Principles for Effective Beneficial Ownership Disclosure

The following outlines 12 principles for effective beneficial ownership disclosure designed to make published data more easy to use, accurate, and interoperable. These have been reached through OpenOwnership’s work developing the Beneficial Ownership Data Standard and supporting almost 40 countries to advance beneficial ownership transparency. The principles are informed by established approaches for publishing open data and review of available research and evidence.

For OpenOwnership, effective disclosure means high quality, reliable data to maximise usability, and minimise loopholes. The 12 principles are core tenets of effective disclosure, and describe a range of policy, legal, and systems, data and technology characteristics that effective disclosure regimes have. Disclosure regimes sit within a wider political economy context, which is considered throughout OpenOwnership’s assistance to governments in implementing beneficial ownership transparency. For more information, please see OpenOwnership’s Implementation Guide.

Under each of the 12 principles, we have drafted a set of indicators and narrative assessment questions, built on those used within our technical assistance. We will share these with partners for input and discussion over the coming weeks.

Draft principles

1: Beneficial ownership data should be accessible to the public via a central register

Having a centralised public beneficial ownership register means that law enforcement, businesses, journalists and citizens from around the world can easily access information on the beneficial ownership of companies, subject to relevant privacy laws.

The utility of a public register is enhanced when the data is available online, in a structured format, and without use of barriers such as registration or payment.

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2: Beneficial Ownership should be clearly and robustly defined in law

Robust and clear definitions of beneficial ownership should cover all relevant forms of ownership and control.

Any exemptions that mean certain interests are excluded from disclosure should be limited, proportionate and clearly defined.

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3: Disclosure should comprehensively cover all relevant types of legal entities and natural persons

Having comprehensive coverage means all relevant legal entities and arrangements, and natural persons must included in disclosures.

Any exemptions that mean certain classes of person or entity are not to be included in the public register must be limited and proportionate.

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4: Low thresholds should be used to determine when beneficial ownership and control must be disclosed

Having low thresholds means most, or all, people with beneficial ownership and control interests in a company are included in disclosures, and that the risk that someone with relevant ownership or control remains hidden are reduced. Absolute values, rather than ranges, should be used when disclosing the percentage of ownership or control that a beneficial owner has.

Particular consideration should be given to the thresholds that apply to politically exposed persons with ownership or control interests.

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5: Sufficient information should be published to understand the full ownership chains

Covering full ownership chains means that it should be possible to understand how beneficial owners exert ownership or control over a company, even when beneficial ownership is held indirectly through one or more other companies.

Disclosure of intermediate steps in an ownership chain helps with joining up data from different sources.

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6: The identity of people and companies should be unambiguous in collected and published data

Having clear identification for people and companies, whilst respecting relevant privacy laws, means that it is possible to match together disclosures about the same people or companies, and to tell apart different people with the same name, or similar details.

Particular attention should also be given to identifying politically exposed persons.

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7: Measures should be taken to verify data to improve its accuracy and completeness

Having accurate and complete information means that there are sufficient data verification measures in place to create confidence in the register as a high quality and reliable source of information, and to alert the appropriate authorities when there is a risk that entries are not accurate.

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8: Information should be submitted in a timely manner and kept up to date

Having timely and updated disclosures means beneficial ownership information is updated within a short, defined time period after changes occur, and information is confirmed at least on an annual basis to keep registers up to date.

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9: Historic records should be kept and published

Providing historic records means when beneficial ownership or company structure information changes, this information is stored rather than replaced, and past disclosures remain publicly available.

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10: Adequate sanctions and enforcement should exist for non compliance

Effective and proportionate sanctions should exist against non-compliance with disclosure requirements, including for non-submission, late submission, incomplete submission or faulty submission.

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11: Stakeholders should be engaged throughout implementation

Engagement means delivering beneficial ownership transparency by involving a wide range of stakeholders from as many different groups as possible, from government officials to citizens and businesses, to create an effective disclosure regime that meets user needs, to help achieve their goals and improve impact.

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12: Disclosure processes and practices should be iterated on to deliver improvements and close loopholes

Iterate and improve means a long-term policy commitment to beneficial ownership transparency, and treating registers as an ongoing project, carried out step-by-step, with continual identification of ways to improve, close loopholes, and strengthen the use of information and data.

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