Anti-Corruption

Draft and implement legislation and regulations that mandate the collection and publication of company beneficial ownership information, particularly through a central register.

• Work with civil society, the private sector, data users, and other key actors to set the parameters of this legislation, especially if taking a phased approach by focusing on a specific industry or companies bidding for public procurement.
  • Consider including specific definitions for different kinds of beneficial ownership. Beyond company beneficial ownership, multiple legal vehicles (such as trusts) are used to disguise beneficial owners. The OGP Support Unit’s Global Report provides additional details on how to address risks associated with non-company beneficial ownership.
  • Targeting specific industries is especially relevant for extractive industries such as mining. The Extractive Industries Transparency Initiative (EITI) highlights how company beneficial ownership transparency applies in oil, gas, and mining. EITI also requires member countries to ensure extractive industry companies disclose their beneficial owners in its standard. Indonesia’s efforts to disclose beneficial ownership data in this sector provides an example.
• Create clear reporting requirements, such as specifying clear thresholds for defining company beneficial ownership and mandating regular updates.
  • Consider the following strategies to ensure clarity: adopt a clear definition of beneficial ownership in law, specify how and when beneficial ownership should be disclosed, and ensure all changes to beneficial ownership information are reported.
• Include provisions for maintaining and funding the central register in the law to ensure it remains functional over time.
• Make information publicly available. Ensure that the legal framework requires that beneficial ownership data is publicly available and free of charge.
  • Adopt clear regulations on who should have access to which data based on the public interest. Make publicly available a subset of information on company beneficial ownership that is sufficient for users to understand and make use of the data. The fields of information that are made publicly available should be sufficient for users to analyze and use the data, but certain fields (like a home address) may typically be excluded from the public dataset and only made available to certain authorities (such as law enforcement and financial institutions). Open Ownership provides details on how to balance privacy and public interest in this long read.

Data should be of high quality, including validated identifying information on the company beneficial owners (name and address) and the nature and size of the interest they hold in a company. Successful examples of countries that have published such data include Armenia, Nigeria, Ukraine, and the United Kingdom.

Use common identifiers across datasets related to beneficial ownership to ensure that data in different databases can be used together, which increases accountability. Interoperable data is crucial to identify corruption (such as money laundering), rights violations (such as harmful labor practices), and other illegal activities (such as polluting the environment).

• Implement an international standard to allow for cross-country comparison, such as the Beneficial Ownership Data Standard (BODS) created by Open Ownership.
• Make company beneficial ownership data interoperable with other datasets, such as those related to public procurement, political finance, and lobbying.

Provide tailored training for different actors, including government officials (such as law enforcement officials, prosecutors, and judges) and members of the public (such as civil society organizations and journalists). This is necessary to create a baseline understanding of what company beneficial ownership data is, why it matters, and how to use it to combat corruption, rights violations, and other issues.

Consult those using the data (especially researchers and journalists) in an advisory capacity to ensure data is useful and usable.

Provide training for public officials and non-government actors (such as CSOs, journalists, and researchers) on how to interpret and use company beneficial ownership data to prevent and detect corruption, fraud, and other illegal activities.

Improve data accuracy by validating data at the point of submission, verifying information (including making use of other government data sources), and forwarding suspicious cases for investigation.

• Create avenues for civil society to provide feedback on the accuracy and reliability of the data. This can include applying data analytics to find patterns, identify anomalies and red flags, and create alerts.

Require the use of beneficial ownership data in central registers for due diligence reporting.

• Newer requirements related to data screening apply to screening public contract recipients and license applications for extractive industries, as well as vetting whether corporate owners of real estate are following disclosure requirements.
• Anti-money laundering regulations, like “know-your-customer” verification processes for financial and non-financial entities that can enable corruption, are another example. Specifically, the Financial Action Task Force and other experts have begun to argue that regulating enabling activities—such as preparing taxes, selling real estate, managing wealth and investment portfolios, and providing legal services to create shell companies—is more effective than regulating professions.

Establish and enforce sanctions for making false or incomplete data submissions, and empower watchdog organizations and other public agencies (such as procurement offices) to trigger corrections and investigations.