Why are public registers important to stopping financial secrecy? | Transparency International

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 the Civil Society Legislative Advocacy Centre (CISLAC), which is Transparency International’s chapter in Nigeria, organised a special session at the World Bank and IMF Annual Membership Meetings in Washington, DC to highlight the importance of public registries in the fight against corruption.

The session entitled, Public Registers of Beneficial Ownership: Essential or Overhyped, featured panelists from the IMFOpen OwnershipTax Justice Network and Transparency International Spain.

Grand corruption and anonymous companies

CISLAC, together with international partners, considers publicly accessible registers of true owners of companies, trusts and other commercial entities as an essential tool in the fight against corruption.

According to the World Bank data, more than 70 per cent of grand corruption cases include the use of anonymous companies to move financial assets undetected and without a trace of the true owner — frequently a corrupt public official.

Some modest progress in Nigeria

In Nigeria, the President made a commitment in 2016 to the international community and to the Nigerian pubic to establish a public central register of beneficial owners of companiesHowever, to date, after four years of empty promises, there is no public register in sight.

Despite partial successes in advancing legal framework through the re-enacted Companies and Allied Matters Act (CAMA) to include beneficial ownership reporting by companies and utilization of audit data in the extractive sector by the Nigeria Extractive Industries Transparency Initiative(NEITI) to create a database of oil and gas ownership structures, the nexus between big business and grand corruption in Nigeria is still shrouded in secrecy.

Challenges and limitations in Nigerian law

Meanwhile, some great opportunities in the fight against corruption were lost in recent years. An example is the failure to enact the Proceeds of Crime Act (POCA) in Nigeria. This single act has inexplicably jeopardised the asset recovery effort, which the government championed with great vigour.

Many international partners and domestic stakeholders have expressed concern over the opportunity lost as hundreds of millions of US dollars are awaiting to be returned to Nigeria by the international community.

Without POCA, there is no framework to return such funds in an accountable and transparent way.

What we’re doing

CISLAC, with partners, are a part of international movement, which is urging the World Bank, IMF and other international institutions to raise awareness among political leaders and policymakers about the need for public registers.

Off-shore financial centres, which enable the creation of anonymous companies hidden from law enforcement authorities and others, contribute to gigantic graft and rob taxpayers and citizens of public resources that should instead to access of public services, like health care and education.

In the case of Nigeria, while more than 50, 000 Nigerians enjoy assets worth more than US$1 million, more than 60 per cent of Nigerians live in abject poverty.

Recommendations

While we urge the Nigerian government to create a beneficial ownership registry as promised, CISLAC and partners also call on the international community to support these efforts.

Although the IMF has made critical steps towards addressing corruption in the programming and policy implementation, it can do more to improve beneficial ownership transparency. However, we commend the IMF’s work to develop a methodology for assessing the nature and severity of governance weaknesses and urge the IMF to:

· Develop and implement clear and transparent anti-corruption policy, which will facilitate policy recommendations targeting systemic and coherent anti-corruption and transparency measures.

· Consult civil society in the governance assessment process and in IMF policy responses, particularly in the context of weak institutions, pervasive corruption, the penetration of organized crime into national governance structures and state capture by criminal networks and individual kleptocrats.

· Work jointly with CSOs, governments and development partners especially in areas of i) fiscal governance, ii) public procurement, iii) rule of law, iv) anti-money laundering and combatting facilitation of corruption.

The registers of beneficial ownership are a tool, which can prove decisive in tackling loopholes in all these four areas.

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