The Panama Papers and other high-profile scandals have vividly demonstrated that complex off-shore corporate structures allow corruption, fraud, organised crime and tax evasion. As a result, international bodies like the OECD, G20 and EU, and leading governments such as the UK, Denmark, Ukraine and Slovakia are making progress towards cracking down on the abuse of anonymous companies, including through public registers of companies’ beneficial owners (that is, the actual people who control and benefit from companies).
However, this move towards greater transparency has its critics, with some law firms and business advocates arguing that the publishing the names of beneficial owners risks violating data protection laws and individual privacy. But there is a significant risk that concerns about data protection and privacy may be overblown.
The Engine Room, supported by OpenOwnership and The B Team, investigated these concerns in detail. Our report, published in full today, assesses if publishing beneficial ownership data in public registers is lawful, if it is an effective way of tackling the abuse of anonymous companies, and how any potential impacts to privacy can be minimised or mitigated. Work on this project was led by Tom Walker, legal research was provided by Adriana Edmeades-Jones and Carly Kind, and research support was by Tom Parker.
What did we find?
The report finds that in most legal regimes worldwide, neither a company’s obligations with respect to data protection, nor government authorities’ obligations regarding the right to privacy will prevent sensible, measured regimes governing the collection and disclosure of the identity of beneficial owners. The report describes how these regimes are being implemented in countries such as the UK, and offers suggestions for others considering similar registers.