Can beneficial ownership transparency really be compatible with data protection?

In recent years, we’ve seen significant progress on clamping down on the abuse of anonymous company ownership through beneficial ownership transparency, both from international bodies like the OECD, G20 and EU, and by leading governments such as the UK, Denmark, Ukraine and Slovakia. Increasingly, policymakers are recognising the benefits of being able to “follow the money” across borders and are leaving fewer places for money launderers to hide.

But as this momentum builds, so do concerns around the protection of personal data, as scandal upon scandal sweep the tech world. Beneficial ownershipDisclosing beneficial owners — those who ultimately control or profit from a business — is essential for combating corruption, stemming illicit financial flows, and fighting tax evasion. Technical... information is a different class of information than what’s described in these scandals, given that it is related to the ability of a beneficial owner to operate in a certain market (rather than provided voluntarily to a private entity). However, it’s important to ask: can we balance beneficial ownership transparencyAccording to OGP’s Articles of Governance, transparency occurs when “government-held information (including on activities and decisions) is open, comprehensive, timely, freely available to the pub... More with the principles of data protection, and if so, how?

OpenOwership is proud to be partnering with The Engine Room, a member of the responsible data community, to research this question. A responsible data approach involves assessing the unintended consequences of working with data by prioritising people’s rights to consent, privacy and security while respecting the values of transparency and openness. Through this lens, protection of the right to privacy is seen not as a barrier in the way of transparency but as a foundational element that can strengthen the community’s efforts to address corruption, fraud, organised crime and taxPlacing transparency, accountability, and participation at the center of tax policy can ensure that burdens are distributed equitably across society. Technical specifications: Commitments related to c... evasion.

We’ve also partnered with The B Team to ensure that this research directly addresses the concerns of the private sectorGovernments are working to open private sector practices as well — including through beneficial ownership transparency, open contracting, and regulating environmental standards. Technical specificat... and business owners. In a landscape of vastly different data protection regimes, what risks are companies exposing themselves to by disclosing personal data about their beneficial owners (who may or may not be located in the same jurisdiction)?

Since privacy (and by extension data protection) is essentially about individual rights, the research borrows from human rightsAn essential part of open government includes protecting the sacred freedoms and rights of all citizens, including the most vulnerable groups, and holding those who violate human rights accountable. T..., exploring three interlinked questions:

• Is publishing beneficial ownership data in central public registers lawful?
• Is publishing beneficial ownership data in central public registers an effective way of meeting a legitimate aim?
• What are the potential impacts to privacy of public beneficial ownership registers, and can they be minimised or mitigated?

As part of this work, we will be reviewing the relationship between data protection and beneficial ownership legislationCreating and passing legislation is one of the most effective ways of ensuring open government reforms have long-lasting effects on government practices. Technical specifications: Act of creating or r... in a selected set of jurisdictions, as well as analysing the broader privacy and responsible data implications for both governments and companies in  publishing ownership data publicly. Our findings will provide practical guidance to both governments implementing beneficial ownership transparency, as well as companies complying with beneficial ownership requirements.

We’re pleased to be presenting early findings from this research at the International Anti-Corruption Conference (IACC) in Copenhagen this week. If you are in a government implementing beneficial ownership transparency, we will be hosting a roundtable discussion on the implications for policymakers in partnership with OGP from 8am-10am on 23 October.

Email zosia@openownership.org to join us, or keep an eye on Twitter for the launch of the research in November.