2019 Transparency International’s Corruption Perceptions Index: What it says about corruption and beneficial ownership transparency.

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OpenOwnership · Jan 2020

Transparency International’s 2019 CPI analysis takes a step back and acknowledges that corruption is increasingly complex and transnational in nature. It does this by drawing attention to the fact that countries at the top of the CPI, which are deemed “clean” in terms of perceived level of public sector corruption, are also involved in corruption that is taking place elsewhere. Use of shell companies to hide money gained from corruption are a common feature in a number of high profile corruption scandals. OpenOwnership exists to work with all countries to disclose ownership data to make it accessible and connected across borders, making it easier to follow the money and shrinking the space within which corruption can take place.

The overall conclusion is that whilst some countries have increased or dropped by a few points, the majority of countries are stagnating due to the increasing role that big money is playing in politics. In fact, lower CPI scores are associated with higher concentrations of power among the rich. Requiring company owners to disclose if they are connected to people with political power can reveal potential conflicts of interest and corruption risk can be reduced. Related to this, research into the role that shell companies play in funding election campaigns around the globe is a key issue, particularly in the run up to the US elections later this year.

Commenting on the results OpenOwnership Executive Director Thom Townsend said:

“The Corruption Perceptions Index provides valuable information about the context in which beneficial ownership reforms are taking place. OpenOwnership will be scrutinising this year’s results, focusing on Beneficial Ownership Leadership Group countries, as they take steps to disclose the true owners of companies. In many countries, tackling grand corruption is a key driver of beneficial ownership reform, and transparency over who owns companies is a fundamental step to tackling grand corruption and crime.”

Stocktake of Beneficial Ownership Leadership Group members: The Beneficial Ownership Leadership Group (BOLG) came together in 2019 to drive the global policy shift towards free, open beneficial ownership data. Each country, upon joining the BOLG, signs up to a set of best practice disclosure principles. Convened by OpenOwnership and Open Government Partnership, the group is comprised of Armenia, Kenya, Latvia, Mexico and Slovakia.

Armenia has made significant strides in the last year, and is rightly hailed by Transparency International and The Economist as a “country to watch”. Since the 2018 revolution, the country has demonstrated promising developments in advancing anti-corruption policy reforms. It is working closely with OpenOwnership in the development of its public registers and is set to launch one this year for the extractives industry .

And whilst Mexico has been highlighted as a “significant decliner” on the CPI since 2012, a focus on anti-corruption reform in the last year has seen its score increase for the first time. Slovakia, Latvia and Kenya are examples of states that have seen stagnation in their CPI scores as of late, though that is not to say that important work is not being done. We envisage that their proposed commitments and legislation on beneficial ownership transparency will bring necessary and positive systemic level changes.

With big leaks like the Panama Papers and the Luanda Leaks, there is clearly an appetite and necessity for publicly available information as a way to combat the opacity that permits the international flow of illicit funds.

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