Improving Transparency on Beneficial Ownership in Southeast Asia

The availability and accuracy of information on beneficial ownership of legal persons and other arrangements pose significant challenges in Southeast Asia. This hinders effective due diligence and investigations into corruption and money laundering.

Key Findings

Challenges in Beneficial Ownership Information

• Incomplete coverage: Some countries do not have a central registry that includes all types of legal persons, such as partnerships, sole proprietorships, or associations.
• Limited verification: In many cases, the registrar only conducts limited verification of reported information on beneficial ownership.
• Insufficient sanctions: Penalties for late or non-submission of information are often insignificant or not enforced effectively.
• Restricted public access: Information on management, members of the board of commissioners, names and number of shareholders, and initial capital invested is often not accessible to the public.

Progress Made in Collecting Beneficial Ownership Information

Significant progress has been made in collecting and disclosing information on beneficial ownership in Indonesia, Malaysia, and the Philippines. However, further work needs to be done to address current information gaps on beneficial ownership.

Recommendations for Strengthening Reporting Mechanisms

To improve transparency and accountability in Southeast Asia, the following recommendations are developed:

• Legislative definition of ‘beneficial owner’: Adopt a legislative definition that captures the natural person(s) who ultimately owns or controls the legal person or legal arrangement.
• Maintenance of beneficial ownership information onshore: Ensure that legal persons maintain beneficial ownership information onshore and inform state authorities about any changes regarding their beneficial owners.
• Identification and verification of beneficial ownership: Require financial institutions and designated non-financial businesses and professions to take necessary measures to identify and verify the beneficial ownership of their customers.
• Central register of beneficial owners: Consider setting up a central register of the beneficial owners of all registered legal persons and legal arrangements.
• Access to accurate and comprehensive information: Ensure that competent authorities, including anti-corruption, law enforcement, and prosecutorial authorities, have access to accurate and comprehensive information on beneficial ownership.

Implementation of Recommendations

Implementing these recommendations will help improve transparency and accountability in Southeast Asia, enabling more effective due diligence and investigations into corruption and money laundering.