Financial Crime World

Beneficial Ownership Transparency: Uganda’s Achilles Heel in Extractives Governance

The Challenge of Beneficial Ownership Disclosure

As Uganda prepares to release its inaugural Extractive Industries Transparency Initiative (EITI) report in June 2022, the issue of disclosing beneficial ownership by licensed companies has taken center stage. The EITI defines beneficial ownership as the “hidden” owners of a company, common in the extractives sector where real owners are often politically connected or willing to engage in questionable deals for quick profits.

Key Challenges

  • Lack of a publicly accessible cadaster for the oil and gas sector
  • Inadequate laws requiring public identification of beneficial owners
  • Conflicting interests between industry players and government
  • Obscure mining operations

Experts Weigh in on the Need for Legislative Action

Experts argue that Uganda needs standalone legislation on beneficial ownership transparency to address the issue. Nelly Busingye from Publish What You Pay urged for harmonization across all legal frameworks to make the disclosure meaningful.

Proposed Solutions

  • Standalone legislation on beneficial ownership transparency
  • Harmonization of laws and regulations to ensure meaningful disclosure
  • Establishment of a Central Beneficial Ownership Register, similar to Ghana’s model

Uganda Registration Services Bureau (URSB) Takes Action

The URSB is working to amend its laws to require companies to disclose beneficial ownership, as reflected in minutes of a UGEITI meeting held on August 10, 2021. However, NRGI president Suneet Kaimal cautioned that knowing who owns a company is not enough; governments and companies must apply high ethical standards when evaluating the information.

International Best Practices

  • Countries like Ghana have established Central Beneficial Ownership Registers
  • Benchmarking with countries that have implemented successful beneficial ownership systems
  • Collaboration between governments, civil society, and industry stakeholders to promote transparency and accountability