The Securities and Exchange Commission (SEC) is exploring the potential of using beneficial ownership data (BOD) as a valuable tool in combating corruption within government procurement processes.
In partnership with the United Nations Office on Drugs and Crime (UNODC) and Open Ownership (OO), the SEC has proposed the idea of harnessing BOD to strengthen efforts to ensure tax integrity and address issues related to corruption.
The SEC has highlighted the BOD’s ability to unveil the individuals who ultimately control legal entities, thus contributing to the promotion of tax integrity.
SEC chairman Emilio Aquino noted the crucial role of taxation in maintaining economic stability.
“Through our collaboration with the UNODC and other government agencies, we aim to identify ways to curb tax evasion and support the nation’s economic development by upholding tax integrity,” he said.
Aquino further emphasized that disclosures related to beneficial ownership play a crucial role in identifying warning signs such as bid rigging and conflicts of interest during the procurement process.
“It is imperative that we minimize opportunities for corrupt individuals to exploit the system,” Aquino said.
The SEC defines a beneficial owner as a natural person who possesses ultimate ownership or exercises ultimate effective control over a corporation.
This definition differs from legal ownership, as beneficial owners may directly or indirectly influence the company’s decision-making processes, even if they are not officially listed as stockholders, members, directors, or officers.
Currently, the SEC mandates the declaration of beneficial owners on the general information sheet.