Making central beneficial ownership registers public
The increasing number of jurisdictions implementing public BO registers, and jurisdictions making existing closed BO registers open, has resulted in significant debate, both about specific added value of making BO data public, and whether this is proportional to privacy and personal security concerns.
This briefing demonstrates that making BO registers public gives a number of user groups access that generates a range of benefits, contributing to various policy areas. In certain policy areas (such as fighting financial crime), a number of these benefits could, in a hypothetical perfect system, be achieved with closed registers.
However, recent examples show that the global architecture for fighting financial crime is far from perfect, and until a perfect system is in place, these gains can be quickly achieved with open registers. Additional policy aims, such as accountability in procurement, can only be achieved with open registers.
Whilst the body of evidence supporting the effectiveness of public registers over closed registers is still emerging, there are sufficient reasons to state that public registers serve the public interest.
Jurisdictions considering making BO data public should be aware that the potential benefits from publication will depend on how the registers are implemented. Implementing countries first need to collate data in a central register. This register should be freely accessible without barriers to access, such as fees and restrictive licensing, as these adversely affect data use. Emerging evidence has shown that costs can be recovered without compromising data accessibility or the ease of doing business. In terms of legislating for public access, implementation across the globe has shown that, in general, the disclosure of BO can be readily accommodated alongside data protection and other relevant obligations. Implementers will need to articulate a clear purpose and legal basis in the law, ideally broadly defined (e.g. accountability and public interest) rather than narrowly defined (a specific policy area such as AML). They should consider any context-specific threats beneficial owners may face after disclosure that may be unique to their jurisdiction, and mitigate the negative effects to the extent possible, such as through protection regimes.
At the time of writing, a number of court cases against public registers are being heard. It is important that the justification and proportionality of BOT are tested in an environment of forever increasing data, and their outcomes will no doubt have an impact on the debate. BOT is yet to be implemented everywhere, and conclusions therefore cannot be drawn about potential negative effects that may emerge in all contexts. Neither implementers nor transparency advocates can be blindly optimistic about publication, and should take concerns seriously. Giving due considerations to the concerns as well as the range of benefits will enable implementers to devise an effective and safe BOT regime that is appropriate for their context.