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Written by Jackie Whiting
on April 30, 2021

We’ve been keeping busy at kompany this past month, launching several new partnerships with RegTech providers from around the world, including the London-based firm DueDil, as well as RiskScreen and W2GlobalData. As we always say at kompany, compliance is only as effective as the data behind it and we’re proud to enable our latest partners to power their own solutions and services with the strongest foundation of business data possible.

Other news you may have missed this month includes an interview from ComputerWelt. Read along as journalist Klaus Laurel speaks with our CEO Russell E. Perry to discuss digital business models during the pandemic and the importance of digital business verification in the context of a post-covid world. 

You’ll also want to listen to our conversation with Kilian Thalhammer, founder of Payment & Banking and Managing Director at Deutsche Bank as he chats with Russell about the kompany platform, the latest trends in RegTech, and why KYB is only as good as the data behind it.

And finally, before we get to the news from April, we want to remind readers to subscribe to our newsletter. It's the easiest, quickest way to stay up to date with the latest happenings at kompany and the compliance landscape at large. Never miss a story by signing up here!

Now, onto the first story of our April RegTech Roundup. This month’s theme is all about the importance and challenges of determining beneficial ownership. Enjoy!

Cyprus Launches New Registry that Identifies Company Owners

Long considered a money laundering haven by the international community, Cyprus is taking steps to combat its unsavoury reputation by launching a new kind of registry that will require companies operating in the country to disclose their ultimate beneficiaries. 

Acknowledging the critical importance of recording and maintaining accurate and up-to-date information about beneficial owners, the UBO register has been introduced to nearly 2000 Cyprus-based stakeholders so far.

Authorities in the country specify that “anyone having the final ownership, voting rights or sufficient percentage of shares directly or indirectly qualifies as a company’s true owner.”

Although the establishment of such a register has been a requirement in the European Union since the implementation of AMLD4, Cyprus just launched their online register this past March. It will be connected to a centralised platform throughout the EU. Commerce and Energy Minister Natasa Peleido says that “corporate entities have to submit their data within the next 12 months.” 

At first access to the registry will be limited to customs and taxing authorities but the public will eventually have access to the database later next year.

As the execution and maintenance of the registry develops, those who look to exploit the system by hiding illicit operations through complex ownership structures will have more to answer for in Cyprus. 

Australia: Feds junk plans to unmask nominee directors

For our next story, we head to the land down under, Australia, where the goal of establishing a robust beneficial ownership register has encountered a few roadblocks.

“The Morrison government has walked away from plans to unmask nominee directors, a move experts claim will entrench Australia as a safe haven for laundered money and the proceeds of corruption.”

Back in 2016 Australia first committed to introducing a beneficial ownership register and again in 2018 with the hopes that it would be delivered as part of an overhaul of the companies registration database. 

But according to the chief executive of Transparency International Australia, the national chapter of a global anti-corruption and transparency advocate, “the government had no appetite” to fulfil this commitment and “was not open to pursuing it.” 

Serena Lillywhite, the aforementioned chief executive of TIA goes on to explain, “Money laundering in the property sector and more generally is such a huge problem for Australia and this reform would have gone some way to addressing this issue. Knowing who sits behind the wheel and who the real company beneficiaries are is a fundamental step in tackling money laundering and other corporate misconduct.”

While a representative for Senator Jane Hume, the political leader responsible for this particular topic, painted a different, more optimistic picture when pressed on the issue. The spokesman said that Australia remains committed to improving the transparency of information surrounding beneficial ownership and to meeting the standards to fight money laundering and terrorist financing that have been set internationally. 

Transparency International expressed that Australia is missing an opportunity to implement these improvements as part of the government’s “Modernising Business Registers program, which will see the country’s 31 databases brought together under one roof.”

And worthy to note that the pivot away from fulfilling this earlier commitment will seemingly leave the country out of step with the United Kingdom, United States and Canada - each of which have begun taking steps to set up UBO registers across their jurisdictions. 

The rest of the world will certainly keep their eyes on Australia as the situation evolves. One thing is commonly agreed, establishing clear and up-to-date beneficial ownership is a key component to any effective anti-money laundering program.

NGOs Praise Canada's New Corporate Ownership Registry

And for our last story we stay on this month’s theme of beneficial ownership, but head to Canada to examine the recent work that’s been done to establish a UBO registry in the country.

When Canada published its 2021 federal budget two weeks ago, the federal government announced its intentions to establish a public registry of corporate beneficial ownership. The project will have approximately CAD $2 million invested into it over the next two years. 

This investment comes years after the work on the “End Snow-Washing” campaign revealed that anywhere between CAD $46 billion to more than CAD $100 million are being laundered through the Canadian economy every year. In fact, the country’s corporate transparency regulations are some of the weakest among G20 nations, according to Transparency International. 

Everyday Canadians are finding themselves adversely impacted by ineffective corporate transparency, in some cases causing the artificial price inflation of real estate and in other cases, raising the cost of housing by up to five percent, as initially reported by the End Snow-Washing Coalition.

“That’s where the public corporate beneficial ownership registry comes in – a publicly searchable database that takes the anonymity out of corporate ownership, creating a deterrent for those who want to use shell companies to clean their ill gotten gains.”

As outlined in the federal budget, “To catch those who attempt to launder money, evade taxes, or commit other complex financial crimes, law enforcement, tax, and other authorities need access to accurate and up-to-date data on the individuals who own and control corporations.”

That’s it for this month! But before you go…

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