Illicit financial flows related to money laundering, corruption, financing of terrorism, tax evasion, and other abuses have dire effects on countries and societies. They foster and finance violence and crime, diminish state revenues, affect citizens’ basic human rights, and undermine the rule of law and trust in institutions, especially the sense of justice and equality. 

While several factors may result in and encourage illicit financial flows, one of the main elements relates to secrecy, which prevents the authorities from identifying and prosecuting the individuals responsible. Numerous case studies have shown that corporate vehicles, including companies, trusts, foundations, and fictitious entities, can be misused to conceal the identities of the people involved in large-scale corruption and to hide and transfer the proceeds of crime.

The international agenda on enhancing the transparency of beneficial ownership (BO) has gained significant momentum during the past decade as an essential element in pursuing the fight against corruption, improving the business climate, and avoiding conflicts of interests for politically exposed persons (PEPs), as well as a tool for preventing money laundering, and countering the financing of terrorism and tax evasion. Countries are required by various international standards, including the Financial Action Task Force (FATF) Recommendations, the Extractive Industry Transparency Initiative (EITI), and the Global Forum on Transparency and Exchange of Information for Tax Purposes (the Global Forum), to put in place measures to ensure the transparency of beneficial owners of corporate entities in their jurisdictions.

The 2012 FATF Recommendations 24 and 25 have established international standards and provided important guidance on the transparency of BO, which are complemented by the continuous efforts in the framework of the Global Forum. The EITI has introduced a clear framework for enhancing the transparency of BO in the extractives sector. While the FATF Recommendations allow countries to choose from a range of methods to achieve the necessary access to the BO information, the EITI Standard 2019 require the EITI-implementing countries to establish and maintain a publicly available register of beneficial owners of corporate entities operating in the extractives sector. To comply with these international standards, countries in Asia and the Pacific region have made varying degrees of progress. Kazakhstan, the Kyrgyz Republic, Mongolia, and the Philippines, for instance, are at the early stages of establishing BO registers, at the national or sectoral level, while Indonesia and Armenia have already established BO registries. Other countries are collecting the BO information, either as part of the EITI process or on an ad hoc basis, to ensure that the BO information is available and accessible in a timely manner when required.

In view of the current status and varying degree of progress made by the countries in the Asia and Pacific region in implementing the BO transparency regime in general, and the EITI Standard 2019 in particular, it has been recognised that stakeholders from these countries could benefit from peer learning and guidance from experts on developing a robust legislative framework for BO transparency, including on a good legal definition of BO and reporting obligations of PEPs, effective data collection and verification procedures, oversight of the BO registers, public access to BO registers, effective enforcement mechanisms, and the impact and use of BO data.

The objectives of this workshop were to: a) gather BO practitioners, including Asian Development Bank (ADB) staff, government officials, civil society, and private companies from countries in Asia and the Pacific; b) to showcase the best practices so far, and discuss challenges; and c) to provide peer learning, and exchange experiences. The workshop was co-organised by the Governance Thematic Group of the ADB and the EITI International Secretariat. The workshop served as a follow-up to the ADB and the EITI’s Beneficial Ownership in the Asia and Pacific Regional Workshop held on 19 and 20 March 2019.