THE Securities and Exchange Commission (SEC) has set up new protocols of transparency to combat money laundering and terrorist financing and keep the country off the gray list of the Financial Action Task Force (FATF).
SEC Memorandum Circular No. 1 issued on Jan. 27, 2021 provides the "guidelines in preventing the misuse of corporations for illicit activities through measures designed to promote transparency of beneficial ownership."
"There are arrangements that allow individuals to assume a management or ownership position on behalf of their principals and in turn hide the identity of the beneficial owner. We can see that this is not ideal because it exposes the corporations to the risk of being misused for illegal activities," said SEC-Cebu Extension Office Counsel I Lawyer Giness Marie R. Teves.
The guidelines adopt the recommendations in the Mutual Evaluation Report issued by FATF in October 2019.
FATF recommended that the Philippines introduce measures to ensure that bearer share warrants, nominee directors, and nominee shareholders are not misused for money laundering and terrorist financing.
FATF also urged the Philippines to ensure that mechanisms operate to ensure that information on the beneficial ownership of a company can be determined promptly. (NRC/With PR)