Implementation of COSP Resolution 10/6 on Enhancing the Use of Beneficial Ownership Information to Strengthen Asset Recovery

Beneficial ownership reform in Zambia

A participatory, inclusive and adaptive approach to beneficial ownership transparency implementation

Zambia’s case provides a valuable example of how domestic priorities, combined with international assessments, can generate substantial momentum for action, resulting in significant legal and institutional advancements. This study examines how Zambia is addressing issues related to the access, verification and use of BO data in investigations.

Policy drivers of beneficial ownership transparency reform

Corruption has been a significant challenge in Zambia, and the misuse of companies to facilitate IFFs, including money laundering, procurement fraud and tax evasion, has contributed to the prevalence of corruption in the country. According to the Financial Intelligence Centre’s (FIC) 2022 Trends Report, ZMW 5.97 billion (approximately USD 223 million) in suspicious transaction reports were linked to the abuse of opaque ownership structures. Zambia recognizes the need for transparency in company ownership as a means to reduce corruption and tackle IFFs to support domestic resource mobilization. These have been primary drivers of BOT reform in the country. Zambia began tackling this challenge with the passing of the Companies Act in 2017. Subsequently, further revisions to this law have taken place to address implementation challenges.

A key driver for continued investment in and improvement of BO reform in Zambia is the need to improve timely access to accurate, adequate and up-to-date BO data for investigators. Over 80 per cent of financial crime investigators rely on BO data for investigations, yet 85 per cent of investigators still access this information manually. [4] At the time of the FIC study, investigators often faced delays of up to two weeks in accessing BO data, which hindered time-sensitive investigations. Since then, Zambia has made progress in reducing turnaround times to under a week, and plans are underway to introduce an Application Programming Interface that will allow real-time information exchange. The demand for timely access to BO data, particularly for competent authorities, is also a critical element of Recommendations 24 and 25 of the FATF, and this has created a strong motivation for digitizing the BO register.

A second driver of continued efforts to improve the effectiveness of reforms is the need to strengthen compliance with BO disclosure requirements. Zambia’s compliance rate for BO disclosure remains low, with only about 38 per cent of companies submitting BO information. This is a result of a combination of factors, including lack of adequate sensitization and awareness among declaring companies and complexity in the forms used to declare BO information. However, government officials note that this figure relates primarily to companies incorporated before the operationalization of the Companies Act of 2017. For companies incorporated after 2017, compliance stands at 100 per cent, since no company can be registered without declaring BO information. The Patents and Companies Registration Agency (PACRA), the lead implementing agency, has drawn valuable lessons from its implementation journey, and as part of its efforts to strengthen compliance, is revising the Companies Act of 2017 and the Beneficial Ownership Regulations (Statutory Instrument). These reforms aim on one hand to improve the data collection forms and, on the other, to strengthen enforcement by introducing administrative penalties and empowering the Registrar to strike off non-compliant companies after six months.

Another key driver is the issue of citizens being declared as company owners when, in reality, ownership lies with foreigners, which is against Zambian law. For example, in public procurement, regulations require a minimum level of citizen participation in bidding companies, yet in practice, Zambian citizens are often used as “fronts” while undisclosed non-citizens exercise real control. Similarly, in land administration, the law mandates a specified threshold of citizen shareholding to own land. However, investigations have revealed several instances where citizens are listed only on paper, while foreign individuals ultimately control the land through opaque structures. This has been an important driver of BOT reform, reflected in legislation requiring BO disclosure in procurement.

Zambia’s BOT reform agenda is also motivated by the need to align with regional and international standards, including assessments by the Eastern and Southern Africa Anti-Money Laundering Group and the risks associated with being greylisted by FATF. Zambia’s experience demonstrates how the needs of domestic law enforcement agencies and the drive to improve compliance, enhance domestic resource mobilization, and meet international obligations are driving BO reforms that are designed to fulfill clear domestic policy goals.

This section outlines key features of Zambia’s approach that are helping deliver effective policy implementation:

1. Incorporating an inclusive and adaptive legal reform process

Zambia has employed a multistakeholder approach to developing its legal framework for BOT, consulting widely with users and providers of BO data, including the private sector and civil society actors, to ensure that reforms are grounded in user needs and address enforcement gaps. This approach has supported Zambia’s efforts to address initial implementation challenges, particularly those related to compliance, accuracy and enforcement. For example, Zambia is currently reviewing its Companies (Amendment) Bill, 2025, which incorporates several compliance-focused reforms aimed at strengthening enforcement, enhancing data quality and ensuring a sustainable impact.

