SEC: Philippines nears exit from dirty money list

MANILA, Philippines — The Philippines is inching closer to exiting the Financial Action Task Force (FATF) gray list after making significant progress in addressing the remaining issues in its anti-money laundering and combating the financing of terrorism (AML/CFT) controls, according to the Securities and Exchange Commission (SEC).

SEC chairperson Emilio Aquino attended the FATF plenary meeting in Singapore last week.

The SEC, which is part of the Anti-Money Laundering Council, said the global dirty money watchdog acknowledged during the meeting the substantial progress made by the Philippines.

These include demonstrating an increase in money laundering investigations and prosecutions, enforcing beneficial ownership transparency obligations and ensuring law enforcement access to beneficial ownership data records as well as implementing risk-based supervision of designated non-financial businesses and professions.

The SEC said one of the key contributors to these significant milestones has been the commission.

“The recognition of these significant milestones by FATF underscores the SEC’s commitment to being a reliable partner in the global fight against money laundering and terrorism financing. It also demonstrates our full support for the government’s effort to get out of the FATF gray list,” Aquino said.

The SEC in 2019 and 2020 mandated the declaration of beneficial ownership in the general information sheets of domestic and foreign corporations and made the same available to competent authorities of law enforcement agencies including the Philippine National Police, Bureau of Internal Revenue, Philippine Drug Enforcement Agency and the National Bureau of Investigation.

In 2021, the SEC issued a memorandum circular prohibiting the issuance and sale of bearer shares and bearer share warrants.

According to the SEC, these measures were crucial in promoting transparency and curbing the misuse of corporations for illicit activities.

Last year, the commission also initiated an amnesty program to enhance compliance with reportorial requirements and support the ease of doing business.

The corporate regulator said more than 85,000 companies have participated in the program, allowing them to rectify any delinquencies and waive past penalties while fulfilling only a single fee requirement.

Following the extended amnesty period until 2023, the SEC imposed severe penalties on non-compliant entities, suspending over 117,000 corporations to ensure adherence with transparency requirements.

The SEC said these efforts have seen its compliance rate jump from around 30 percent to nearly 70 percent in two years.

“The SEC remains dedicated to sustaining the gains made in beneficial ownership transparency and compliance,” Aquino said.

The SEC said the government, represented by Executive Secretary Lucas Bersamin, reaffirmed its commitment to continuing its efforts to combat money laundering, terrorism financing and proliferation financing of weapons of mass destruction during the FATF plenary.

With the Philippines yet to adequately address the gaps in its regime to counter money laundering as well as terrorist and proliferation financing, the FATF retained the country on its gray list for the third straight year.