Prepared by Eurasia Extractive Industries Knowledge Hub Expert Group
The availability of beneficial ownership information has recently
become a priority on the agenda for global call initiatives. The
international community has stressed that the level of corruption in the
world had reached the threshold that is consistent with threats and
associated the backbone of such an issue with the beneficial ownership
secrecy. Consequently, some 70% of large-scale corruption cases
involve anonymous companies and trusts.
It is noteworthy that beneficial ownership is not a mission of one
organization or agency, for there is a joint agenda incorporating all
leading international institutions and global initiatives. Once dealt with
by the Financial Action Task Force (FATF) only, this initiative is
currently the centerpiece of collaboration involving Transparency
International (TI), Extractive Industries Transparency Initiative (EITI),
Open Government Partnership (OGP), and other organizations.
It comes as no surprise that the memorandum of understanding
was signed between OGP and EITI in 2018 to pool their efforts in the
respective field of activities. Given the broader scope of OGP and the
EITI coverage of extractive economies only, the aforementioned MoU
did not confine beneficial ownership endeavors but instead made them
more inclusive and consistent. The impact potential of the activities
related to beneficial ownership has been significantly enhanced, for the
majority of OGP countries is extractive economies versus the
involvement of most industrialized countries in such a powerful
The scope of beneficial ownership information has extended to
state-owned enterprises, the transparency of contracts in the extractive
industries, issuance of permits and licenses as well as fiscal
transparency and so the countries that have joined both initiatives (OGP
and EITI) count beneficial ownership as an issue of top priority.
Project summary and information about the donor
Gender and beneficial ownership are the two leading priority
issues highlighted in the 2019 OGP annual report.
What is the ongoing status of these issues in Azerbaijan, a longtime
extractive economy? How much is the government willing to
disclose beneficial ownership information, and what kind of efforts
does the government intend to make in that respect?
To start with, the availability of beneficial ownership information is
neither a specific requirement nor a specific duty of a separate country,
for it is an international requirement. In contrast to other commitments,
the availability of beneficial ownership information is in breach of order
if the corresponding registration was conducted offshore, in restricted
or closed areas. Without international initiatives and relevant activities,
it would be very difficult to ensure the availability of beneficial
ownership information in any country. Therefore the receipt of
beneficial ownership information from one or the other country and/or
international organizations is predictable. Secondly, in a majority of
cases, particularly involving developing countries with the focus on
extractive industries, there is not adequate local capacity to achieve
effective outcomes concerning the availability of beneficial ownership
information. Consequently, international cooperation is needed to
identify influential people behind one or the other company.
Thus, both cases prove that beneficial ownership transparency
refers to international activity, so the closer and more the cooperation
between local actors and international agencies, the better the expected
results will be.
Being an extractive economy, Azerbaijan retains an important role
in ensuring the availability and transparency of beneficial ownership, a
major challenge for the general public to address.
The present report reviews the ongoing status of international
activities in the field of beneficial ownership, brings clarity into the
respective guiding principles and requirements, looks into the
corresponding trends on the global scale, and cites certain examples.
The primary objective is to specify possible targets for and subsequent
obstacles in the way of Azerbaijan as regards beneficial ownership,
through the examination of its essence and requirements, as well as
systematic and consistent steps towards ensuring the availability of the
corresponding data and the relevant experience of some countries.
The research results and relevant recommendations presented in
this paper have been developed within the framework of the project
“Disclosure of Beneficiary Ownership is an Important Element of
Transparency in the Extractive Industry”. The project is funded by the
German Marshall Fund.
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