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How a Collaboration Between Open Ownership and GLEIF Will Promote Greater Transparency in Corporate Ownership and Control in Support of a More Secure Financial Landscape

Stephen Abbott Pugh, Head of Technology, Open Ownership, explains why the collaboration with GLEIF has the potential to improve screening processes and enhance support for anti-money laundering (AML), counter-terrorist financing (CTF), customer due diligence and sanctions enforcement efforts globally.

Author: Stephen Abbott Pugh, Head of Technology, Open Ownership

  • Date: 2023-11-07
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A collaboration between GLEIF and Open Ownership has resulted in Legal Entity Identifiers (LEIs) being integrated into datasets produced in line with the Beneficial Ownership Data Standard for the first time. How will data users benefit from integrating the LEI into the Open Ownership Register?

The Open Ownership Register is a demonstration tool showing how international beneficial ownership data can be better understood and utilized once it is mapped and transformed in line with the Beneficial Ownership Data Standard. Open Ownership uses open data from the UK, Denmark, and Slovakia to power the tool and reconcile the data with OpenCorporates’ database to add global value and deduplicate entries.

Now, thanks to GLEIF’s mapping of the LEI to the OpenCorporates ID, we have incorporated LEIs where entities have an OpenCorporates ID mapped to their LEIs. With LEIs embedded within Open Ownership beneficial ownership datasets, the potential exists for those datasets to be mapped to any dataset from any data provider globally. This will improve the speed and ease with which this data can be utilized as part of manual or automated processes to check company data.

Today, data users can freely download and reuse high-quality, beneficial ownership data, including LEIs, associated with more than 150,000 entities. This crucial subset of the 9m+ entities featured in Open Ownership datasets will continue to grow as more entities sign up for LEIs or receive OpenCorporates IDs, weaving beneficial ownership data into a richer web of legal entity information.

The availability of reliable identifiers for companies and other corporate vehicles in beneficial ownership datasets is essential to facilitate connections with other information. Higher-quality international beneficial ownership data is crucial to reduce risks such as corruption and tax evasion and to build trust and development opportunities. By adding LEIs to our datasets alongside OpenCorporates IDs, Open Ownership is helping data users worldwide.

The quality of available data is the foundation to combat illicit finance. Why is beneficial ownership data crucial to enhance sanctions and anti-money laundering screening?

One of Open Ownership’s guiding principles is that producing high-quality, structured, beneficial ownership data allows it to be more easily analyzed and linked with other datasets. This enhances its ability to expose transnational networks of illicit financial flows and support effective and timely due diligence.

Sanctions screening has become increasingly challenging given the pace with which new sanctions have been imposed on individuals and companies since Russia invaded Ukraine in 2022. By using the most up-to-date and comprehensive data, companies and individuals can seek to avoid doing business with sanctioned entities by better understanding their networks and how they appear in beneficial ownership chains.

As outlined, this open data initiative is an important step toward addressing financial crime. What are the most critical issues it is helping to tackle?

Exposing and then analyzing beneficial ownership information is widely recognized as an essential part of the process of tackling corruption, preventing and investigating tax evasion, protecting national security, and creating sustainable trading environments. Worldwide inequalities in wealth and power are exacerbated by those who seek to use international corporate structures to conceal their activities for illegal or illicit purposes. Beneficial ownership transparency can help global actors to fight economic crime by tackling this abuse.

What progress has been made since the mapping partnership started?

At Open Ownership, we refresh our beneficial ownership datasets regularly, and each time we do, we leverage the growing datasets from OpenCorporates and GLEIF to enrich our data, offering LEIs for an increasing number of entities. Our team is close to publishing technical guidance for beneficial ownership implementers on the importance of using reliable identifiers when releasing data, and this guidance recommends the use of the LEI. Data analysts and developers from Open Ownership have also examined GLEIF’s processes relating to change over time in LEI data. They are using learnings from this to improve how we republish GLEIF’s data in line with our data standard, as well as testing future development plans that we have for version 0.4 of the standard.

