Advancing Beneficial Ownership Transparency in the Data Privacy Age

In several previous pieces for BriberyMatters, I have examined the links between beneficial ownership transparency (BOT) and anti-corruption, such as safeguarding government procurement, limiting business’ third-party risks, and protecting economies against the investment of ill-gotten gains. To continue this theme, I spoke with the Executive Director of the UK-based non-profit Open Ownership (OO), Thom Townsend. Our conversation was timely, coinciding with the August release of the organization’s new five-year strategy. We focused on the evolution of BOT, particularly in light of new thinking around data privacy, and what those changes mean for the fight against corruption.

OO’s origins date to the 2016 London Anti-Corruption Summit, hosted by then-UK Prime Minister David Cameron. Townsend’s involvement in the Summit stemmed from his work as the UK Government’s Head of Data Policy, building in turn on the UK’s 2013 commitment to create a beneficial ownership registry. Following the Summit, OO was formed with the aim of creating a universal data standard for beneficial ownership, as well as to build a global registry to collect standardized ownership data; Townsend joined several years later.

Since then, OO has had “an interesting journey,” Townsend says. “It has become evident,” he explains, “that the march of transparency isn't inevitable and, despite leadership on this from a number of countries, most notably the UK, attitudes on public access to this data has shifted.” He cites the 2022 judgement of the Court of Justice of the European Union, which as he puts it, “essentially says we don't believe public access to BOT information is aligned with the push for privacy.” But Townsend also stresses that the Court acknowledged a legitimate right to access for the media and civil society. Thus, he says, the EU is seeking a sensible balance in its access regime, citing the 2024 EU anti-money laundering directive, to be implemented in 2027.

Such reassessment has also played out in OO’s work. Townsend says that OO no longer runs its global registry, instead seeking to make ownership data “universally adoptable yet flexible for different countries.” OO also wants to improve governments’ ability to implement BOT by engaging the actual users of information. Going forward, he thinks the BOT movement needs to shift from an access/privacy binary to a greater focus on who those information users are, what they need to access and why, as well as how the data is used in practice, and then work backwards to craft appropriate regulations. Understanding those use cases will allow governments to achieve transparency goals while ensuring data privacy, Townsend says. 

Therefore, Townsend says, OO’s new strategy will focus on five “core priorities”: 1) supporting user-centred, impactful reforms; 2) making beneficial ownership data accessible, usable, and connected; 3) embedding beneficial ownership data in key areas of public finance; 4) building the evidence base; and 5) driving global standards and cooperation. He emphasizes this point about cooperation, noting, “it is difficult for governments and civil society to tackle corruption blindfolded.” But since large-scale multilateral cooperation is challenging in the current global political climate, OO wants to focus on smaller initiatives that are more achievable.

One case where these various themes come together is OO’s support for the Africa Beneficial Ownership Transparency Network (AfBOT), a peer-to-peer group that brings together various government officials from over a dozen African countries working on issues related to corporate registries. By focusing on domestic resource mobilization through tax receipts – which had been on the upswing prior to the pandemic – governments can not only stem outflows tied to corruption and crime, but also start to replace lost foreign assistance inflows. AfBOT can help address the challenge that while banks can see suspicious flows, they can only report to one country; the network makes information-sharing more feasible. He also offers the example of OO’s work on fishing rights in Ghana; regulations require that only Ghanaian entities can fish local waters, but BOT revealed that most Chinese-owned companies dominated the industry.

Moving forward, Townsend has concerns that following enforcement changes in the US Corporate Transparency Act, other countries might feel less pressure to advance BOT. To that end, he has his eyes on the current and upcoming round of Financial Action Task Force (FATF) assessments. Townsend says that staying off the FATF gray list is a major motivator for countries to have some beneficial ownership disclosure regime. In particular, Townsend says, he will watch how “effective and robust” their BOT implementation processes are judged to be.

Marc Schleifer

Governance, Democracy and Economic Development Expert