Estimated Completion, April 2018
May 8, 2017
In the Summit communique, leaders agreed to
“…take steps to eliminate loopholes that allow corruption to thrive through the misuse of these entities, and work, in accordance with national law, to ensure a level playing field between foreign and domestic companies in respect of requirements to provide beneficial ownership information.”
At the Anti-Corruption Summit, the UK committed to “establish a public register of company beneficial ownership information for foreign companies who already own or buy property in the UK, or who bid on central government contracts.” Then-Prime Minister David Cameron said that public registers of beneficial ownership information were the “gold standard”, and every country should ultimately aim to have them.
This commitment was also reiterated in the UK’s Open Government Partnership 2016 – 2018 National Action Plan.
The UK opened a call for evidence on a beneficial ownership register to increase the transparency of overseas investment in property and public contracts in April 2017. The results of the consultation were published in March 2018 – and confirmed that the Government intended to require the overseas companies that win public contracts, rather than those that bid for public contracts, to provide their beneficial ownership information. TI-UK considers this a downgrade of the original commitment, as it will not help to address the risk of corrupt practices during the bidding process.
In the consultation on a draft version of the Registration of Overseas Entities Bill published in July 2018, the Government stated that it was “considering mechanisms including the Contracts Finder Service” to hold this information.
TI-UK calls on the Government to deliver on its original commitment to legislate for a public register of the beneficial owners of all overseas companies that bid for public contracts. The new proposed approach, to collect information only for the overseas companies that win public contracts, creates a perverse timeline of checks in which it is only after contract has been awarded that it will be established whether or not that contract should be awarded. This approach is inefficient, fails to mitigate the risk of collusion between bidders, and could be easily addressed by capturing the beneficial ownership information of all bidders in pre-qualification questionnaires.