Beneficial ownership transparency in Liberia
Synopsis of Recommendations
Using the Open Ownership Principles
Liberia is at an early phase in its implementation of beneficial ownership reforms, the recommendations below are primarily tailored towards providing context-specific guidance on how Liberia can effectively implement BOT reforms over the next two years of the OE programme and make identifiable progress by 2023. The recommendations are also based on our understanding of the socio-economic, political and legal terrain in the country. For implementation purposes, we have prioritised the recommendations that we believe can and should be achieved within 12 months from the date of this report.
Principle 1: Robust definitions
1. The definition of “beneficial owner” in the Associations Law needs to be expanded to provide clear guidance on how to identify qualifying beneficial owners by setting thresholds, and by providing a non-exhaustive list of examples of economic or control interests and mechanisms through which these interests can be maintained. This can be achieved with the use of BO regulations. [Implementable within 12 months]
2. Liberia should set low disclosure thresholds to ensure the disclosure of all relevant ownership and control, and a risk-based approach should be used to set lower thresholds for particular sectors. This should be specified in the Regulations. [Implementable within 12 months]
3. Liberia should give particular consideration to thresholds that apply to ownership by PEPs, with a clear definition used to determine what constitutes a PEP.
Principle 2: Comprehensive coverage
4. Drafting of the planned economy-wide disclosure regulations should begin as soon as possible, and aim to cover the numerous gaps in the definition of a beneficial owner (highlighted on pages 14 to 17 ) [Implementable within 12 months]. Specifically, it should provide sufficient guidance on BO reporting obligations for entities (domestic, non-resident domestic and foreign corporations), including any exemptions to disclosure.
5. To ensure that the key agencies, particularly the LBR, prioritise and optimally deploy their limited financial and human resources, Liberia could adopt a phased approach to BO implementation. It could pilot the extractives register with domestic and non-resident domestic entities doing business in Liberia, and for all legal entities except trusts and foundations. [Implementable within 12 months]
Principle 3: Sufficient detail
6. The BO declaration form which will eventually be used to build the user interface on Liberia’s BO portal should require information that is sufficient to identify: a. the entity that is the subject of ownership or control; b. the natural persons with ownership or control in the entity; and, c. how the natural person exercises this ownership or control. Liberia could adopt a mixed-method approach, i.e. manual and online form, for this initial implementation period (1 to 2 years), and subsequently transition to a fully automated data collection process. [Implementable within 12 months]
7. Unique IDs (including country-level IDs) for people and entities should be collected and where appropriate, published. [Implementable within 12 months]
Principle 4: Central Register
8. The LBR should develop, design and launch the centralised and public BO register it has planned for the extractives sector in 2022, and use learnings from the pilot register to subsequently progress implementation of a full-economy register. [Implementable within 12 months]
Principle 5: Public access to a central register
9. In the development of its beneficial ownership web portal, Liberia should (where practically possible) allow public access to the beneficial ownership data collected. It can focus on only publishing data that is sufficient to disambiguate two beneficial owners.
Principle 6: Structured data
10. Data published on the BO portal should be available in a structured and interoperable format, e.g. BODS, and Liberia should adopt the specific guidance in the relational database design consideration document published by the OE team. [Implementable within 12 months]
Principle 7: Verified data
11. As the BO portal is being developed, plans should be created to address how the data will be verified, and what intergovernmental coordination is required to facilitate the verification of BO data submitted to the LBR.
12. In addition to the affidavit approach commonly used in Liberia, feedback mechanisms should be incorporated into the public register that allows all users to report suspected inaccuracies and protects the identities of users who report such discrepancies.
Principle 8: Up-to-date and auditable
13. In addition to initial disclosure, the LBR should (in its BO regulations) require disclosing entities to update their BO disclosures within a prescribed period of becoming aware of such a change, and on an annual basis when annual returns are filed. [Implementable within 12 months]
14. The LBR should retain and publish information regarding changes in a company’s beneficial owners. A series of beneficial ownership declarations should contain a reproducible audit trail of changes made over time.
Principle 9: Sanctions and enforcement
15. The planned BO regulations should specify sanctions (monetary and non-monetary) that are effective, proportionate and enforceable for non-compliance with disclosure requirements, including non-submission, late submission, incomplete submission, or false submission. [Implementable within 12 months]