Regulatory and public pressure to increase transparency about the real people who own, control, or gain substantial economic benefits from companies—also known as beneficial owners—is growing globally. The demand for such disclosures is linked to increasing awareness that hiding beneficial ownership can facilitate corruption and financial misconduct. Innovations around beneficial ownership disclosure in extractive sector licensing highlight a new opportunity for coordination on legal frameworks and data platforms that cut across commercial sectors, agency mandates, and national jurisdictions to combat illicit financial flows yet still maintain flexibility for customization to meet challenges and risks in specific administrative and sectoral contexts.
In this discussion paper, part of the Council on Foreign Relations’ Global Governance to Combat Illicit Financial Flows series, NRGI governance programs director Erica Westenberg writes that now is the time to build bridges across beneficial ownership anticorruption efforts in the incorporation, banking, extractive, and real estate spheres. This must go beyond transparency. Westenberg notes beneficial ownership disclosure will only be impactful if this data is actually screened for corruption risks to help deter, detect, and penalize illicit financial flows.
This paper is based on research undertaken as part of existing programming of the Natural Resource Governance Institute.