Nepal Urged to Strengthen Beneficial Ownership Transparency

Introduction

As part of efforts to combat corruption, Nepal has been urged to establish a public registry of beneficial ownership information. This would require companies and other entities to disclose their ultimate owners, making it easier for law enforcement agencies to investigate and prosecute financial crimes.

The Importance of Beneficial Ownership Transparency

According to experts, the vast majority of grand corruption cases involve shell companies and other opaque corporate vehicles. A central registry of beneficial ownership information would help investigators quickly establish who controls a legal entity, allowing for faster and more effective investigations.

• Reduces transaction costs: Nine out of ten senior private sector executives say it is important to know the ultimate beneficial owners of entities with which they do business.
• Enables citizens to monitor public funds: Public access would enable citizens to monitor who benefits from public funds, such as through public procurement contracts or grants awarded in response to the COVID-19 crisis.

Implementation Recommendations

To achieve this, Nepal’s government should make a firm commitment to creating an online public register of beneficial ownership information, with timely and accurate data freely accessible to:

• Law enforcement agencies
• Competent authorities
• The general public

This would require:

• Promoting compliance with the beneficial ownership regime
• Putting in place mechanisms for verifying data
• Implementing effective measures to prevent non-compliance

Expanded Scope of Beneficial Ownership Transparency

Nepal should commit to collecting and publishing beneficial ownership information of all bidders and partners in the public sector, including companies that:

• Participate in public procurement
• Engage in joint public-private partnerships
• Receive state aid
• Enter into natural resources-related contracts

International Cooperation

Nepal should coordinate efforts with other countries to define and implement international norms on beneficial ownership transparency regimes, and initiate a collaborative process to develop a common data format for recording beneficial ownership information.

By implementing these recommendations, Nepal can take a crucial step towards strengthening its beneficial ownership transparency regime, thereby reducing corruption and promoting greater transparency in the public sector.