VARIOUS civil society organizations on Wednesday are asking
the Securities and Exchange Commission (SEC) to reconsider a memorandum
circular passed late last year that seeks to place additional submission
requirements from all the nonprofit organizations, mostly details of their
source of funds and the disbursement of money.
In a forum organized by Mambabatas Para Sa Karapatang Pantao, many of the groups said they were not consulted when the SEC passed its Memorandum Circular 15, Series of 2018, and they are prepared to question the said circular up to the Supreme Court.
The SEC in November last year issued the memorandum titled “Guidelines for the Protection of SEC Registered Non-Profit Organizations from Money Laundering and Terrorist Financing Abuse.” The rule was published on November 8 last year and will take effect six months after or on May 7.
Roselle S. Rasay, executive director of Caucus of Development NGO Networks, said they were not consulted when the ruling was passed by the agency.
“We will engage the SEC to specifically raise the issue of nonparticipation of the sector. We plan to ask them to suspend the memorandum until all these issues are clarified,” she said.
Weapon vs groups?
According to Pacifico Agabin, former dean at the University of the Philippines College of Law, the new guidelines can be used by the current administration against groups that it considered as “enemy of the state.” These may include organizations like Kadamay, Ibon Foundation and several other human-rights groups.
“It is best to know what is the compelling interest of the SEC for this kind of memorandum,” he said.
According to Rasay, there are no cases of legitimate civil society organizations whose money was linked to money laundering or terrorist financing, asidefrom that of Janet Napoles, who was the person behind the pork-barrel scam. The said scam used several nongovernment organizations (NGOs) to transfer the discretionary funds of some of the legislators.
SEC explains
According to the SEC, the memorandum was released “to enhance its registration and monitoring system to obtain the necessary information of the nonprofit organizations for regulatory and risk-assessment purposes” and to ensure that the groups were not being used by terrorist organizations to funnel money.
The SEC will ask the nonprofit groups, which included foundations, to submit a form that mainly asks for all the details of the source of funds and financial disbursements. The agency will then assess each of the nonprofit group—whether they are low-, medium-, high-risk and blacklisted. There will be more requirements for medium- and high-risk groups.
The SEC will slap a fine of between P10,000 and not more than P1 million for noncompliance.