Describing interests: Research note
Findings
Supply side
We have reviewed the categories used to specify beneficial ownership disclosures in laws from: the British Virgin Islands (BVI), Canada, Colombia, Ghana, the Philippines, Portugal, South Africa, the United Kingdom, and Zambia. We also looked at disclosure requirements for Chile’s Procurement Register, the EU Anti-Money Laundering Regulations (AMLR), the FATF Recommendations and supporting Guidance for legal entities and arrangements, and the OECD’s Common Reporting Standard (CRS). [2]
Across all these case studies, we find that there is little standardisation in types of interest stipulated for disclosure either in the guidance produced by different international organisations or in how these are defined in legislation across countries.
At the international level, interests are defined most concisely in the case of the OECD’s CRS, which uses only the framework of control (and beneficial owners are known as “controlling persons”) and sets out a hierarchy of interests from: “control by ownership” to “control by other means”, and “control by senior management”. Disclosure of individuals in a later category is only required where no individuals have been identified in a prior category. The CRS sets out specific categories for controllers of trusts or similar legal arrangements that include settlors, trustees, and beneficiaries.
In the EU’s AMLR, a wider range of interest categories are defined and include beneficial ownership through different types of “ownership interest” and “control”. This includes voting rights and also forms of benefit, such as “rights to a share of profits, other internal resources or liquidation balance”. However, it is the FATF Guidance which is the most wide-ranging in terms of providing different interest types; we were able to identify at least 24 different types. This includes various examples of control, especially applicable to legal vehicles that have no ownership shares, or exhibit particular characteristics in their ownership structures which mean that ownership disclosure thresholds are difficult to apply. This category includes things like an individual who “has the right to exercise (or actually exercises) significant influence over the running of the activities of the foundation”. Though the FATF Guidance stipulates a broad range of interest types, it also encourages jurisdictions to extend this number in line with the local framework, and states: “Countries should consider various types of ownership interests and ways to exercise control over a legal person that exists within their jurisdiction, pursuant to commercial and administrative law”.
Given the influence of the FATF Guidance, and the encouragement it contains to incorporate other applicable interest categories in each jurisdiction, it is perhaps unsurprising that we find a significant applicable interest categories in each jurisdiction, it is perhaps unsurprising that we find a significant degree of variation in how interests are defined at the country level. In examining beneficial ownership disclosure legislation from ten countries – selected to include a range of geographical regions – we found that most contained interest types related to:
- ownership of shares;
- voting rights; and
- some aspect of control.
Beyond this, however, the selected countries had a high degree of diversity in legislative definitions of beneficial ownership, with most containing at least one type of interest not found in other countries in our sample. For example, the BVI has the interest category of a “creditor who appoints the receiver” of an insolvent firm; Canada has the category “an individual to whom [undetermined] prescribed circumstances apply”; Colombia has a “conditional beneficiary” of both legal entities and arrangements; and Ghana has individuals who have the right to change the company’s business plan. For trusts and other legal arrangements, there is a particularly high level of diversity in definitions due to the varied ways that such arrangements are composed across the world. Given that we continued to find new interest types throughout our review, there are likely many more types in the legislation of countries not covered within our small sample.
When seeking to map legislative categories of beneficial owners to the interest types currently available within the BODS codelist, we encountered several challenges. In particular, the use of compound categories in legislation is problematic, as these do not easily map to a single, distinct interest. For instance, legislation in the Philippines contains the following category of beneficial owner: “[a] Natural person(s) who exercise control over the reporting corporation, alone or together with others, through any contract, understanding, relationship, intermediary or tiered entity”. On a disclosure form in the Philippines, a person could be declared as being a beneficial owner for having met the above condition, but users would not know whether it is because this person exercises control individually or in combination with others, or indeed whether they do so via formal, informal, or indirect means. [3]
Moreover, several jurisdictions contain provisions regarding interests in a company where share ownership may be split between different family members, but where all these individuals would be disclosable if they collectively possess shares over the given threshold. This cannot be easily represented by an interest in the existing codelist, and would need to be entered as either “rights granted by contract”, “shareholding”, or “beneficiary of a legal arrangement”, none of which accurately reflects the familial nature of the relationships and aggregate shareholding. Similarly, the codelist does not currently cater well to other forms of interest found in our legislative review, such as interests associated with partners in a partnership, liquidators, executors, rights to appoint a CEO (but not the board), rights to a substantial benefit (that is not profit), or control over the shares of a firm, but without ownership.
