'Chilling effect': Groups slam new SEC guidelines for nonprofits
MANILA, Philippines – Lawyers, civil society organizations, and a group of lawmakers advocating human rights have slammed the new set of guidelines of the Securities and Exchange Commission (SEC) for nonprofits, calling it a government tool to persecute its political enemies.
In a forum on Wednesday, February 6, members of the Mambabatas para sa Karapatang Pantao (Makatao) Coalition and civil society groups took turns questioning SEC's Memorandum Circular No. 15 (MC 15), which the agency said sets guidelines for the protection of registered non-profit organizations (NPOs) from money laundering and terrorist financing abuse.
SEC issued MC 15 on November 7, 2018, which it said will enhance its registration and monitoring system to obtain necessary information from NPOs for regulatory and risk assessment purposes.
MC 15 does not only cover foundations, non-stock corporations, NPOs, NPOs at high risk based on SEC risk assessment, but also politically-exposed persons or individuals with prominent public position/function, including their immediate family members, close relationships, and associates.
MC 15 requires the mandatory disclosure of sources, amount, and application of funds; programs and activities planned, ongoing, and accomplished; beneficiaries; and locations of operations.
Groups covered by the new guidelines are supposed to comply with the requirements by May 7.
Civil society groups and other personalities expressed concern that MC 15 could be used by the government to persecute its political enemies.
One of those who spoke up against MC 15 was Albay 1st District Representative Edcel Lagman, lead convenor of Makatao, a human rights-focused coalition in the House of Representatives.
“Red-tagging, witch-hunting, and profiling of activists exacerbate violations of human rights and fundamental freedoms. In this light, it calls for us, more particularly those who are members of nonprofit organizations, to critically and thoroughly examine the SEC’s Memo 15,” Lagman said during the gathering.
Pacifico Agabin, former dean of the UP College of Law, questions SEC's authority to issue MC 15.
“Where did the SEC get this authority? The SEC is supposed to perform functions of supervision and control functions of corporations but it is only in the context of economic development. It has nothing to do with terrorist financing or money laundering," Agabin said.
"Money laundering is the province of Anti-Money Laundering Council. Of course terrorist financing is the province of police, military and intelligence agencies,” he added.
Agabin called also cited the "chilling effect" created by MC 15 on nonprofits.
“While the provisions of this MC are seemingly neutral, we know very well that these types of regulation are in actuality...directed for political and religious outliers…. It creates a chilling effect on political advocacies and political thought that is not in consonance to the policies of the administration,” he said.
Jaybee Garganera of Alyansa Tigil Mina, a national coalition against destructive mining in the Philippines, also weighed in on the implications of MC 15 on nonprofits.
“We are about a hundred organizations obviously affected by this Memo Circular 15. If we comply, we unnecessarily expose ourselves and our members and the communities that we service. If we do not comply we run the risk of being unnecessarily labeled and tagged according to the risk assessment and even blacklisted," he said.
"That is not a very good option for us who work in the environment and human rights work,” Garganera added.
The SEC said it would impose fines ranging from P10,000 to P1,000,000 plus P2,000 for each day of non-compliance, and revocation of registration. – Rappler.com