28/09/23

US: SEC to use ownership data vs corruption, tax evasion

As published on: businessmirror.com.ph, Thursday 28 September, 2023.

THE Securities and Exchange Commission (SEC) announced last Wednesday that it has partnered with the United Nations Office on Drugs and Crime and Open Ownership (UNODC) to harness the potential of using beneficial ownership data in curbing corruption in the government procurement process.

The SEC requires the declaration of beneficial owners in the general information sheet through SEC Memorandum Circular 15 (series of 2019).

“Beneficial ownership plays an important role in detecting indicators of bid rigging and conflicts of interest during the procurement process,” SEC Chairman Emilio B. Aquino said. “As such, it is important that we ensure there are few avenues for corrupt individuals to take advantage of the system.”

A beneficial owner is a natural person who ultimately owns or exercises ultimate effective control over a corporation and benefits from such structure. This is different from legal owners as beneficial owners may directly or indirectly have the power to vote or influence transaction decisions of the company, even without them being reported as a stockholder, member, director or officer.

The SEC and the UNODC organized a focus group discussion on beneficial ownership data use in public procurement. Participants included officers from the Office of the President, Philippine Competition Commission, House of Representatives, Office of the Ombudsman, Philippine Government Electronic Procurement System and the Technical Support Office of the Government Procurement Policy Board (GPPB-TSO).

The discussions mainly focused on the application of beneficial ownership on public procurement, emphasizing the importance of data in mitigating corruption and improving the decision-making process of the procurement lifecycle.

Last year, the SEC signed a data-sharing agreement with the GPPB-TSO as part of its commitment to enhance public procurement and beneficial ownership transparency.

The SEC has also partnered with the Bureau of Internal Revenue to explore use of beneficial ownership data to support tax enforcement

The regulator has put forward the use of beneficial ownership data in promoting tax integrity and combating corruption.

Beneficial ownership data can be used to reveal individuals who ultimately control legal entities and aid in the promotion of tax integrity.

“Taxation is an important element of ensuring the economic stability of a nation,” Aquino said.

“Through our cooperation with the UNODC and other government agencies, we hope to find ways to limit tax evasion and aid in the economic development of the nation by maintaining tax integrity,” the SEC chairman added.

Tags

US SEC Tax Evasion