Why is beneficial ownership transparency (BOT) a powerful tool to counter corruption? An event on the margins of the 14th session of the Implementation Review Group (IRG) in June 2023 co-organized by Open Ownership and the UNCAC Coalition and supported by Norway discussed the importance and need to strengthen beneficial ownership transparency and actions at the upcoming CoSP to advance BOT globally.
Betzy Marie Ellingsen Tunold, Policy Director at the Department for Partnership and Development Policy Analysis, Ministry of Foreign Affairs, Norway, reported on the advances made by Norway in establishing publicly accessible beneficial ownership registers. The BOT agenda has gained significant momentum over the past decade. Beneficial ownership transparency is a part of the solution to transnational and grand corruption and is a key measure to tackle corruption risks in areas such as public procurement and political party financing. Despite the obvious benefits of making beneficial ownership information public, the establishment of BO registers has seen mixed success. In accordance with the Norwegian Act on Beneficial Ownership that was passed in 2019, Norway has introduced central registers of beneficial owners with up-to-date information that are accessible to all citizens. The Norwegian BOT law is short and focused, contains all relevant information and may be consulted by others.
Thom Townsend, Executive Director, Open Ownership, reflected on the current state of implementation of beneficial ownership transparency and the lessons learned so far. There has been mixed success in the implementation of beneficial ownership transparency because it is “hard and new”. Taking a look back at progress from the mid-2010s to now, there has been an enormous momentum for BOT and acceptance by the international community. It is important to sustain support to countries after the phase of implementation. To push forward the BOT agenda, the next CoSP should focus on harmonization, making sure all departments of the governments have access to this information and that the information is made public in a way that will be useful to civil society organizations, the media and others.
Xolisile Khanyile, Director of the Financial Intelligence Center (FIC), Government of South Africa, reported on how BO data has been put to use to recover proceeds of crime in South Africa. While there had always been registers, the Inter-Departmental Committee on Beneficial Ownership formed by the Government of South Africa established new updated BO registers. By collaborating with the police through an intelligence-led multi-agency approach and building public-private partnerships with banks, the FIC was successful in recovering proceeds of crime, for instance by seizing 22 million dollars hidden behind a number of companies in a case around Covid-19 protective equipment.
Kristen Robinson, Head of Advocacy, Open Contracting Partnership (OCP), highlighted the links between beneficial ownership transparency and public procurement. OCP supported the Nigerian NGO Dataphyte, an interactive initiative for social impact to create community civic monitors which, by connecting procurement and BO data, was able to uncover that education funding was not going where it should go and report to the government. This impact story demonstrates how different registers can be brought together to uphold integrity and maximize social value. Thinking holistically and connecting different datasets further leads to progress in ensuring national security, supplier competition and optimal quality and value for money.
Kirbee Tibayan, National Programme Officer Anti-Corruption, UNODC, presented the findings from UNODC’s comparative study on various beneficial ownership regimes. There is a lack of harmony in the definition of BO. Privacy laws in many cases are a hindrance to making BO registers public. In terms of striking the balance between transparency and privacy concerns, it should be noted that different countries have different privacy concerns and different cultures determining how much they value privacy and different laws. Another challenge relates to the lack of political will to prioritize beneficial ownership transparency. We have to understand the priorities of countries with regard to BOT; for a majority of the developing countries, the motivation to get out of the FATF grey lists is driving BOT efforts. One of the biggest challenges in Southeast Asia is ensuring the reliability of BO data as compiling this information from various sources can be complex. Further challenges relate to international cooperation in investigations, building technical capacities, and allocating adequate resources for implementing BO registers. Finally, more needs to be done to generate public awareness and engage CSOs, media and citizens to promote BOT.