Beneficial Ownership Transparency: A Spotlight On International Beneficial Ownership Registration

• Published date: 08 December 2020
• Subject Matter: Corporate/Commercial Law, Government, Public Sector, Criminal Law, Compliance, Corporate and Company Law, Money Laundering, White Collar Crime, Anti-Corruption & Fraud
• Law Firm: Mayer Brown
• Author: Mr Sam Eastwood, Chris Roberts and Daniel Leveson

In October 2020 the G20 and B20 (the official G20 dialogue with the business community) convened at a summit in Saudi Arabia. The recommendations made to the G20 reflect a growing trend at an international level to enhance transparency in beneficial ownership.

As we outlined in our previous briefing, Mayer Brown was selected by the Secretariat to be a Knowledge Partner and worked closely with the B20 Taskforce on Integrity & Compliance which made three recommendations to the G20, including the development of digital public registers to increase transparency around beneficial ownership.¹

Key takeaways

1. Beneficial ownership transparency has been promoted in various international policy fora over the past decade and substantial progress has been made in advancing this area of policy.
2. Whilst considerable progress has been made in promoting the establishment of public beneficial ownership registers implementation is not consistent which risks undermining important developments.
3. Meaningful progress is required to establish and integrate verification measures within the design of registers to improve the accuracy and reliability of information submitted.

Background

Important developments at an international level, for example, the Financial Action Task Force (FATF) and the G20 fora and the London Anti-Corruption Summit in 2016 have provided significant momentum over the past decade to the implementation of beneficial ownership registers.

Nevertheless, this is a nascent area of domestic and international policy and meaningful progress has been compromised, in part, due to limitations of the policies themselves.

The Financial Accountability, Transparency & Integrity (FACTI) Panel highlighted in its July 2020 publication that the maintenance of beneficial ownership information remains an area with comparatively low compliance, even among jurisdictions that have signed up to global standards, such as the FATF Recommendations and the G20 High Level Principles on Beneficial Ownership (the G20 Principles).²

Emerging Beneficial Ownership Registration Frameworks

A total of 81 jurisdictions worldwide have passed laws requiring beneficial ownership to be registered with a government authority - only 11 of which are G20 Members.³ The FATF Recommendations are perhaps the most pervasive international norms related to beneficial ownership transparency, with 37 jurisdictions currently members. In short, the FATF Recommendations, which were first issued in 1990, set out a comprehensive and consistent framework of measures which countries should implement in order to combat money laundering and terrorist financing. The G20 Principles, which were adopted by G20 leaders in 2014, built upon the FATF Recommendations and dramatically increased both the number and diversity of countries that have signalled their commitment at the highest political level to improve beneficial ownership transparency.⁴

The B20's policy recommendations at G20 / B20 Saudi Arabia 2020 highlighted that the business community advocates greater transparency, reinforcing integrity and fighting corruption. The policy recommendations also emphasise the importance of effectively implementing the G20's current and prior...