The government is requiring mining, oil and gas companies to declare their beneficial or “real owners” as part of a new transparency rule in line with an international campaign to prevent the use of anonymous companies to hide or launder money and conceal potential conflicts of interest within the extractive sector.
More than 40 companies from the mining, oil and gas sectors participated in a workshop on beneficial ownership organized by the Chamber of Mines of the Philippines and conducted by the Department of Finance–Philippine Extractive Industries Transparency Initiative on Oct. 18 in Makati City.
The Chamber of Mines, an active member of PH-EITI, recognizes the merits of transparency in beneficial ownership specially for the extractive sector.
The activity centered on the new requirement for corporations to declare their beneficial owners as part of the general information sheet that all domestic corporations are mandated to file annually with the Securities and Exchange Commission.
The SEC issued Memorandum Circular No. 15, s. 2019 on July 26, 2019 that revised the GIS to include a beneficial ownership declaration form, requiring all registered stock and non-stock domestic corporations to disclose their beneficial owners.
Beneficial owners are defined as “the natural persons who ultimately own or control or exercise ultimate effective control over a corporation”.
It was approved as a policy measure to assist in the anti-money laundering efforts of government.
The PH-EITI, the government’s transparency initiative for the extractive sector, also required the reporting of beneficial owners of mining and oil and gas companies.
“There is a global shift towards 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,” said Chamber of Mines executive director Ronald Recidoro.
Officials of the Enforcement and Investor Protection Department of the SEC facilitated and provided technical expertise in the workshop which sought to assist the extractive companies to comply with the beneficial ownership disclosure requirements of both SEC and PH-EITI.
Finance assistant secretary Ma. Teresa Habitan said the 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”.
The revised GIS under SEC MC 15 mandates corporations to fill out a beneficial information declaration form that asks for nine categories of beneficial owners and their information, including complete name, residential address, nationality, tax identification number and percentage of ownership or voting rights.