The Executive Director of Civil Society Legislative Advocacy Centre (CISLAC), Auwal Ibrahim Musa explained that CISLAC/Transparency International-Nigeria with support from Tax Justice Network – Africa (TJNA) and Open Ownership is piloting a substantive monitoring of the Beneficial Ownership (BO) disclosure commitment of the Federal Government of Nigeria at both the 2016 London AntiCorruption Summit and the Open Government Partnership Initiative.
“Transparency of ownership and control of companies, partnerships, trusts and other legal entities that can hold assets and open bank accounts is critical to the ability to determine where illicit funds are moving to and who is moving them.”
According to him the Nigerian government has marked significant progress in the implementation of the beneficial ownership transparency as indicated by the signing of the Companies and Allied Matters (Amendment) Act 2020 and the ongoing process towards the establishment of a central register for disclosure of all corporate entities in the country that would subsume and complement the beneficial ownership register for extractive sector companies already established by the Nigeria Extractive Industries Transparency Initiative (NEITI) in December, 2019.
While the rapid uptake of BO is significant, the quality, accuracy and utility of the data for its intended purpose of curbing Illicit Financial Flows (IFFs) is dependent on the right legislative framework being in place and the data conforming to the beneficial open data standards (BODS). We have identified some issues that have the capacity to hamper effective implementation of this initiative.
These include the following:
The capacity of the tax and customs authorities, policing and prosecution authorities.
Mandatory clause on beneficial ownership information to be provided when companies are incorporated or trusts registered.
The presence of a mandate to ensure that information provided by any entity is periodically updated and on a regular basis.
Enforcement ability to ensure that information is placed on the publicly accessible platform.
The interoperability of data between government agencies, linked to a central procurement portal as beneficial ownership declarations should be required of all parties entering into government contracts.
Modalities to verify declared information and false declarations should result in robust penalties.
For the purpose of this exercise, CISLAC wants to pose these questions as a guide for the respective responsible institutions to ponder on as we anticipate a credible process of implementing the beneficial ownership disclosure initiative as a measure to ensure accountability in the public fiscal framework in Nigeria in a bid to foster equitable development.
What is the status and quality of the implementation of BO transparency policies in Nigeria?
What are the governance issues affecting the implementation of BO transparency policies in Nigeria?
What are the existing capacity knowledge gaps and what are the existing opportunities for improvement of these capacity gaps?
How effective is the existing or planned beneficial ownership disclosure regime?
What are the lessons learnt, the challenges and the successes in the implementation of BO transparency policies in Nigeria?
These indicators above stated as questions will help to evaluate the existing incountry capacity in respect of two parameters. One part seeks to understand government capacity to implement policies related to beneficial ownership and generally combat corruption and other financial and economic crimes. Tackling corruption and financial crimes should be seen as a multi-agency task that cannot be implemented by only one government institution. Equally, these institutions also need beneficial ownership information in order to efficiently handle the investigation and prosecution of those that hold ultimate responsibility in financial and economic crimes.
It should be made clear that beneficial ownership and more general issue of money laundering is not only a Nigerian or African problem. But as long as inefficiency and the lack of political will to sanitize our systems persist, consequences in the form of terrorism financing, trans-national organized crime, tax evasion and illegal enrichment of politically exposed persons will prevail.
CISLAC seeks advocacy for a verification process that ensures people in the official register are authentic- that is, they are who they say they are; authorized- that is those persons have agreed to be involved in a legal entity; and that all the registered data is valid. Also, the process should be a fully automated information technology system with human supervision that will have access to relevant data, held by national and foreign authorities for cross-checking and advanced analysis and could be managed by NEITI, or another body that has experience with data analytics, such as the Nigerian Financial Intelligence Unit (NFIU) or tax authorities.
There must also be a deployment and approach that clearly defines roles and responsibilities of various relevant stakeholders in defending the system or preventing misuse.
Therefore, CISLAC calls on well-meaning Nigerians, media and all stakeholders to help keep this fire burning, acknowledging that vision leaks when it is not reiterated hence collective voices will matter more.
Auwal Ibrahim Musa (Rafsanjani) is the Executive Director of Civil Society Legislative Advocacy Centre (CISLAC) wrote on the Anticorruption Potential of the Beneficial Ownership