What long-term potential do you see for open data collaborations?

Creating and connecting open data on legal entities helps shed light on how the global economy is structured and how well it works. This can bring significant value to a wide range of government, civil society, and private sector data users.

When beneficial ownership information is released as public open data, it can be combined with other types of corporate open data, from basic information to sanctions data and securities listings. Even in jurisdictions where the use of beneficial ownership data is reserved for governments, competent authorities, or other non-public use cases, open data - especially global datasets - can provide invaluable insights and additional avenues for exploration relating to individuals or corporate vehicles appearing in beneficial ownership disclosures.

Recently, a joint initiative between GLEIF, Open Ownership, and Open Sanctions was recognized in the shortlist for the G20 TechSprint 2023. Can you briefly describe the goal of the ‘Transparency Fabric’ and your role within it?

The Transparency Fabric project combines high-quality open legal entity, beneficial ownership, and sanctions data and maps it to additional information - thanks to LEI mappings. This demonstrates how to easily develop a detailed understanding of the rich web of information relating to corporate structures. The project showed how this level of interconnectivity between datasets could shed valuable light on obscured connections between sanctioned individuals or companies and wider corporate networks.

Open Ownership’s beneficial ownership datasets were leveraged as part of the Transparency Fabric solution, and our developer team also carried out separate work to offer the LEIs mapped to OpenCorporates IDs within our own datasets. As a result, anyone can use the LEI or OpenCorporates IDs to connect our high-quality, beneficial ownership data with other datasets from all over the world. This will improve the quality of available data and reduce friction regarding cross-border payments.

How will removing barriers to standardized data sharing lead to addressing financial crime?

The international exchange of beneficial ownership information or data is fragmented. This was identified in 2021 by the Financial Action Task Force (FATF) as one of the leading causes of friction when it comes to checks relating to anti-money laundering and combating the financing of terrorism.

Improving the quality, usability, standardization, and interoperability of beneficial ownership data will speed up the time it takes for financial crime fighters to get hold of the crucial information they need for their investigations. At present, international bodies such as the European Union, United Nations (UN), and the FATF do not recommend or mandate particular standards for guaranteeing interoperability and standardization of beneficial ownership information produced by countries. If such bodies move to do so in the future, then existing organizations, such as the Egmont Group, could supercharge these efforts and dramatically reduce the time it takes to share beneficial ownership data as part of cross-jurisdictional investigations.

What future plans does Open Ownership have?

Since 2017, Open Ownership has worked with almost 40 countries to advance the implementation of beneficial ownership reforms and to support the creation of over 15 new central and sectoral registers. Our growing team will continue to engage with countries worldwide as they seek to implement beneficial ownership reforms.

At the international level, we will continue engaging standards-setting bodies to support the creation of high-quality, standardized beneficial ownership data. These bodies include the FATF, the UN, the World Bank, and the Organization for Economic Co-operation and Development. Our technical team continues developing the Beneficial Ownership Data Standard towards version 0.4, which we will launch in 2024. We are also working to map and transform additional national datasets to add them to the Open Ownership Register, enriching entity data with LEIs wherever possible.

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About the author:

Stephen Abbott Pugh is Open Ownership’s Head of Technology. He looks after the overall technical roadmap for the organization, providing technical assistance to governments with implementing technology reforms to advance beneficial ownership transparency. He is the product owner of the Beneficial Ownership Data Standard and the Open Ownership Register, along with a range of other technical products.

Before joining Open Ownership, Stephen was the content development manager for the Open Knowledge Foundation, leading open data projects, including Open Data Day and Open Data for Tax Justice. He has also worked at Code for Africa, the UK Parliament, and the Guardian. Stephen lives in London, UK, and has previously lived in Rwanda, Tanzania, and Zimbabwe.

Tags for this article:
LEI Mapping, Open Data, LEI Business Case, Data Management, Global Legal Entity Identifier Foundation (GLEIF), Global LEI Index, Know-Your-Customer (KYC)