4 Things the Attorney General Should Consider In Developing A National Beneficial Ownership Register
Recent events in global economics, such as the Panama Papers and the Paradise Papers, have underscored the urgent necessity for more transparency when it comes to financial entities.
Citizens around the globe and legitimate companies now demand and support complete clarity and swift, airtight legislation that protects the financial system from vulnerabilities that could be exploited with money being lost to fraud, tax evasion, organised crime, corruption, and money laundering.
Yet any effort to strengthen the system largely depends on doing away with financial secrecy, company anonymity, and the opacity around who benefits from and controls businesses — the ultimate beneficial owner.
Here in T&T, the Companies Amendment Act 2019 will see to it that the country invests in a beneficial ownership information register for all companies and non-profit organisations.
A national register exposing all beneficial owners is a directive of the Financial Action Task Force and it would go a long way in dismantling corruption and white-collar crime in Trinidad and Tobago.
In fact, several countries have taken their first steps toward establishing beneficial ownership registers which reveal the identities of the people wielding the power in their corporations.
They have found that a beneficial ownership register helps honest companies know who they are doing business with, thereby increasing healthy competition and ensuring that all companies have a fair chance.
They know beneficial ownership registers exponentially magnify trust in the government and its ability and commitment to dismantle corrupt, money-draining criminal systems that have been in place for too long.
And as is the case with the TTEITI’s own register for the oil, gas, and mining industries, a beneficial ownership register will also bring to light the names of company owners and stakeholders with deep political connections.
With Trinidad and Tobago now joining this exciting movement to build a database of the real owners behind businesses, there is plenty to learn from these countries that have already begun the process and are at various stages of developing their beneficial ownership registers.
Here are four things we think the Attorney General should bear in mind as we take our next steps into making sure that all financial entities are transparent and honest.
Free Public Access
The UK, which has recently set up its register, has made all the company ownership data free to access. For several reasons, it is crucial not to hide the records behind paywalls and fees or limit public access.
Not only would it take the control away from government officials and financial institutions, thereby making it a truly democratic process, but it would also empower investigative journalists, law enforcement officials, and the general public to scrutinise and verify the data carefully and stay alert for inconsistencies.
This is not only helpful to the economy, but it will also have political impact by creating more engaged citizens who can meaningfully help to thwart corruption.
Get All the Stakeholders Involved
T&T’s national beneficial ownership register cannot be fully and truly public unless it is a collaborative effort. The government must include civil society, procurement officers, journalists, businesses, and accountants in the design and construction of this critical database.
Such a register can have real impact only if the data in it is versatile, useful, accurate, and relevant, and this will happen when all stakeholders are deeply invested.
What is certain is that this is not just a discussion between government, financial institutions and law enforcement.
Open Data Standards, Formats and Systems
Continuing in the same vein, it is essential that all the data in the database is not only accessible and free, but also fully open.
This analysis based on the UK registry shows that open data formats lead to more people having access to and benefitting from the information.
Open formats also enable thorough exploration, enhanced quality, and development of new tools and better systems by civil society and private experts.
Identify PEPs
A startling percentage of beneficial owners turn out to be Politically Exposed Persons (PEPs), politicians and officials who own companies to which they could secretly award government contracts.
Similar to the TTEITI’s registry which specifies which of the ultimate beneficial owners are PEPs, the national registry must also make this data transparent to enable the uncovering of conflicts of interest and potential corruption.
As a step toward transparency, Trinidad and Tobago is on the precipice of something great with the planned development of a national beneficial ownership register. This is a powerful opportunity to inspire openness and integrity, weaken corrupt forces, yield fairness in businesses and global finances, educate the public and deepen their trust in the government.
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