Financial Crime World

Beneficial Ownership Transparency Takes Center Stage in Slovakia

In a significant move hailed by transparency advocates, Slovakia has emerged as one of the first countries to make beneficial ownership information publicly available. The initiative, launched in 2015 for companies participating in public procurement processes, has been a game-changer in the fight against corruption and money laundering.

A Game-Changing Initiative

The Slovakian register now boasts over 11,000 companies and 16,000 owners, making it a valuable resource for civil society organizations to analyze. However, verifying the accuracy of the data provided by companies has proven to be a daunting task, with no official documentation required for filings.

Challenges Faced

  • No official documentation required for filings
  • Initial register not linked to country’s broader business registry

Civil Society Organizations Take Action

By analyzing the available data, civil society organizations in Slovakia have made significant strides in identifying networks of companies with the same beneficial owner(s). This has shed light on potential conflicts of interest and money laundering schemes.

Key Findings

  • One in four companies listed a beneficial owner not previously recorded in the country’s business register
  • Investigations revealed instances of corruption and cronyism, including:
    • A public news agency signing a contract with a company that failed to disclose its beneficial owner
    • Two contracts awarded by a local government found to be shrouded in secrecy

Scrupulous Scrutiny

The register has also been used to scrutinize high-profile deals, such as:

Notable Cases

  • The state-run rail operator involved in a highly criticized 50-year lease of the country’s main train station with a company that had not provided information on its beneficial owner
  • An alleged conflict of interest involving the prime minister, who is listed as one of the beneficial owners of a Czech-based company that received €75 million in EU subsidies for public works contracts

A Precedent for Others to Follow

While challenges remain, Slovakia’s move towards beneficial ownership transparency sets a precedent for other countries to follow suit. As more nations make this information publicly available, the fight against corruption and money laundering will undoubtedly intensify.