Beneficial Ownership Registry (NO0061)

• What’s in the 2019 Action PlansBeneficial Ownership Register (August 1, 2020)

Establish public register of the beneficial owners
Responsible body Ministry of Finance
Description
What problem for the general public
is the commitment aimed to solve?
Lack of knowledge and the scarcity of available
information on the beneficial owners and ownership
structures of companies and enterprises in Norway
increases, among other things, the risk of misuse
for the purpose of corruption and economic crime,
including evasion and money laundering.
What is the commitment? Establish a publicly available register of beneficial
owners.
How will the commitment contribute
to solving the problem?
Increased transparency regarding the ownership and
control of companies and enterprises in Norway will
counteract the risk of misuse of the companies etc.
for the purpose of corruption and economic crime
by weakening the companies’ opportunity to conceal
ownership and transactions.
How is this commitment relevant to
the OGP’s fundamental values?
Release of more information
Improves the quality of the available information
Improves the availability of information, which makes
it easier for the general public to get a hold of it
Additional information The initiative is relevant to the UN Sustainable
Development Goal 16, Section 4.
Milestones Start date End date
Contact information
Person responsible from the
implementing body
Tobias Brynildsen
Entity Ministry of Finance
E-mail/Telephone tobias.brynildsen@fin.dep.no / +47 22 24 45 68
Other public participants Ministry of Trade, Industry and Fisheries
– Christian Gløersen: cgl@nfd.dep.no / +47 22 24 65 56
Collaborative civil society
organisations, cross-sectoral
working groups, etc.

8. Establish public register of the beneficial owners

Main Objective

"Establish a publicly available register of beneficial owners. Increased transparency regarding the ownership and control of companies and enterprises in Norway will counteract the risk of misuse of the companies etc. for the purpose of corruption and economic crime by weakening the companies' opportunity to conceal ownership and transactions."

Milestones

No milestones provided

Editorial Note: For the complete text of this commitment, please see Norway's action plan at https://www.regjeringen.no/en/dokumenter/norges-handlingsplan-4---open-government-partnership-ogp/id2638814/

Commitment Analysis
This commitment aims to establish a publicly available register about the ultimate owners (UBO) of companies registered in Norway. It continues from a commitment in the third action plan (2016-2018) which resulted in proposals for the UBO register. In June 2018, the government submitted a law proposal [42] to Parliament, which was up for consideration in the parliamentary finance committee by the end of the third action plan period. [43] In March 2019, Parliament passed the Beneficial Ownership Act, mandating a publicly accessible register in user-friendly format.

This commitment is relevant to the OGP value of access to information, and is important in terms of fighting money laundering, tax evasion, and economic crime. While the establishment of a publicly available beneficial ownership register is verifiable, the commitment does not provide details on how it will be created, or the characteristics and functionalities of the new register. According to a representative from the Ministry of Finance, the ministry will commission a government agency to develop the technical solution of the register, while the ministry will issue regulations. [44]

If successfully established, the public UBO register could significantly improve the transparency and access to information on beneficial ownership in Norway and would fulfill a major long-term priority for civil society in Norway. [45] However, Norwegian civil society has criticised the Beneficial Ownership Act as only shareholders holding more than 25 percent of the shares would be obliged to register, and foreign trusts with indirect ownership in Norwegian companies will not be listed. [46]

The Beneficial Ownership Act is currently awaiting supplementary regulations concerning the location of the register as well as technical details for accessing its information. [47] To maximise the impact of the future UBO register, the IRM recommends the following next steps:

• Ensure that data is published in open format and use the Beneficial Ownership Data Standard (developed by Open Ownership) to maximise the interoperability of the information and meet global norms. [48]
• Introduce mechanisms to verify the accuracy of the information presented on the UBO register. Several OGP members, such as Denmark and Slovakia, have already developed verification mechanisms for their beneficial ownership registers. [49]

Commitment 8. Establishment of public register of beneficial ownership

· Verifiable: Yes

· Relevant: Access to information

· Potential impact: Transformative

· Completion: Substantial

· Did it open government? Marginal

Context and Objectives

Building on an initiative carried out as part of the third Norwegian OGP action plan, [43] this commitment seeks to establish a UBO Register of Norwegian companies. [44] The IRM Design Report [45] assessed this commitment as potentially transformative, as the establishment of a UBO Register would respond to key priorities of Norwegian civil society and help enhance transparency, access to information, and (in the long term) strengthen anti–money laundering and anti-corruption efforts. This commitment was updated in the amended action plan to include targeted milestones, [46] providing additional information about steps towards the register’s establishment.

The Norwegian Parliament passed a Beneficial Ownership Act [47] in March 2019. The Act mandates the establishment of a UBO Register accessible to the public, in line with the requirements of the fourth EU Anti–Money Laundering Directives (AMLDs). [48] The Act was followed by an implementing regulation, which was adopted in 2020 following public consultation and entered into force in 2021. [49] The regulation clarifies the scope of the Act and better defines the obligations of UBOs, including exemptions. It also outlines the technical features of the register itself, whose development is the responsibility of the Brønnøysund Register Centre, [50] a governmental agency responsible for the management of several of the country’s public registers, including the Register of Business Enterprises.

Did It Open Government? Marginal

Upon completion of the action plan, this commitment was on track to yield promising early results.

