Legal approaches to beneficial ownership transparency in EITI countries

As of 1 January 2020, the EITI Standard requires that implementing countries request, and companies disclose, beneficial ownership information (Requirement 2.5). This requirement applies to companies that apply for or hold participating interests in a country’s extractive sector and requires disclosure of their beneficial owners, the level of ownership and details about how ownership or control is exerted. To achieve this Standard in most implementing countries, new legislation may be necessary to provide the government with authority to collect beneficial ownership information. In a few countries, however, it will be possible to build on existing laws combatting corruption, money laundering and terrorist financing which already require beneficial ownership disclosure.

This paper examines legislation concerning beneficial ownership disclosure from selected EITI implementing countries. The purpose of the survey is to inform multi-stakeholder groups about different legal approaches to beneficial ownership disclosure and to assist the EITI and partners to support countries considering updated or new beneficial ownership legislation. The survey compares the various laws examined and identifies gaps in legislation that may limit comprehensive beneficial ownership disclosure. The survey then provides recommendations on the level of detail to be considered in beneficial ownership legislation and how identified gaps may be filled to improve transparency.

While it may be too soon to determine best practices considering the newness of most beneficial ownership laws, the survey identifies provisions which appear more likely to increase disclosure of beneficial ownership information and overall transparency because of their structure and comprehensiveness. Examples of provisions and recommendations that could help countries make their beneficial ownership legislation more comprehensive and enforceable are provided.