The Importance of Creating a Register of Beneficial Owners in Georgia

Benefits of Creating a Register of Beneficial Owners

Creating a register of beneficial owners is a crucial step towards reducing corruption, promoting transparency, and ensuring accountability in Georgia’s business environment. Here are some key benefits:

• Exposing Corruption: A register of beneficial owners enables journalists and watchdog organizations to uncover corruption-related crimes, bringing perpetrators to justice.
• Reducing Business Risks: By checking with whom they are dealing, businesses can reduce their exposure to risks associated with unknown or unverified ownership structures.
• Easier Investigation and Asset Recovery: Investigative bodies can locate perpetrators and seize stolen money more easily, promoting a fairer and safer business environment.

Steps to Implement the Reform

To successfully implement a register of beneficial owners in Georgia, the following steps should be taken:

• Express Clear Political Will: The Government of Georgia must demonstrate its commitment to creating a register of beneficial owners through clear policy statements.
• Establish a Working Group: A working group comprising civil society organizations, government agencies, and other stakeholders should be formed to develop and implement reforms.
• Seek International Guidance: The responsible body should engage with international organizations that establish standards for openness in beneficial ownership.

Additional Requirements for Success

To ensure the successful introduction of a register of beneficial owners in Georgia, the following requirements must be met:

• Adhere to Open Ownership Principle: The register should adhere to the principle of open ownership, ensuring that all beneficial owners are clearly identified and disclosed.
• Cover Foreign/Non-Resident Companies: The register should include foreign/non-resident companies operating in Georgia to ensure that no loopholes exist for hiding beneficial owners.
• Restrict Access to Budget Funds: Imposing restrictions on access to budget funds for companies with unknown beneficial owners will help prevent corruption and promote transparency.
• Transparency of Joint Stock Company Shareholders: The register should require joint stock companies to disclose their shareholders, promoting transparency and accountability in the business environment.

By following these steps and requirements, Georgia can successfully introduce a register of beneficial owners, reducing corruption risks and promoting a fairer and more transparent business environment.