SEC registry Harbor flags hidden corporate ownership schemes

By Rjay Zuriaga Castor

The Securities and Exchange Commission’s digital beneficial ownership registry has become a key instrument for exposing schemes that hide who ultimately owns and controls corporations, regulators said Wednesday.

The Securities and Exchange Commission (SEC)-Iloilo, a member of the multi-agency Anti-Money Laundering and Counterterrorism Financing (AML/CTF) Task Force in Western Visayas, presented the platform, known as Harbor, during a news briefing on its digitalization push and its crackdown on investment scams and online lending complaints.

Harbor, short for the Hierarchical and Applicable Relations and Beneficial Ownership Registry, is the SEC’s online system for filing beneficial ownership information.

It is designed to identify the individuals who ultimately own or control a corporation, helping regulators detect layering schemes that obscure ownership, evade nationality restrictions, or conceal illicit activity.

Joel Lenaming, Securities Counsel I of SEC-Iloilo, said the registry lets investigators look past a company’s listed officers and trace the real party in interest.

“Harbor is a separate registry. When you enter the name of a corporation, you can identify its beneficial owner. If the beneficial owner is a suspicious foreign national who may have misrepresented himself or herself as a naturalized Filipino, that can be investigated,” Lenaming said.

He cited an ongoing, complex investigation into a foreign national, flagged through the registry, as an example of how the tool can surface suspicious ownership arrangements. He declined to disclose details, citing the active probe.

The SEC withheld the individual’s nationality, gender, and identity because the investigation is ongoing.

The AML/CTF Task Force in Western Visayas was activated March 23 and includes representatives from the Office of the Regional Prosecutor 6, National Intelligence Coordinating Agency, Philippine National Police (PNP), National Bureau of Investigation (NBI), 3rd Infantry Division, Philippine Drug Enforcement Agency, Bureau of Customs, and SEC.

Lenaming said the SEC is central to such cases because it holds the corporate records other agencies rely on.

“We are the registrar and the repository of all records of corporations and the individuals involved in them. How can the PNP and the NBI conduct an investigation if they do not know who to investigate and only have the name of a corporation?” he said.

The registry is especially useful against corporate fronting, or nominee arrangements, in which Filipinos are listed as directors, officers, and shareholders while a foreign national controls a company’s operations, finances, and property dealings behind the scenes.

“Sometimes a foreigner comes to the Philippines and conspires with Filipinos to incorporate a company. The foreigner provides the capital and sets everything up, including the purchase of properties,” Lenaming said.

Such arrangements are prohibited under the Anti-Dummy Law, or Commonwealth Act No. 108, which penalizes the use of Filipino nominees to circumvent limits on foreign ownership. Foreign nationals are generally barred from owning land in the Philippines under the 1987 Constitution, with limited exceptions.

Lenaming warned that Filipino nominees can face criminal, civil, and administrative liability if irregularities surface, because their names appear on official records while the real owner stays hidden.

He said corporations can also be misused to conceal the identities of people behind suspicious financial activity.

“In anti-money laundering investigations, corporations can be used as vehicles. If you are a sole proprietor, your personal assets may be exposed to liabilities and are at risk. But in a corporation, there is a shield. If that is the asset, the liability is also set there. Because of that structure, individuals behind the corporation can sometimes hide more easily,” he explained.

Lenaming said the SEC is “very strict” in enforcing the beneficial ownership registry to ensure transparency, adding that the system helps authorities identify liabilities and trace individuals tied to questionable arrangements.