies.

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