An interviewed representative of the Brønnøysund Register Centre explained that the Centre was initially tasked by the Ministry of Trade and Fisheries in 2018 to deliver a definition of the UBO Register’s scope, including the type of technical solution, milestones for implementation, and budgetary implications. [51] This scope was developed in line with what were at the time the contents of the draft Act. The contents of the adopted Act, which entered into force in 2019, and of the 2021 implementing regulation, however further expanded the scope of the register to better align it to EU AMLDs. This expansion had implications for the register’s development. Accordingly, the development of the technical solutions was split into three phases:

· Phase 1. In this phase, the register would include information about the owner’s name, Norwegian identification number or date and year of birth, citizenship and country of residence of the UBO, the type of ownership control, and whether there is indirect ownership. [52] Phase 1 would be ready for launch on 2 January 2023. This solution coincided with the scope of the register originally agreed upon with the Brønnøysund Register Centre and was the only phase for which funding was available.

· Phase 2. In this phase, the scope of the register would be expanded to include more information about indirect ownership, including implementation of a solution to report information about the entities through which the UBO’s control is held. This phase would also include mechanisms to report information about discrepancies in the UBO information registered and the opportunity to follow up with relevant entities concerning fines for a UBO’s failure to register information. This phase is expected to be implemented throughout 2023.

· Phase 3. In this phase, the register would be connected to the EU Beneficial Ownership Register Interconnection System. This phase was expected to be implemented throughout 2024.

Interviewees from the Brønnøysund Register Centre [53] and Tax Justice Network Norway, [54] a CSO that has closely followed the development of the UBO Register, confirmed that all verification mechanisms (e.g., automated reminder messages, warnings for non-submission) are planned for Phase 2. Targeted guidance will be provided during the submission process for entering the information. A mechanism should be in place to allow cross-checking of data from other government sources and preventing submission of data that violate or are in logical opposition to other information already in the register. Similarly, non-legal entries (e.g., declaration of ownership above 100%) will not be accepted, and there will be no open-text field on the e‑form for submission except for one on “other types of control.” Chat support is also expected to be activated. [55]

The Brønnøysund Register Centre interviewee further explained that two types of access would be possible:

· One for governmental and financial institutions, which would be able to see the Norwegian UBO identification number, exempted beneficial owners, and information about misregistration

· One for members of the public, who will be able to access information about ownership; share of ownership; and voting rights only, including the list of people with the right to appoint or remove more than half of the company’s board members, free of charge [56]

The representative from Tax Justice Network Norway stated that access to the public, with plans to make data available for at no cost and in structured, open data format, is in line with EU standards and that overall, if the register is launched with all planned functionality, it would be a high-quality solution. [57] The Centre representative confirmed that it is currently cooperating with civil society outside the framework of OGP to prepare the guidelines for using the register and completing the necessary information about UBOs. Selected CSOs tested the solution in December 2022. [58]

The representatives of the Centre [59] and Tax Justice Network Norway [60] both confirmed that the launch of the Register is an important and needed step in the Norwegian landscape, as no other types of registers that include information about UBOs are currently available. [61] An interviewed representative of the OGP Council [62] further praised the commitment for being ambitious and relevant. All interviewed parties, however, expressed significant concerns about the government’s decision not to include financing for the next phase of the register in the its budget for next year (2023-4). Limiting the register to its Phase 1 functionality would have a serious impact on its relevance and usefulness, as Phase 2 includes all the verification mechanisms crucial to ensuring that the register serves its purpose. [63] The interviewed Tax Justice Network Norway representative further highlighted that compliance with the EU AMLDs and Financial Action Task Force 2024 recommendations will be limited until the second phase is implemented because mechanisms to ensure that information is adequate, correct, and up to date will not be available until then. [64] The IRM contacted the Ministry of Finance several times with requests for comments on the status of this commitment’s implementation, including challenges and recommendations, but received no response.

Another key challenge that interviewees identified is the existence of regulatory discrepancies between the Act on Beneficial Ownership and its implementing regulation and Norway’s Anti–Money Laundering Act. [65] Under certain circumstances, the Anti–Money Laundering Act and the Beneficial Ownership Act have different ways of identifying beneficial owners. [66] According to the interviewees, [67] these discrepancies could lead to significant issues in terms of notifications of misregistration and affect the work of banks and financial institutions in their anti–money laundering efforts. This challenge was brought to the attention of the Ministry of Finance, which was responsible for drafting both legislative acts. [68]

The register was due to be launched on 1 January 2023, but judgement in Joined Cases C-37/20 and C-601/20 of the CJEU invalidated public access to beneficial ownership information per the fifth AMLD. The Ministry of Finance announced that it would assess the consequences and significance of the judgment in Norway, with the aim of putting the necessary clarifications in place so that the register can be put into use as soon as possible and of maintaining the clear goal that the register should be established with the greatest possible transparency. [69] Opening the register to public access is currently suspended, meaning that although most internal activities have been completed as envisioned, there are currently only marginal early results with respect to openness. [70]

Looking Ahead

Following the CJEU judgement, full completion of the commitment would benefit from the Ministry of Finance stepping up its work to open the register and make it available to the public as soon as possible. Furthermore, continuation of the initiative in Phases 2 and 3 will ensure that an open register can fulfil its role as a key anti–money laundering and anti-corruption tool. Cooperation and coordination amongst the Brønnøysund Register Centre, civil society, and the Ministry of Finance to identify and implement relevant verification mechanisms and systems as well as a solution to the issue of regulatory discrepancies between the UBO Act and the Ant–Money Laundering Act are also recommended as the initiative moves forward.