Enhancing the Philippines’ capacity to collect and verify beneficial ownership data

Manila (Philippines), 13 September 2022 - Transparency of beneficial ownership of corporate vehicles is increasingly regarded as an essential element in the fight against corruption. It also serves as a tool for preventing money laundering and countering the financing of terrorism. As numerous case studies have shown, corporate vehicles, including companies, trusts, foundations, and fictitious entities, can be misused to conceal the identities of people involved in large-scale corruption and to hide and transfer the proceeds of corruption. According to the Analysis of Regulatory Deficiencies in Beneficial Ownership Regulations and Company Registries in Southeast Asia, the impact of corruption on economic growth is significant, with approximately 20-40% of official development assistance wasted every year.

With the support of the U.S. Department of State, Bureau of International Narcotics and Law Enforcement Affairs, under the COVID-19 Anti-Corruption Response and Recovery Project, UNODC, as the guardian of the United Nations Convention against Corruption (UNCAC) is supporting the Securities and Exchange Commission (SEC) of the Philippines, in developing its capacity to manage the newly introduced beneficial ownership disclosure system. The initiative aims to enhance the collection and verification of beneficial ownership data and the provision of timely access to the data by competent authorities and law enforcement agencies.

On 13 September 2022, UNODC organized a workshop on the Use Cases of Beneficial Ownership Information and Data Sharing Agreements (DSAs) in Preventing and Detecting Corruption in Manila. 45 participants attended the workshop in person, and 52 participants attended the workshop online from procurement authorities, law enforcement agencies, prosecutors, tax authorities, and other national authorities with the objective of:

• learning the concept of beneficial ownership and the criteria used to identify beneficial ownership in the Philippines;
• learning how to request beneficial ownership information from SEC;
• learning how to use beneficial ownership information to detect criminal actors in financial crimes;
• learning the use cases of beneficial ownership information in investigating and preventing procurement corruption and fraud, in improving service delivery through increased competition and enhanced due diligence, and in verifying supplier eligibility;
• learning how beneficial ownership disclosure can substantially limit risks of conflict of interest in public-private contractual relations; and
• proposing amendments to the draft DSA.

During the workshop, the SEC presented the concept of beneficial ownership and the criteria used to identify beneficial ownership in the Philippines. The Anti-Money Laundering Commission (AMLC) shared its experiences in requesting beneficial ownership information from the SEC, and how access to beneficial ownership information helps the AMLC in investigating financial crimes and money laundering, and asset recovery.

The speakers presented various ways to utilize beneficial ownership information in preventing and detecting corruption and other financial crimes, such as:

•  Tax Justice Network discussed how to use beneficial ownership information to detect criminal actors in financial crimes;
• The utilization of beneficial ownership information in investigating and preventing procurement corruption and fraud, improving service delivery through increased competition and enhanced due diligence, and verifying supplier eligibility. The advantages that the Government Procurement Policy Board will gain by entering into a Data Sharing Agreement with the SEC were also emphasized during the session;
• Cases studies in Slovakia that illustrate the risks of conflict of interest in public-private contractual relations, and how beneficial ownership disclosure can substantially limit these risks. Additionally, a speaker also covered why verification and public and free disclosure of beneficial ownership data is crucial. This included the Slovak experience involving “gatekeepers” in the verification process, and how shifting the burden of proof to them may be a useful tool in ensuring that the information collected by BO registries are accurate and verified.

In the latter part of the workshop, the SEC discussed how law enforcement agencies and national authorities may request beneficial ownership information, and the provisions of the proposed data sharing agreement. Participants from law enforcement agencies, procurement authorities, and other national authorities provided their comments to the proposed Data Sharing Agreement.

This workshop was part of activities funded by the US Department of State's Bureau of International Narcotics and Law Enforcement Affairs (INL). Footage (where available) and written summaries of UNODC events are publicly available via our website.

 

Other Useful Links:

• A written summary and short video of a training on financial crime investigations in the Philippines is available here
• UNODC’s wider work on open data standards in the Philippines is summarized here
• The footage of UNODC Anti-Corruption Webinars in Southeast Asia, where available, can be viewed on our social media page here
• A summary of activities by the UNODC Anti-Corruption Team in Southeast Asia is available on our website here