EITI at heart of UK Anti-Corruption Summit, 12 May

Oslo / London, 11 May 2016. 

"EITI members are showing leadership on beneficial ownership disclosure" says EITI Chair Fredrik Reinfeldt on the eve of the anti-corruption Summit in London. The issues of beneficial ownership and commodity trading transparency will be central pillars of the Summit. Fredrik Reinfeldt will meet in London with Heads of State and senior industry and civil society leaders to discuss these issues.  

The Panama files have been a stark reminder of the importance of the new EITI requirements on beneficial ownership reporting to tackling issues of tax evasion and improper allocation of licenses and contracts. Ensuring openness and minimising the possibilities for undue secrecy requires efforts with tax havens, but of course also in countries where the money comes from.  These are often the resource rich countries that make up the EITI membership. The Summit is opportunity to take this agenda further and to demonstrate that we are working at all levels to end ownership secrecy. 

On commodity trading, the EITI requires disclosure of the revenue received by the state-owned companies for the sale of their share of production broken down by buying company. The Summit will seek to open up a dialogue between the key trading countries and others, to accelerate progress on the state’s share and on onward trading, to complement what’s happening in EITI.

Extensive guidance available for countries

The international Secretariat has prepared guidance materials to help countries with beneficial ownership transparency Find out more here:

• Guidance on beneficial ownership for member countries
• Overview of the EITI's beneficial ownership work 

About the EITI

• The Extractive Industries Transparency Initiative (EITI) is a global Standard to promote open and accountable management of natural resources. Learn more at www.eiti.org.
• EITI is chaired by Fredrik Reinfeldt, former Prime Minister of Sweden (2006-2014).
• 51 countries are currently implementing the EITI Standard, and recognised as either EITI compliant or EITI candidate. See the list of countries at www.eiti.org/countries.
• Media enquiries can be directed to Eddie Rich (erich@eiti.org / +44 7805 574549).
• In order to receive media releases, please sign up here.

Beneficial ownership requirement 

Quoted from the EITI Standard, 23 February 2016 

2.5 Beneficial ownership.

a) It is recommended that implementing countries maintain a publicly available register of the beneficial owners of the corporate entity(ies) that bid for, operate or invest in extractive assets, including the identity(ies) of their beneficial owner(s), the level of ownership and details about how ownership or control is exerted. Where possible, beneficial ownership information should be incorporated in existing filings by companies to corporate regulators, stock exchanges or agencies regulating extractive industry licensing. Where this information is already publicly available, the EITI Report should include guidance on how to access this information.

b) It is required that:

i. The EITI Report documents the government’s policy and multi-stakeholder group’s discussion on disclosure of beneficial ownership. This should include details of the relevant legal provisions, actual disclosure practices and any reforms that are planned or underway related to beneficial ownership disclosure.

ii. By 1 January 2017, the multi-stakeholder group publishes a roadmap for disclosing beneficial ownership information in accordance with clauses (c)- (f) below. The multi-stakeholder group will determine all milestones and deadlines in the roadmap, and the multi-stakeholder group will evaluate implementation of the roadmap as part of the multi-stakeholder group’s annual progress report.

c) As of 1 January 2020, it is required that implementing countries request, and companies disclose, beneficial ownership information for inclusion in the EITI Report. This applies to corporate entity(ies) that bid for, operate or invest in extractive assets and should include the identity(ies) of their beneficial owner(s), the level of ownership and details about how ownership or control is exerted. Any gaps or weaknesses in reporting on beneficial ownership information must be disclosed in the EITI Report, including naming any entities that failed to submit all or parts of the beneficial ownership information. Where a country is facing constitutional or significant practical barriers to the implementation of this requirement by 1 January 2020, the country may seek adapted implementation in accordance with requirement 8.1.

d) Information about the identity of the beneficial owner should include the name of the beneficial owner, the nationality, and the country of residence, as well as identifying any politically exposed persons. It is also recommended that the national identity number, date of birth, residential or service address, and means of contact are disclosed.

e) The multi-stakeholder group should agree an approach for participating companies assuring the accuracy of the beneficial ownership information they provide. This could include requiring companies to attest the beneficial ownership declaration form through sign off by a member of the senior management team or senior legal counsel, or submit supporting documentation.

f) Definition of beneficial ownership:

i. A beneficial owner in respect of a company means the natural person(s) who directly or indirectly ultimately owns or controls the corporate entity.

ii. The multi-stakeholder group should agree an appropriate definition of the term beneficial owner. The definition should be aligned with (f)(i) above and take international norms and relevant national laws into account, and should include ownership threshold(s). The definition should also specify reporting obligations for politically exposed persons.

iii. Publicly listed companies, including wholly-owned subsidiaries, are required to disclose the name of the stock exchange and include a link to the stock exchange filings where they are listed.

iv. In the case of joint ventures, each entity within the venture should disclose its beneficial owner(s), unless it is publicly listed or is a wholly-owned subsidiary of a publicly listed company. Each entity is responsible for the accuracy of the information provided.

g) The EITI Report should also disclose the legal owners and share of ownership of such companies.

Requirement on commodity trading

Quoted from the EITI Standard, 23 February 2016 

4.2 Sale of the state’s share of production or other revenues collected in kind.

Where the sale of the state’s share of production or other revenues collected in kind is material, the government, including state-owned enterprises, are required to disclose the volumes sold and revenues received. The published data must be disaggregated by individual buying company and to levels commensurate with the reporting of other payments and revenue streams (4.7). 

Reporting could also break down disclosures by the type of product, price, market and sale volume. Where practically feasible, the multi-stakeholder group is encouraged to task the Independent Administrator with reconciling the volumes sold and revenues received by including the buying companies in the reporting process.