Earlier this week, the UK Parliament’s Joint Committee on the Draft Registration of Overseas Entities Bill published its recommendations on the bill, and we’re pleased to say they’ve explicitly accepted a lot of our recommendations (as well as ones we made in common with anti-corruption NGOs such as Global Witness).
Clause 15 enables the Secretary of State to modify requirements for overseas entities where the Government decides that the entity is already providing beneficial ownership information to a register in its country of formation, and where the Government considers that register to be “equivalent” to the Register of Overseas Entities… The draft Bill does not contain any definition of ‘equivalence’. We are inclined to accept the definition proposed by OpenCorporates (a database that shares information on corporate entities), which stated that “equivalent” registers:
- Must contain the same—we would suggest substantially the same—level of detail as the UK Register, including unique identifiers;
- must be publicly accessible;
- must be freely available;
- must be available as open data;
- and must be updated at least as often as the UK Register
The draft Bill aims to increase the transparency of information about who really owns
UK land. The information provided on the Register must therefore be accurate. Without a verification mechanism to ensure that the information provided is true and correct, the information on the Register will not provide the requisite level of transparency. OpenCorporates offered a useful definition of ‘verification’. It is a three-stage process:
- Ensuring that the person making a statement about beneficial ownership is who they say they are, and that they have the right to make the claim (authentication and authorisation);
- ensuring that the data submitted is legitimate (validation);
- ascertaining that the statement made is true (truth verification).
We’re delighted to have been responded to this consultation, and of the committee’s engagement in this important area, for two reasons. First, the UK is leading the world on beneficial ownership transparency, and thus to a degree setting de facto standards.
Second, using anonymous companies to purchase high value property is a key vector for international money laundering. By creating this register – particularly with the above recommendations – the UK is both making this significantly more difficult for criminals, and creating public beneficial ownership data for non-UK companies (e.g. Cayman Islands companies), which are otherwise opaque.