A/HRC/44/43
C.
Policy reform to further anti-corruption and business and human rights
objectives
32.
While much anti-corruption reform has focused on criminal and non-criminal
enforcement, allowing for greater investigation and prosecution of bribery and related
offences, policy reform should ensure that implementing commitments to combat
corruption reflects both criminal justice and human rights. 73 Policy reform can promote
stronger respect for human rights as well as prevent corruption. The following examples
highlight policy reform that will further both objectives. These kinds of reforms provide
both transparency and safeguards to address corruption, including in the sectors most open
to abuse, such as the ones discussed above. These reforms were identified by experts and
stakeholders during the Working Group’s consultations.
Beneficial ownership reform
33.
Many shell companies and trusts are registered while the true “beneficial” owner
behind the shell, or corporate veil, is unknown. States and stakeholders have identified the
use of shell companies and trusts as a means for corrupt officials and individuals to hide
their assets and identities. The practice also allows anonymous businesses or individual
investors to avoid liability for human rights abuses connected to a particular business or
project. Shell companies have been connected to modern slavery and human trafficking.74
Reform of beneficial ownership disclosure may help to counter corruption and promote
respect for human rights, primarily by enabling transparency and accountability. This is
because beneficial ownership disclosure rules can be misused to conceal the ownership and
control of illicitly gained assets. Put simply, if one cannot know who is benefiting from an
asset, how can one know whom to bring complaints, or legal cases against, and therefore
seek remedy for harm caused? Similarly, how can one know whom to urge to take
preventive measures?
34.
Beneficial ownership reform would enable public awareness of an asset’s true
owner. During country visits, the Working Group met with communities facing severe
human rights abuses caused by businesses but they did not know who truly controlled the
company. Simply being told the name of a holding or shell company did not enable them to
secure accountability or access remedy. One encouraging element on which to build is the
pledge contained in the 2016 Anti-Corruption Summit communiqué to ensure that accurate
and timely beneficial ownership information is accessible to those with a legitimate need
for it.75
35.
Some States have embarked on combating financial secrecy and ending the
formation of anonymous companies, which is encouraging. The Canada Business
Corporations Act was amended to improve beneficial ownership transparency and
consultations were launched on the possibility of a beneficial ownership public registry.76
The Open Government Partnership’s Beneficial Ownership Leadership Group, initiated by
the United Kingdom, seeks to advance a set of best practice disclosure principles.
Argentina, Armenia, Finland, Kenya, Latvia, Norway, Slovakia and Ukraine have made
formal endorsements with regard to joining. 77 Decision makers and civil society actors
working in human rights should explore links between beneficial ownership reform and the
potential rewards for advocacy, accountability and the advancement of the business and
human rights agenda.
73
74
75
76
77
Contribution from Switzerland.
See https://thefactcoalition.org/fact-sheet-anonymous-companies-and-humantrafficking/?utm_medium=policy-analysis/fact-sheets#_edn8.
See https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_
data/file/522791/FINAL_-_AC_Summit_Communique_-_May_2016.pdf.
See www.ic.gc.ca/eic/site/142.nsf/eng/00001.html.
See www.opengovpartnership.org/policy-area/beneficial-ownership/.
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