Wednesday, April 04, 2018

For beneficial ownership registers

Two years ago, the Panama papers were published. Since then, governments have talked a lot about transparency to fight elite money-laundering, but done surprisingly little. Writing in The Guardian, two of the journalists involved are renewing the push for a simple, easy solution: public beneficial ownership registers:

There is a far less bureaucratic and more powerful measure: public beneficial ownership registries. Databases in which citizens can easily access and explore the owners of companies. Not the nominee director, not the fake shareholder – the real owner. The person at the center of the matryoshka-like corporate structures, or, as experts refer to them: the ultimate beneficial owner of a company.

A database of actual owners would enable companies to check with whom they are actually doing business. It would enable activists, journalists and skeptical citizens to investigate the individuals running dubious companies which earn millions in alleged “consulting contracts”, which are in many cases nothing more than concealed payments of corruption money. It would also give prosecutors the opportunity to follow dark money without having to rely on nerve-racking, time-consuming legal maneuvers with foreign governments.

Searchable by company and by individual names, it would enable investigators to see if Dictator X or Autocrat Y owns companies in Country Z. Combined with a public property register, it would narrow, if not close, loopholes which allow oligarchs and their relatives to betray their own citizens and stash plundered money across the globe.

And it would allow us to find out which rich arseholes are cheating on their taxes, and hold them to account.

There's no privacy issue here. In New Zealand, nominal company owners are identified and publicly registered. If you go to the Companies Office website and look around, you'll find the (nominal) owners of many New Zealand companies. However, when a company is owned offshore, all you'll get is the name of the offshore front. Requiring public beneficial ownership information would place foreign owners on the same playing field as kiwi ones. And that seems entirely fair, even without the substantial benefits in deterring corruption and identifying criminals.