Understanding beneficial ownership data use

Introduction

The extent to which BOT reforms help achieve specific policy goals is dependent on BO information being used effectively. Therefore, it is critical for agencies that design and implement BOT reforms to understand the experiences of users of BO information from central registers, including their perspectives on what enables and hinders effective BO data use. These insights should shape the design, review, and iteration of BOT reforms to ensure they are and remain impactful.

Given that almost a decade has passed since the first jurisdictions started implementing BOT reforms, and an increasing number is following suit, more BO information is available now than ever before. [3] This has created more opportunities for different parties to use BO information and explore whether the reforms are starting to have their intended impact. At the same time, the past few years have seen discussions around BOT increasingly dominated by debates around who should have access to BO information. In particular, the November 2022 Court of Justice of the European Union (EU) judgement mandated the EU to balance transparency with privacy rights by interrogating and justifying for which parties access to BO information is both necessary and proportional to achieve the objective of anti-money laundering (AML). [4] This has contributed to attention being focused on who should have access to BO data rather than what this access should look like in order to enable the effective use of BO information. Access provisions in many jurisdictions have categorised users into government, obliged entities, and others. However, this division is unlikely to reflect how the information is actually used. For example, an FIU analyst may have more in common with an investigative journalist than with a government procurement officer in terms of how they use the information.

Different parties are involved in the implementation of BOT reforms, including policy makers setting objectives; agencies implementing these policies as well as building and administering the BO information systems; individuals complying with disclosure obligations on behalf of legal entities or arrangements; and individuals using BO information for various purposes such as to regulate competition or identify red flags for money laundering. While all these groups actively interact with BO information systems and can be broadly considered users, this research focuses on the last group. In this report, the term users refers to end users of BO information, both in and outside government. Data use refers to how BO information is used (see Glossary).

This report aims to contribute to the knowledge base of what factors lead to effective BOT reforms based on user perspectives. Drawing on interviews with data users, it provides a conceptual framework to understand how BO information is used and what users need to effectively process it. This also helps inform how BOT can be implemented while respecting privacy and data protection requirements by identifying the minimum amount of information and processing needed for different users to achieve their aims. This helps achieve the data protection principle of data minimisation. [5] With this understanding, the report encourages implementing jurisdictions to think beyond who should have access and think about what an evidence-based access regime could look like. This requires developing solutions that ensure users can access the information they need and process it in ways that contribute to achieving certain policy objectives.

In the following sections, this report includes details about its research methodology and findings. It highlights examples and insights from interviews, and concludes with recommendations for those implementing BOT reforms. It also highlights avenues for further research to advance the measurement and documentation of impact to help assess the effectiveness of BO registers in the future.

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