Notably, the way that BODS provides for people to be listed as beneficial owners is independent of type of interest. For example, in line with international standards, many countries explicitly state in their legislation that nominee shareholders cannot be named as beneficial owners; it must be the nominator – the person behind the nominee arrangement – who is disclosed. [4] BODS can represent that a person is a beneficial owner and has nominated a third party as a nominee shareholder. In a different regime, where a nominee must disclose themselves as a beneficial owner alongside their status as a nominee shareholder, this can also be represented in BODS data. This flexibility of BODS extends to being able to represent that a person is a beneficial owner, but the nature of their interests in the subject is unknown.
Demand
A standardised model for representing interests can be useful for a number of reasons, each addressed below.
Communication and visualisation
Data from multiple sources can be represented to users in a consistent manner without requiring users to understand each local category of beneficial owner.
For example, drawing on a common codelist, tools like the BODS visualisation library can visually indicate ownership vs. control interests, or can use common nomenclature to describe interests originally captured under different legal systems. [5] Search and filtering interfaces may want to apply common and concise nomenclature around ownership, control, and other interests.
Interoperability
When it is possible to uniquely map the categories of beneficial owner handled by a given system (a central register, a bank’s know-your-customer (KYC) platform, etc.) to BODS interests, then it becomes possible for systems to import BODS data without additional manual labour. This can support use cases such as:
- companies holding their own structured beneficial ownership data, and providing this to multiple registers or systems (e.g. a bank’s KYC systems); and
- a procurement system sold across multiple countries being able to integrate beneficial ownership data more easily.
Querying
A common codelist allows users consuming data from multiple systems to filter it by, for example, selecting only control-based relationships, or selecting only relationships that have been declared to involve powers to appoint or dismiss staff.
Shaping implementation
We have evidence that BODS is currently used by governments, software providers, or civil society advocates as a reference point for thinking about the different kinds of interests that researchers should look for, that systems should allow declaration of, or that policy should cover:
In our use case for Malaysia, a long list of interest type definitions by BODS is helpful in having some sort authoritative reference/standard and guidance for civil society and journalists in determining whether a government entity has actual control over subsidiaries of private companies, and who is the ultimate person in control of that government entity. [6]
Footnotes
[2] European Union, “Regulation (EU) 2024/1624 of the European Parliament and of the Council”, 31 May 2024, https://eur-lex.europa.eu/eli/reg/2024/1624/oj; FATF Recommendations: FATF, International Standards on Combating Money Laundering and the Financing of Terrorism & Proliferation: The FATF Recommendations (FATF, updated 2025), https://www.fatf-gafi.org/content/dam/fatf-gafi/recommendations/FATF%20Recommendations%202012.pdf.coredownload.inline.pdf; FATF, Beneficial Ownership of Legal Persons (FATF, March 2023), https://www.fatf-gafi.org/content/dam/fatf-gafi/guidance/Guidance-Beneficial-Ownership-Legal-Persons.pdf.coredownload.pdf; FATF, Beneficial Ownership and Transparency of Legal Arrangements (FATF, March 2024), https://www.fatf-gafi.org/content/dam/fatf-gafi/recommendations/Guidance-Beneficial-Ownership-Transparency-Legal-Arrangements.pdf.coredownload.inline.pdf; OECD, Standard for Automatic Exchange of Financial Information in Tax Matters - Implementation Handbook - Second Edition (OECD, Paris, 2018), https://www.oecd.org/content/dam/oecd/en/publications/reports/2018/03/standard-for-automatic-exchange-of-financial-information-in-tax-matters-implementation-handbook-second-edition_a52535ec/841e9512-en.pdf. See this workbook for an overview: Open Ownership, “Interest Modelling - Codelist Exploration”, https://docs.google.com/spreadsheets/d/1oc2xvSdInsVFjpiv_dvzwibTIi7SGkSWvyQkAI36iBQ/edit.
[3] Note: this type of compound definition reflects language in the FATF Guidance, which states: “Shareholders may exercise control on the company based on their ownership alone or together with other shareholders, including through any contract, understanding, relationship, intermediary or tiered entity”: FATF, Beneficial Ownership of Legal Persons, 18.
[4] See the Glossary of FATF, The FATF Recommendations, 133.
[5] See: Open Ownership, “Beneficial Ownership Data Standard visualisation library”, https://www.openownership.org/en/publications/beneficial-ownership-data-standard-visualisation-library/.
[6] Khairil Yusof, Sinar Project. See: GitHub, “Feature: Interest modelling #466", comment from @kaerumy on 25 September 2024, https://github.com/openownership/data-standard/issues/466#issuecomment-2373967414.