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3/15/16

The Netherlands: Dutch should go for real transparency in corporate ownership - by Arjan Al-Fassed and Anne Scheltema Beduin

In the Netherlands it’s still possible to create legal companies without revealing the identity of the actual owner, Criminals abuse such constructions for purposes of corruption, fraud, money laundering, organised crime and cartels. A public registry, the so-called UBO registry, aims to change all that. But it can only happen if the registry is accessible to all. A UBO registry is a central registry which contains the names of the ultimate beneficiaries and other legal corporate entities. A ‘UBO’ or Ultimate Beneficial Owner, is the person who is pulling the strings, openly or behind the scenes. Openness about the identity of the UBO strengthens confidence, increases accountability and gives the market, stakeholders, investors, businesses and consumers a proper insight into who exactly they are dealing with. Corruption, money laundering and the financing of terrorism are international problems and that is why, before June 26 2017, all EU countries have to have a registry in place. Recently, finance minister Jeroen Dijsselbloem presented an outline of the Dutch version of the UBO registry. Although Dijsselbloem is an advocate of a registry, his version is far from offering real transparency. Not only does the government want to erect a paywall, it also wants to know who wants the information: every visitor needs to log in. Moreover, the general public’s access to the registry is limited to a minimal data set.

Read more at DutchNews.nl: Dutch should go for real transparency in corporate ownership http://www.dutchnews.nl/features/2016/03/dijsselbloem-should-go-for-real-transparency/
In the Netherlands it’s still possible to create legal companies without revealing the identity of the actual owner, Criminals abuse such constructions for purposes of corruption, fraud, money laundering, organised crime and cartels. A public registry, the so-called UBO registry, aims to change all that. But it can only happen if the registry is accessible to all.

A UBO registry is a central registry which contains the names of the ultimate beneficiaries and other legal corporate entities. A ‘UBO’ or Ultimate Beneficial Owner, is the person who is pulling the strings, openly or behind the scenes. Openness about the identity of the UBO strengthens confidence, increases accountability and gives the market, stakeholders, investors, businesses and consumers a proper insight into who exactly they are dealing with. Corruption, money laundering and the financing of terrorism are international problems and that is why, before June 26 2017, all EU countries have to have a registry in place.

Recently, finance minister Jeroen Dijsselbloem presented an outline of the Dutch version of the UBO registry. Although Dijsselbloem is an advocate of a registry, his version is far from offering real transparency. Not only does the government want to erect a paywall, it also wants to know who wants the information: every visitor needs to log in. Moreover, the general public’s access to the registry is limited to a minimal data set.

Shadowy constructions The data from a UBO registry are only properly useful if access is unlimited and equal for all. Obscuring information about companies, foundations, associations and organisations is part of the problem.

The minister’s obstructions are also flying in the face of what the registry is meant to achieve; i.e. putting a stop to the creation of shadowy constructions used for illegal purposes. In order to do that, the complete data set needs to be accessible. In Myanmar, for instance, a criminal chain made up of military elites, drug barons and money laundering organisations related to the jade industry was discovered. This was only possible because the complete data set was publicly accessible, machine readable and programmatically compatible. Public watch dogs, among them Global Witness, were thus able to reveal the hidden ties between the jade industry and the most important players.

A pay-per-view system is problematic because it impedes the use of the complete data. If you have a list of administrators who have been convicted for money laundering and you want to combine it with the Dutch UBO registry to check if any of the people appearing on the list is on the board if a Dutch company, the costs of your research will mount considerably. The finance minister is silent on the subject of open data in its UBO registry proposal. He is hiding behind the privacy argument, which is a questionable one since it is at odds with transparency. The minister does admit that a strict access limitation would be difficult to achieve and monitor and would be expensive – both for the administrators and the users of the registry – and not in line with the purposes of the Directive.

Read more: Dutch should go for real transparency in corporate ownership - DutchNews.nl

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