SEC Warns Philippines Companies on Lack of AML Compliance

The Securities Exchange Commission (SEC) warned that it would enforce the Revised Corporation Code of the Philippines (RCC) and penalise all corporations not complying with the AML measures.

The SEC disclosed information about the 22,403 Philippine corporations that were not upholding international standards in compliance with strict laws to combat money laundering and terrorist financing. According to the AML regulations, they must submit the General Information Sheet (GIS) after five years of incorporation. But, these companies have failed, and as a result, their certificates of operating in the country may be revoked. The RCC section 177 states that every domestic and foreign corporation operating in the country must submit its annual financial statement (AFS) and GIS to the SEC. The RCC law declared, “Formally organise and commence its business within five years from the date of its incorporation,” and the license of organisations can be revoked under RCC 21 sanction. 

The SEC Chairperson, Emilio B. Aquino, stated, “Corporations’ timely submission of their AFS, GIS, and other reportorial requirements is vital in maintaining a healthy and vibrant corporate sector, as this helps us identify active versus inactive corporations, enhance and organise the Commission’s digital database, and protect the public from fraud.” 

Law enforcement has access to corporate information due to the strengthened fiscal system. It also assists in strengthening CFT and AML compliance systems to protect it from various financial crimes and safeguard the country from the Financial Action Task Force (FATF) “gray list.” The SEC chairperson added, “Monetary penalties, placement under delinquency status, and suspension and revocation of certificate of incorporation, as provided under the RCC.” 

Aquino encouraged all corporations to follow the SEC amnesty program and submit the GIS and AFS before Dec 4th to avoid hefty fines from the regulatory authority. The basic penalties will also be raised after the last date of document submission. Corporations can now submit the required information by the SEC’s Electronic Filing and Submission Tool (eFAST) to streamline compliance. 

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