Combating bribery and corruption will remain a top priority for leaders of the G20 countries in 2015, with a particular focus on improving the transparency of beneficial ownership of companies.

Following a two-day summit in Australia this week, the G20 leaders released a new set of principles that sets out concrete measures that G20 countries will take to prevent the misuse of legal persons and legal arrangements for illegal purposes—such as corruption, tax evasion, and money laundering.

These principles, which build on existing international standards set by the Financial Action Task Force, recommend, among other measures, that G20 countries should:

Establish a definition of ‘beneficial owner’ that captures the natural person(s) who ultimately owns or controls the legal person or legal arrangement;

Ensure that legal persons maintain beneficial ownership information onshore and that information is adequate, accurate, and current; and

Ensure that law enforcement, supervisory authorities, and tax authorities have timely access to this beneficial ownership information of both legal persons and legal arrangements, such as through central registries.

G20 leaders further recommended that countries assess both existing and emerging risks associated with beneficial ownership transparency, and to share this information with authorities, financial institutions, designated non-financial institutions, and other jurisdictions, when appropriate.  “Effective and proportionate measures should be taken to mitigate the risks identified,” the principles stated.

G20 leaders further called on countries to require financial institutions to identify and take reasonable measures, including taking into account country risks, to verify the beneficial ownership of their customers. Countries also should effectively supervise these obligations by establishing and enforcing “proportionate and dissuasive sanctions for non-compliance," the principles stated.

As a next step, G20 leaders said each country will commit “to take concrete action and to share in writing steps to be taken to implement these principles and improve the effectiveness of our legal, regulatory and institutional frameworks with respect to beneficial ownership transparency.”

Other Measures

In addition to beneficial ownership transparency, combating bribery also remains a top priority for G20 countries, "including by active participation with the OECD Working Group on Bribery with a view to exploring possible adherence to the OECD Anti-bribery Convention," according to the G20's anti-corruption action plan. "G20 countries also commit to comprehensively and effectively criminalize bribery of domestic and foreign public officials, as well as the solicitation of bribes, establish the liability of legal persons, and enforce such laws through civil and criminal actions."

High-risk sectors will be of particular focus to G20 countries, including extractives, forestry, and construction. In these sectors, G20 countries said they will commit to identify and develop international best practices and promote collective action plans.

Companies can also expect more international cooperation. "In the globalized environment, many corrupt persons through increasingly sophisticated methods seek to exploit international borders to avoid prosecution, or to hide and enjoy the proceeds of corruption," the G20 anti-corruption action plan stated. "In this context, international cooperation, including possible assistance in civil and administrative procedures related to corruption, is essential to the successful investigation, prosecution, and recovery of the proceeds of corruption."

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