Beneficial Ownership Information and Anti-corruption

Transparent Beneficial Ownership Registries are a powerful weapon to follow the money

Several studies demonstrate a positive relationship between transparent Beneficial Ownership and fighting corruption. A study on Slovakia concluded that government institutions, investigative journalists, and other civil society stakeholders can play an effective role in the fight against corruption if they harness the data and information on who ultimately owns, benefits, or controls a company. Per the International Consortium for Investigative Journalists (ICIJ), journalists' revelations from 2016 to 2021 helped governments around the world to recover more than $1.36 billion in back taxes and penalties, contributed to the enactment of new laws, and encouraged the enforcement of improved mechanisms to tackle corruption, as a direct result of the revelations included in the Panama Papers.

Transparent Beneficial Ownership Registries necessary but not sufficient to effectively fight corruption

In the previously mentioned study on Slovakia, researchers argue that effectively fighting against corruption requires addressing the role of gatekeepers (such as banks, lawyers, accountants, and corporate service providers) who help corrupt officials to steal, hide, and spend the proceeds of illegal activities. Another study refers to the fact that the private sector’s voluntary disclosure of information to the government on who are the owners of companies will ensure Beneficial Ownership Registries are comprehensive, up-to-date and actionable to tackle wrongdoings. Finally, accessibility and effective use of data and information contained in Beneficial Ownership Registries is essential to fully reap the benefits of this key source of information as an effective means to tackle corruption.

Also see the August 2023 Evidence and Learning Talk Series: Unbundling Corruption to Understand Its Harms with Professor Yuen Yuen Ang.

Do you have a study we should share for a future Facty Friday? Send an email to drg.el@usaid.gov!