Ethiopia Moves to Tighten Beneficial Ownership Requirements

Strengthening Transparency and Accountability in the Extractive Industry

As part of its commitment to improve transparency and accountability in the extractive industry, Ethiopia has been working on strengthening its beneficial ownership requirements. This move is aimed at complying with the Extractive Industries Transparency Initiative (EITI) Standard requirement 2.5, which mandates implementing countries to request beneficial ownership information from companies and for these companies to disclose this information.

Background on EITI Standard Requirement 2.5

• Implementing countries are required to request beneficial ownership information from companies.
• Companies are required to disclose their beneficial owners.
• The goal is to promote transparency and accountability in the extractive industry.

Progress Made by Ethiopia

In December 2016, a roadmap outlining the process was published as part of Ethiopia’s efforts to comply with EITI Standard requirement 2.5. A recent scoping study conducted by Ethiopian authorities has examined the country’s legal and institutional framework for beneficial ownership, with a view to ensuring that companies operating in the extractive sector are transparent about their ownership structures.

Key Findings of the Scoping Study

• The study highlighted the need for Ethiopia to strengthen its legal framework and institutional capacity to ensure effective implementation of beneficial ownership requirements.
• Requiring companies to disclose their beneficial owners will help prevent illicit financial flows and promote good governance in the sector.

Challenges Ahead

While progress has been made, there are still challenges that need to be addressed. The country must continue to work on strengthening its legal framework and institutional capacity to ensure effective implementation of beneficial ownership requirements.

Conclusion

Ethiopia’s efforts to strengthen beneficial ownership requirements are a step in the right direction towards promoting transparency and accountability in the extractive industry. By ensuring that companies operating in the sector are transparent about their ownership structures, the government can help prevent corruption and illicit financial flows, ultimately benefiting the country and its people.