Early impacts of public beneficial ownership registers: Ukraine

Publication type
Case study

Publication

Country focus
Ukraine

Sections
Impact

Open Ownership Principles
Public access

Summary

In 2015, Ukraine became the first country in the world to launch a public register of the beneficial owners of corporate entities registered in the country. This report provides an overview of the register’s origins and evolution, then explores its impact. It finds that Ukraine’s open register has enabled organisations outside the government to evaluate the quality of the register’s data, to reach insights that support the country’s anti-corruption agenda, to add value for the private sector, and to provide greater oversight of the extractive industry.

Ukraine’s experience also exemplifies the importance of making beneficial ownership data public, in line with the recommendation set out in the Open Ownership Principles for Effective Beneficial Ownership Disclosure. Public access is key for widespread third-party use of data beyond authorities, which, as Ukraine’s experience shows, can help drive up data quality and increase impact.

Public data, despite its accuracy limitations, can help anti-corruption activists shine light on relationships and pathways of influence. Further work on verification will help to ensure that Ukraine’s register, the Unified State Register of Legal Entities, Individual Entrepreneurs, and Civic Formations, is a better reflection of the true nature of ownership and control in Ukraine’s economy.

Key messages

  • Ukraine’s experience demonstrates that an iterative approach to legislation and implementation can strengthen and expand a beneficial ownership transparency regime over time. A recent round of reforms requires reporting entities to resubmit their beneficial ownership information by July 2022, and publicly listed companies are no longer exempt. Companies must now provide identification documents for beneficial owners and details about all persons who directly or indirectly own a legal entity.
  • Civil society can play an active role in auditing beneficial ownership data quality. A civil society organisation in Ukraine called the Anti-Corruption Action Centre found that, as of 2019, fewer than one in four companies had submitted the required information about their beneficial owners. Of those that did, 22% named a legal entity or said a beneficial owner was absent or impossible to identify.
  • Work by organisations fighting corruption in Ukraine has shown that it is often the integration of multiple public datasets that deliver greatest value and impact, for example, combining beneficial ownership data with data on politically exposed persons.
  • Anti-corruption analyses using Ukrainian beneficial ownership data show how 100% accurate beneficial ownership data is not always required in order to establish enough relatedness between entities to suggest that they are not independent of one another and merit investigation.
  • At the same time, significant quality issues in Ukraine’s beneficial ownership platform and data show how these issues limit the data’s utility. Momentum on full implementation and verification of beneficial ownership data must be sustained if Ukraine’s ambitious commitment to beneficial ownership transparency is to deliver its intended policy impact.
  • In Ukraine, as in other countries, a whole-of-economy central register meets the requirements of the Extractive Industries Transparency Initiative Standard, though in the future it will include more rigorous disclosure criteria and better verification. When beneficial ownership data is structured and interoperable, it is easier to verify, and a greater range of verification mechanisms can be used.
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