Implement a register of beneficial interests

Globally, there are serious concerns about the lack of transparency in the ultimate ownership of companies, trusts, and other organisations. This lack of transparency can make it hard to determine, for instance, who is benefiting when public funds go to private organisations, whether organisations are paying the correct amount of tax, and whether money-laundering or other forms of corruption are occurring.

Increasingly, the response to these concerns is for countries to create what are known as registers of beneficial interests, where the 'beneficial' interest denotes the person(s) ultimately controlling or owning the organisation in question.

New Zealand has previously committed, in various forums concerning transparency/openness, to pursuing a register of beneficial interest, but it is not clear what progress has been made. It is important that the next action plan commits to actually completing such a register.

Why the contribution is important

New Zealand has a relatively minimalist approach to regulating organisations such as companies, at least in comparison to other major developed economies. New Zealand also has an exceptionally large number of trusts, which currently are subject to very minimal scrutiny. Weaknesses have already been exposed, though to some extent addressed, in the controversy around foreign trusts as revealed in the Panama Papers. In addition, as New Zealand businesses become increasingly integrated with the global economy (coronavirus notwithstanding), the likelihood of corrupt practices being imported increases. New Zealand is also being left behind by countries like the UK in the creation of important anti-corruption mechanisms such as a register of beneficial interests. It is accordingly important that such a register be created.

by maxrash on March 09, 2021 at 05:09PM

Current Rating

Average rating: 5.0
Based on: 1 vote

Comments

  • Posted by ddewhurst June 18, 2021 at 11:31

    +1

    Anonymous shell companies enable corruption, fraud, organised crime and tax evasion. This undermines trust in companies and discourages investment. Public access to high quality data on who owns companies is essential to prevent corruption, organised crime and tax evasion. It improves the business environment by increasing competitiveness and reducing risk, and helps businesses and governments understand who they are doing business with.

    Since chains of corporate ownership can often involve international companies, to realise the full benefits of a public beneficial ownership register, data from the register must be available in an open, standardised format, which is interoperable with beneficial ownership data from other jurisdictions.

    Therefore, any commitment on this topic should go beyond just establishing a public beneficial ownership register and extend to implementing the Beneficial Ownership Data Standard: http://standard.openownership.org/en/0.2.0/index.html

    Publishing standardised data on beneficial ownership will make it possible to apply tools and methodologies developed in other jurisdictions to the data published in New Zealand.
Log in or register to add comments and rate ideas