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Written by Jackie Whiting
on June 10, 2022

In May 2022, a delegation of kompany team members traveled to Phoenix, Arizona for the 45th annual conference of the International Association of Commercial Administrators. This marked the first in-person register conference since the start of the pandemic, with representatives from more than 40 jurisdictions across Canada and the United States coming together to address topics like modernization of programs to automation.

 Gone from the agenda were the typical sessions about COVID-19 related impacts that we’ve become so accustomed to over the past 2 years. Instead, attendees collectively reflected on longstanding struggles (such as staffing challenges and budget limitations) and looked ahead to how the future implementation of new legislation will impact the role of registers. 

 If you missed out on this year’s IACA conference, don’t worry. I sat down with kompany’s Senior Regulatory Manager, Ljubinka Slaveska to catch you up on what you may have missed. She summarized some of the key takeaways for those who couldn’t make it - including the highlights from kompany’s own panel discussion, in which she explained the valuable role US registers must play in strengthening the global response against money laundering and anti-terrorist financing. Keep reading to learn more!

Let’s begin by talking about the upcoming implementation of the Corporate Transparency Act. It feels like forever ago that it was first passed by the US Congress.

After years of discussions, modifications, and tweaks, the Corporate Transparency Act enacted by the US Congress, is raising a lot of discussions about the role of corporate registers in the global fight against money laundering and the financing of terrorism. 

Although many questions remain open as to the interplay between the US federal register of beneficial ownership that is yet to be set up and the state-level corporate registers – one thing is clear: the role of business registers globally is changing. They are becoming the backbone of the digital economy and an essential part of the digital infrastructure of a country.

While this topic is still emerging in North America, there were interesting discussions about the depth and breadth of the high-value data set and AML legislation in Europe and how it applies to US and Canadian companies, especially financial institutions and US based global companies, trading and investing cross-border. 

What’s kompany’s perspective on the global role of registers?  

We cannot overstate how essential it is to make US and Canadian companies verifiable worldwide through enabling direct and automated access to the business registers for the purposes of entity verification.

Existing restrictive terms of use of business register information related to so-called “commercial use” are hindering anti-money laundering compliance of European obliged entities, thereby making it significantly harder for US and Canadian small businesses to penetrate new European markets. Entity verification is increasingly being automated to follow the fast pace of moving money, by directly accessing primary source corporate data and feeding the due diligence systems of obliged entities. Bulk data and periodically access data is not fit for purpose, and neither is manually checking register records purely on a website.

If the commercial use of registers is failing us so to say, is there another approach worth proposing?

In addition to private and commercial usage, we as a global community should categorize another type of use of business register data, one for regulatory purposes. This would require live access to company registers to provide audit-proof entity verification data: time-stamped and immutable. This differs significantly from commercial use of data, since entity verification requires real-time data which cannot be reused as it has a half-life of a day.

Did the topic of fraud prevention come up? Seeing as American consumers reported losing more than $5.8 billion to fraud last year, I can imagine the role that registers have to play in fraud prevention would be a hot topic. 

It remains captivating to witness some of the implications related to the scope of powers of the business registrars to query and verify information before it is placed on the register. Business registers across the US states are struggling to deal with bad actors involved in profound business identity theft schemes which involve making unauthorized changes to business records, including addresses and directors and officers. 

Veracity of the data on the register is a prerequisite for the changing role of business registers, and it is important to assess how technology and electronic identity verification schemes can be leveraged to reduce the risk of unauthorized access to company records.

Do you have any other key takeaways you’d like to share?

IACA conferences are always unique and exciting because they never shy away from raising hard questions. For example, this year there were fascinating discussions on so-called legitimately homeless entities.  

It seems that legislation will need to be updated for the age of remote-work and decentralized offices spanning across multiple jurisdictions, and it’s interesting to follow whether and in what way service providers could play a role in filling this gap. 

We assume that it won’t be long before this issue is raised in Europe as well, especially in the context of strict AML legislation which unequivocally requires a physical office address for every legal entity as a critical element to ensure efficient access by the authorities. Timely and efficient communication with businesses will continue to be of the essence – however, we may soon be participating in discussions related to formalizing virtual offices.

Here in Austria during the pandemic, many services - from government to health care - pivoted from their traditionally paper-based approaches to online service. This is staying even as we reopen. So, on the topic of remote - did attendees and speakers share similar stories of this in Canada and the US?

Definitely! US states in particular are making strides in offering remote notarization services, and even blockchain-secure e-apostilles. Transitioning to electronic records is a big part of digitalization and ensuring the security and integrity of documents has been top-of-mind. 

Thank you for sharing some moments from this year’s IACA conference with our readers! Any last points you’d like to share? 

It was great to meet familiar faces in person after almost three years, as well as new people. We remain grateful for the opportunity to come together and discuss the issues that impact us all. The challenges presented regarding business registers dealing with foreign entities once again highlighted the need for cross-jurisdictional cooperation between register offices, and how the private sector can lend support – a point we are particularly passionate about.

And now that we are a part of the Moody’s Analytics family, we will be even more active across North America, and are looking forward to enhancing our long-standing partnerships as well as creating new ones.

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