The EITI urges continued efforts on beneficial ownership transparency to combat corruption

On International Anti-Corruption Day, EITI Board Chair Rt Hon. Helen Clark argues that continuing efforts to publish the beneficial owners of companies are vital to combat corruption in the extractive sector.

Governments in 57 countries are making important strides in publishing information on the beneficial owners of extractive companies, using the beneficial ownership provisions of the EITI Standard. Research published earlier this week by the Opening Extractives programme has demonstrated the utility and importance of public registers being used for this purpose. It highlights cases where public data on company ownership has been used to counter corruption by “following the money” to investigate corruption cases, reduce corruption risk, and analyse data to improve policy and strengthen data integrity.

“In the context of the extractive sector, which is at high risk of corruption, this information is critical to achieving transparency and good governance. Without it, citizens cannot identify beneficiaries of licenses or operations in the sector in order to form a full picture of how revenues flow and to whom,” said Helen Clark, EITI Board Chair.    

A ruling on 22 November by the European Union Court of Justice (CJEU) has resulted in the temporary suspension of public beneficial ownership registers in several EU countries.

“While the ruling has focused attention in the EU on the legal basis for public beneficial ownership registers, it should not be allowed to slow the pace of ongoing reforms elsewhere,” said Helen Clark. “In most jurisdictions, natural resources are owned by citizens. The ruling does not affect their legitimate interest to understand who benefits from their natural resources.”

“The ruling is specific to the EU context and legislation. In the wake of the ruling, the EITI joins with partners to urge leaders and supporters of beneficial ownership transparency – including companies, civil society and governments – to champion the benefits of public registers and continue work underway to implement the beneficial ownership provisions of the EITI Standard.

With the 6^th Anti-Money Laundering Directive of the EU under development, the European Council, Commission and Parliament should engage in urgent discussions with companies, civil society and other stakeholders about this ruling, to consider how public access to registers could be restored through a revised directive.

Given the influence of EU policy around the world, a statement demonstrating the Commission's leadership on this agenda would reassure governments outside EU countries that action is being taken and give further momentum to essential reforms. It would also reassure data users in those countries that they can and should continue to use and access public data to deepen the fight against corruption, build fairer markets and manage business risk.

It is our expectation that EITI implementing countries outside the EU will continue progress on collecting and disclosing beneficial ownership data as required by the EITI Standard. EITI requirements on beneficial ownership disclosure are based on broader objectives related to fighting corruption in the extractive sector. Any slowing of progress towards beneficial ownership disclosure would be a setback, and  would play directly into the hands of those seeking to use anonymous companies to shield  corrupt activities from public view,” Helen Clark said.