The OECD’s global forum on transparency and exchange of information for tax purposes has released the first ever beneficial ownership toolkit designed to help governments, particularly in developing countries, comply with international transparency standards
The focus is on the standards ensuring that law enforcement officials have access to reliable information on who the ultimate beneficial owners are behind a company or other legal entity so that criminals can no longer hide their illicit activities behind opaque legal structures.
The toolkit, prepared in partnership with the Inter-American Development Bank, was developed to support global forum members and in particular developing countries, because the current beneficial ownership standard does not provide a specific method for implementing it.
To assist policy makers in assessing different implementation options, the toolkit contains policy considerations that global forum members can use in implementing the legal and supervisory frameworks to identify, collect and maintain the necessary beneficial ownership information.
It covers a variety of issues regarding beneficial ownership. These include the concepts of beneficial owners and ownership, the criteria used to identify them, the importance of the matter for transparency in the financial and non-financial sectors, as well as technical aspects of beneficial ownership requirements, distinguishing between legal persons and legal arrangements (such as trusts), and measures being taken internationally to ensure the availability of information on beneficial ownership.
The toolkit also includes a series of checklists that may be useful in pursuing a specific beneficial ownership framework, and outlines the ways in which the principles on beneficial ownership can play out in practice in global forum peer reviews.
In addition, it outlines why beneficial ownership information is a crucial component of the automatic exchange of information regimes being adopted by jurisdictions around the world.
Pascal Saint-Amans, head of the OECD’s Centre for Tax Policy and Administration, said: ‘Transparency of beneficial ownership information is essential to deterring, detecting and disrupting tax evasion and other financial crimes.
‘The global forum’s standard on beneficial ownership offers jurisdictions flexibility in how they implement the standard to take account of different legal systems and cultures.
‘However, that flexibility can pose challenges particularly to developing countries. This new toolkit is an invaluable new resource to help them find the best approach.’
The OECD says the toolkit is the first practical guide freely available for countries implementing the international tax transparency standards. It will be frequently updated to incorporate new lessons learned from the second-round peer reviews conducted by the global forum, as well as best practices seen and developed by supporting organisations.
Report by Pat Sweet