Australia last week joined the ranks of countries that are currently exploring how best to establish a register of the beneficial ownership and control of companies within their borders, with the announcement of a consultation on the matter.
The consultation seeks the views of financial services industry experts and other stakeholders “on the details, scope and implementation of a beneficial ownership register for companies”, according to an announcement on the Australian Treasury’s website.
It says the consultation paper represented a key element of Australia’s first Open Government National Action Plan, published last October after a year in the planning, which committed the government to improve the transparency of information on beneficial ownership and control of companies that is available to relevant authorities.
The consultation document asks for suggestions on: how information should be collected and stored; how to define a beneficial owner with a controlling interest in a company, and those exercising indirect control or ownership; and the expected compliance costs for those who will be affected by the new requirements.
‘Alive to the practical difficulties’
In a note to clients posted on the website of Greenwoods & Herbert Smith Freehills Pty, one of Australia’s best-known specialist tax advisory law firms, website, G&HSF director Andrew White and G&HSF consultant Richard Vann note that the consultation document is “very open-ended and quite alive to the practical difficulties of making any system work”, which they add that it is able to be, since the Financial Action Task Force principles they must follow permit “a significant degree of flexibility” in implementation.
“It discusses definitions of beneficial ownership, outlines current requirements to maintain registers, indicates the commitments Australia has given, and summarises the recently-implemented UK system involving a central public register of ultimate beneficial ownership of companies,” White and Vann write.
“Without any trace of irony the paper notes that, shortly before the Brexit vote, the UK committed as part of the “Euro 5” to set up a system of exchange of information in registers of beneficial ownership.
“Chapter 4 of the consultation paper contains a brief discussion of the practical issues (who, what information, how to record and how to enforce).
“The challenges are formidable but the issue is not going away, so affected parties should give serious thought to providing input.”
Comments are being accepted until 13 March. To read and download the consultation document, click here.