This bill seeks to make specific amendments in response to implementation challenges that have come to light through Zambia’s eight years of experience advancing BOT reforms:

• Stronger sanctions to incentivize higher compliance: Companies that fail to submit, update or verify BO information may face daily administrative penalties and, ultimately, de-registration (Sections 21A, 317 and 369A).
• Improved discrepancy reporting mechanisms to increase the accuracy of BO data: Competent authorities and reporting entities must report discrepancies between BO data held by companies and independently sourced information within 15 days (Section 346B). PACRA is empowered to request clarification, and failure to respond can result in escalating penalties and enforcement actions.
• More detail on ownership relationships to facilitate better use of data: The amendments update the legal definition of a beneficial owner to include those who directly or indirectly control more than 5 per cent of a company’s shares or voting rights (Section 3). They also require full disclosure of nominee relationships (Sections 30 and 31) and ban the use of bearer shares and share warrants (Section 157A).

These legal reforms are complemented by executive policy action in specific areas, such as public procurement. In August 2024, the Secretary to the Treasury issued a circular requiring all legal persons bidding for public contracts to submit certified, accurate and up-to-date BO information. Through this combined legal and policy approach, Zambia is positioning itself as a reformer that tests, learns and adapts.

2. Strengthening coordination to enable use of BO information

Zambia is strengthening institutional coordination to ensure that BO information is effectively used. Examples of this include:

• Formalized inter-agency collaboration: The FIC and PACRA have a Memorandum of Understanding to regularly share BO data for investigative purposes.
• Inter-agency cooperation framework to support data use: Zambia established the Inter-Agency Framework on Collaboration and Cooperation, which brings together law enforcement agencies and relevant government institutions to facilitate coordinated action against IFFs and related activities. Within this framework, member agencies, including PACRA, share information in line with their respective mandates. PACRA provides access to BO information, which is used by law enforcement and intelligence agencies for investigations and decision-making. This mechanism enables the use of BO data and supports coordinated asset recovery efforts.
• Establishing a BO Unit to improve quality and use of data: Zambia plans to establish a dedicated Beneficial Ownership Unit within PACRA to oversee verification efforts, ensure compliance, facilitate cross-agency coordination and manage stakeholders.

These efforts are building a more connected institutional framework for using BO data as a tool for accountability and financial integrity.

3. Adopting a user-centered approach to implementing BO reforms

Zambia has recognized the importance of moving to a fully digitized BO registry to collect high-quality BO data and ensure it is available and usable to actors who need it. PACRA is leading this effort and is taking a user-centered approach to designing its future digital BO register.

PACRA conducted a comprehensive review of existing IT systems and user needs, incorporating consultations with investigators, regulators and businesses to inform the development of the register. Placing users at the center of registry development ensures that the registry is well-tailored to meet user needs, which will help improve data quality, enhance access and increase compliance through more accurate and reliable reporting. PACRA is actively exploring partnerships and mobilizing resources to support the full development and rollout of the register.

Outcomes and policy impact

Zambia is beginning to see early results from its flexible, user-informed and coordinated approach to BO reforms:

• Strengthened institutional coordination on the use of BO data through the establishment of the Inter-Agency Framework on Collaboration and Cooperation
• An improved understanding of user needs shaping the design of Zambia’s future digital BO register to enhance data quality, accessibility and compliance
• Integration of BO requirements into procurement systems, with Treasury policy circulars now requiring enhanced BO verification in public contracting processes

Most significantly, there is clear evidence that the above is enabling BO data to support asset recovery, led by Zambia’s Inter-Agency Framework on Collaboration and Cooperation.

In one case, authorities used BO data to trace and seize assets allegedly purchased with misappropriated public funds. BO information helped uncover hidden ownership structures in an alleged procurement corruption case, leading to the seizure of two helicopters. (See case study below.)

The outcomes of Zambia’s adaptive, iterative reform approach, grounded in institutional coordination and shaped by both domestic priorities and learning from other jurisdictions, underscore the effectiveness of the country’s approach to BO reforms. Looking forward, Zambia seeks to continue to apply BO data in asset recovery efforts and further domestic revenue mobilization and anti-corruption objectives.

Conclusion and next steps

Zambia is adopting a flexible, user-informed and coordinated approach to advance the implementation of BO transparency. By leveraging existing structures, such as the Inter-Agency Framework on Cooperation and Collaboration, to facilitate BO data use without creating multiple overlapping systems, the Zambian case demonstrates the value of coordination, learning and adapting, and employing a whole-of-government approach to achieve policy goals. Two critical next steps will be key to sustaining momentum:

1. The enactment of amendments to the Companies Act, which will further strengthen the legal foundation for BO implementation
2. The consistent and structured use of the inter-agency collaboration framework to guide the development of the BO register and other reform components

Together, these steps will reinforce Zambia’s trajectory toward a more transparent and effective BO regime.

Footnotes

[4] Zambia Financial Intelligence Centre, “A study on the availability and access to BO information for law enforcement investigations in Zambia,” 2024.

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