Argentina’s Efforts to Enhance Beneficial Ownership Transparency Yield Positive Results

Combating Corruption and Money Laundering with Beneficial Ownership Requirements

Argentina has made significant strides in implementing beneficial ownership requirements, a crucial step towards ensuring transparency in corporate structures. This move joins a growing list of nations that have committed to disclosing the true owners or controllers of companies and other corporate entities.

Opaque Beneficial Ownership Structures: A Threat to Transparency

According to experts, opaque beneficial ownership structures are often used to conceal wealth and facilitate illegal activities such as money laundering and tax evasion. By establishing a beneficial ownership register, Argentina has taken a crucial step in detecting these activities more effectively.

International Recommendations and Best Practices

The Financial Action Task Force (FATF) Recommendation 24 requires countries to ensure that beneficial ownership information is held by a public body or an alternative mechanism that enables efficient access to the information. Several key takeaways emerged from a recent review of four countries’ experiences in implementing beneficial ownership registers:

• Enabling Environment and Political Commitment: Having an enabling environment and high-level political commitment are vital catalysts for reforms.
• Stakeholder Engagement and International Collaboration: Engaging with various stakeholders and collaborating with international partners has been instrumental in successful register development and launch.

Register Location and Software Solutions

The location of the beneficial ownership register is also a crucial consideration. In Argentina, Colombia, and Ecuador, the tax authority oversees the register, while in Indonesia and Spain, the Ministry of Justice is responsible. The four countries reviewed have adopted custom-built software solutions that emphasize interoperability with existing government systems.

Standardized Formats and Data Exchange

Standardized formats like the Beneficial Ownership Data Standard (BODS) are also crucial for ensuring consistency and enabling seamless data exchange between different registers.

Ensuring Compliance and Accuracy

Increasing compliance in applying sanctions and promoting awareness of disclosure requirements among reporting entities is essential to ensure accurate and up-to-date information in the register. Measuring outcomes remains a challenge, but incorporating financial sustainability considerations into the design and implementation of a new beneficial ownership register is crucial for its long-term effectiveness.

Financial Sustainability

North Macedonia’s beneficial ownership register, for instance, is financially sustained through user fees. The World Bank has been providing technical assistance and sharing knowledge to support countries in implementing beneficial ownership registers.