Today the European Union took a significant step to make their common market more transparent and to enable greater integrity in business across the region. Officials have agreed upon the 5th EU Anti-Money Laundering Directive, which will require the public disclosure of beneficial ownership information across the EU. This will allow companies, investors and the public to see who ultimately owns or controls companies through public registers of beneficial ownership.

All EU members are joining leading countries including the United Kingdom, Denmark, Kenya, Ghana, Nigeria, Ukraine and Afghanistan in committing to and implementing public registers of beneficial ownership.

B Team Leaders have called for public, open data registers of beneficial ownership information in all jurisdictions. This reflects the demand from business for access to high quality information on company ownership. According to EY’s 2016 Global Fraud Survey, 91 percent of senior executives believe it is important to know the ultimate beneficial ownership of the entities with which they do business. Companies and investors are already starting to act to increase transparency and this agreement will only strengthen their efforts.

“Access to company ownership information is critical for businesses and investors, enhancing their ability to identify and manage risks, develop supply chains with integrity and better allocate capital to worthwhile investments,” said May Miller-Dawkins, Director, Governance, at The B Team, “Quality and open data on company ownership will provide greater reputational and legal certainty in dealings with third parties, protecting business’s ability to enforce contracts and safeguard investments.”

The leadership demonstrated in this directive is a critical step to enabling companies and investors to act with integrity and to preventing harm caused by anonymous shell companies to economy and society.

This change will empower business to efficiently access and use information about those with whom they do business. Open, freely accessible ownership data can facilitate broad scrutiny of information increasing the detection of discrepancies or fraud. In their implementation, Member States should strongly consider the application of open data to their public registers to facilitate access and use of data, as well as to enable verification and visibility of ownership across borders. This includes connecting to other data sets like the global beneficial ownership register OpenOwnership, which The B Team contributed to establishing as part of a consortium of leading transparency organisations. Work led by OpenOwnership around a common data standard for beneficial ownership can help guide countries, which will also help connect their registers to other countries.

Over the long term, these efforts will help build transparent and accessible beneficial ownership information across all jurisdictions, globally. The EU has emerged as a strong leader on this issue and should encourage other countries to follow suit.