Developing the world's first transnational open beneficial ownership register: A brief history of the Open Ownership Register
Background
A beneficial owner is a person who ultimately has the right to some share of a corporate entity’s income or assets, or the ability to control its activities. Often, the ownership structure of companies and other corporate vehicles, such as trusts, can be complex and opaque. This means that the individuals who own, control, or benefit from corporate vehicles can remain hidden.
Beneficial ownership transparency (BOT) refers to authorities putting in place requirements for corporate vehicles to collect and disclose information about their beneficial owners in a register. Increasingly, governments collate this information in central registers and make it available to a range of actors, including law enforcement, procurement agencies, tax authorities, the private sector, and civil society.
Seventy percent of grand corruption cases from recent decades have involved anonymously owned companies. In this context, the value of beneficial ownership information (BOI) as an anti-corruption and anti-money laundering tool has been recognised by international standard-setting bodies such as the Financial Action Task Force (FATF) and the Organisation for Economic Co-operation and Development (OECD).
The past decade has seen exponential growth in the number of states committing to support the collection and use of BOI for a number of aims, including promoting a healthy business environment, protecting national security, and combatting financial crime, money laundering, tax evasion, and corruption.
In 2013, the UK became the first country in the world to commit to making BOI transparent, as part of measures to tackle economic crime and corruption. In April 2016, the UK launched the People with Significant Control (PSC) register, making it the first country in the G20 to create a public register of the beneficial owners of companies.
One month later, the UK government hosted an International Anti-Corruption Summit in London, securing solid commitments from many of the 43 attending countries with the official communique calling for “firm collective action on increasing beneficial ownership transparency”.
There was a clear need to take a globally focused, transparent approach to collecting and publishing BO data to tackle issues linked to anonymous companies. Thanks to funding from the UK’s Department for International Development, which has since been replaced by the Foreign, Commonwealth & Development Office, a small team started work on Open Ownership’s first project: the OO Register.