A month after the leak of the Panama Papers, South Africa has joined the countries that intend to improve their financial transparency and vulnerability to facilitating money laundering and terrorist financing by establishing public beneficial ownership registers.
The leak of the Panama Papers which showed how politicians around the world had employed anonymity in business ownership to hide wealth in tax havens, sparked a renewal in global action and calls from international organisations, for countries to tackle anonymous ownership in business by establishing beneficial ownership registers.
In many countries around the world, Ghana inclusive, the laws allow anonymous companies which is a favoured conduit for hiding and moving money by corrupt politicians and by companies seeking to avoid taxes. Ukraine and the United Kingdom have launched public beneficial ownership registers, while Australia, Netherlands, Norway and several other countries have planned to do same.
South Africa made the commitment in Cape Town May 5, 2016, announcing an action plan inclusive of beneficial ownership registers, at a regional meeting of the Open Government Partnership (OGP) – a multilateral programme which promotes open, transparent and accountable governance.
Ayanda Dlodlo, South Africa’s Deputy Minister for Public Service Administration was quoted saying at the meeting, which attracted over 500 participants from government, business, academia and civil society:
“As the current OGP Steering Committee co-chair and a leader on open government in Africa, South Africa is especially pleased to use this occasion to present a National Action Plan that includes a commitment to create a public beneficial ownership registry, in order to protect the integrity and transparency of the global financial and public procurement systems.”
The decision has been welcomed by several representatives of member civil society organisations of the Financial Transparency Coalition – a network against illicit financial flows.
Denise Dube Mubaiwa, Acting Tax Justice and Extractives Officer of Economic Justice Network of FOCCISA described the decision as “an encouraging announcement, especially because of the commitment to a public register, rather than a register that’s only accessible to the authorities.”