• Natural Resources for Sustainable Development in Eurasia.


BENEFICIAL OWNERSHIP IN THE EXTRACTIVE INDUSTRIES: global experience versus the case of Azerbaijan

17 MAI, 2021 348

Prepared by Eurasia Extractive Industries Knowledge Hub Expert Group

Summary :

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

initiative.

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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