Could an interim unilateral beneficial ownership option accelerate #anticorruption summit aspirations?
The beneficial ownership debate is about lobbying and policy statements and legislation and registers and incorporation systems. By the end of the year, jurisdictions could have a public register or a private register or no progress on a register.
On 4th April 2016 OpenCorporates announced a Global Beneficial Ownership Register project with more context in a blog post from the Open Contracting Partnership and the ONE campaign policy director.
I have already established a proof of concept on declaration of beneficial ownership on a public register, it required an internal legal opinion from Her Majesty’s Attorney General chambers because deeds on a public register were assumed to be between two parties and that a declaration of beneficial ownership by definition only included one party:
https://openmindedly.wordpress.com/2014/10/05/country-growth-hacking/
Of course, ideally, the Isle of Man Deeds Registry would be online with public blockchain technology.
Does anyone actually have a register classification scheme to reference? GOBR will support self-reporting to bypass any delays in specific jurisdictions or specific corporate entities (business names, charities, foundations, trusts) but a draft scheme would be helpful to prompt discussions. For example:
| Level | Classification | Notes |
| 0 | unregulated agents | nothing on client file |
| 1 | regulated agents | legal requirement to hold beneficial ownership details |
| 11 | Private 1 star | reference to centralised corporate register to contact declared officers or the regulated agent |
| 12 | Private 2 stars | reference to centralised corporate register to contact officers or the regulated agent
legal power to require beneficial ownership declaration by officers or disclosure by the regulated agent (without tipping off clients) |
| 13 | Private 3 stars | centralised beneficial ownership register with meta data to decentralised beneficial ownership data (similar to IATIregistry.org)
legal requirement to update contemporaneously |
| 14 | Private 4 stars | centralised beneficial ownership register |
| 15 | Private 5 stars | centralised beneficial ownership register
a Service Level Agreement (for example, 24 hours) or perhaps cross-border law enforcement logins with specific user audit trail and unique case references |
| 15 | Private 5 stars | centralised beneficial ownership meta data register to decentralised beneficial ownership data (similar to IATIregistry.org) |
| 16 | Private 6 stars | decentralised beneficial ownership register |
| 17 | Private 7 stars | decentralised consolidated corporate register with beneficial ownership data (i.e. government only private blockchain to support tax information exchange agreements) |
| 21 | Public 1 star | centralised corporate register with optional beneficial ownership declaration (i.e. self-reporting) |
| 22 | Public 2 star | centralised beneficial ownership register |
| 23 | Public 3 star | centralised beneficial ownership register
aggregated analytics on public interest trends |
| 24 | Public 4 star | centralised beneficial ownership register
open data API to support projects such as GBOR |
| 24 | Public 4 star | centralised beneficial ownership meta data register to decentralised beneficial ownership data (similar to IATIregistry.org) |
| 25 | Public 5 stars | centralised beneficial ownership register
open data API to support projects such as GBOR legal requirement to update contemporaneously |
| 25 | Public 5 stars | centralised beneficial ownership meta data register to decentralised beneficial ownership data (similar to IATIregistry.org)
legal requirement to update contemporaneously with randomised regulator audits |
| 26 | Public 6 stars | decentralised consolidated corporate register with beneficial ownership data i.e. public blockchain operated by governments, the media, stock exchanges, universities, charities, etc. |
| 27 | Public 7 stars | decentralised consolidated corporate register with beneficial ownership data i.e. public blockchain operated by governments, the media, stock exchanges, universities, charities, etc.
legal requirement to update contemporaneously |
I have relentlessly encouraged the Isle of Man to progress in the annual Open Knowledge open government league table from top 100 (rebased) to top 40 to top 20 and hopefully top 10 in Q3 2016.
On 6th May 2016 the Isle of Man Government announced new functionality with an online incorporation and demonstrates that new functionality is an option. An important factor though is that smaller governments typically outsource the incorporation system and therefore any new functionality requires a prioritised business case in an increasingly complex (i.e. slower) cross-government procurement process or approval of an unplanned external cost (i.e. higher) prompted by global macro factors as either an upgrade by the existing supplier at backloaded commercial rates or a securitisation option that would increase fees that may not then be internationally competitive.
What do I mean by an interim unilateral system?
Something that would address reasonable concerns on competitor jurisdictions.
Consider a legal requirement that a specific beneficial owner must:
- adopt a unique anonymised beneficial owner reference (similar to the global legal entity identifier) in a specific jurisdiction
- consistently apply that unique beneficial owner reference to any corporate activity in a specific jurisdiction
- declare that a unique beneficial owner reference has been applied on key documents such as incorporations, annual returns, share allotments and share transfers.
The largest impact is likely to be when agents discover they do not actually have an “exclusive” relationship with a beneficial owner (i.e. they lied) and technically they are not eligible for discounted management fees on corporate structures.
Unilateral actions could prompt a multilateral network effect.
Feedback welcome.
Funding offers welcome too!
openmindedly 