THE Securities and Exchange Commission (SEC) yesterday said it will prioritize reforms has vowed to invest more resources to further strengthen the Philippines anti-money laundering and combating of financing of terrorism (AML/CFT) efforts.
While the Philippines remains in the “grey list” of the global anti-money laundering watchdog, Financial Action Task Force (FATF), the SEC said it will continue investing in digitalizing and optimizing resources to ensure the reforms implemented will be sustainable, according to Emilio Aquino, SEC chairman.
The FATF announced at its plenary last week “the Philippines has substantially completed its action plan,” composed of 18 items that had kept the country under increased monitoring since June 2021.
Following its initial determination of the Philippines’ compliance with its action items, the FATF Asia/Pacific Joint Group will proceed with an on-site visit early next year to verify that implementation of the AML/CFT reforms have begun and are being sustained, and that the necessary political commitment remains in place to sustain implementation in the future.
Failure to address the remaining action plan items would have put the Philippines at the risk of entering the blacklist.
FATF member countries impose restrictions and additional checks, and possibly refusal, of financial transactions with countries in the blacklist. These result in failed transactions, delays and costs that may be passed on to consumers.
“This significant milestone demonstrates the Philippines’ strong commitment to tackling money laundering and terrorism financing by adopting crucial reforms aligned with global standards and best practices,” said Aquino.
In assessing the Philippines’ progress in addressing AML/CFT concerns, FATF cited reforms enhancing and streamlining access of law enforcement agencies to beneficial ownership (BO) information and taking steps to ensure that BO information is accurate and up-to-date, and those demonstrating that appropriate measures are taken with respect to non-profit organizations (NPO) without disrupting legitimate NPO activity, among others.
Aquino said among the SEC’s contributions were successful implementation of reforms demonstrating risk-based supervision of designated non-financial businesses and professions; increase in the use of financial intelligence and in money laundering investigations and prosecutions in line with risk; increase in identification, investigation and prosecution of TF cases; and effectiveness of the targeted f inancial sanctions framework for TF and proliferation financing.
“For one, the SEC mandated the declaration of beneficial ownership in the General Information Sheets of all corporations and made the same available to the Philippine National Police, the Bureau of Internal Revenue, the Philippine Drug Enforcement Agency, the National Bureau of Investigation, and other law enforcement agencies,” Aquino said.
In 2021, SEC prohibited the issuance and sale of bearer shares and bearer share warrants to further promote transparency and curb the misuse of corporations for illicit activities, he added.
“To promote corporations’ compliance with their reportorial requirements, the SEC launched in 2023 an amnesty program that eventually helped raise the compliance rate from around 30 percent to nearly 70 percent in just two years,” the SEC said.
The SEC then imposed higher penalties, underscoring the importance of transparency and disclosure requirements imposed on corporations, Aquino said.
The SEC has “strategically invested in technology and human resources to enhance the effectiveness and sustainability of its AML/CFT reforms,” he added.
“Key initiatives include the development of the Electronic Filing and Submission Tool (eFAST) and the Electronic Simplified Processing of Application for Registration of Company (eSPARC), which enable not only ease of registration and compliance but also efficient data exchange,” Aquino said.
