Shell companies have been put on notice, but there is more to do

Thom Townsend is Executive Director of Open Ownership, which works to drive the global shift towards transparency and accountability in corporate ownership and control.

The recent Financing for Development conference in Seville came at a time of mounting urgency. Global debt is rising, aid is falling, and the long-promised shift from “billions to trillions” in development finance hasn’t materialised.

As policymakers wrestled with how to close the funding gap, one under-reported win stood out: world leaders made new commitments to tackle the abuse of anonymous companies.

The Sevilla Commitment saw U.N. member states pledge to implement high-quality beneficial ownership registers, enhance international data exchange, and explore the feasibility of a global beneficial ownership registry.

It’s the first time a major internationally agreed document has gone this far — and it’s a moment Open Ownership, and others, have long pushed for.

Because the numbers are stark. Each year, countries lose an estimated $3.1 trillion to transnational financial crime and $492 billion to tax abuse — money urgently needed to fund services, pay teachers, build clinics, and deliver development.

In Africa alone, illicit financial flows account for nearly 4% of GDP — almost as much as governments spend on education.

The use of shell companies is rife.

Drug cartels and sex traffickers use them to launder profits. Corrupt politicians from Nigeria, Bangladesh and Argentina - among others - have used them to stash illicit wealth.

In Europe, members of the European Parliament are alleged to have accepted bribes in exchange for doing the bidding of Qatar, with hidden ownership helping to mask the flow of money and gifts. This is a global system - and a global problem.

Progress but it's uneven

That’s why beneficial ownership transparency matters.

Ten years ago, beneficial ownership transparency wasn’t a global priority. That changed with the adoption of the Sustainable Development Goals, which included a target to significantly reduce illicit financial flows; the Panama Papers, which exposed how shell companies enable corruption and tax abuse; and a landmark report chaired by former South African President Thabo Mbeki, which called on countries to establish public registers of company ownership.

Together, they helped put the abuse of anonymous companies firmly on the global policy agenda.

In 2015, Ukraine launched the world’s first beneficial ownership register. Britain and the European Union followed in 2016. In Africa, countries like Nigeria led the way in committing to corporate transparency and implementing registers. Since then, nearly 100 countries — including all 10 of the world’s largest economies — have introduced or are implementing beneficial ownership registers.

At Open Ownership, we’ve provided technical advice and support to around 50 of them. And we’ve seen how well these reforms can work.

In the last decade, beneficial ownership data has helped countries from Britain to Zambia recover lost revenues.

In the UK, the tax gap has fallen from 7.4% to 4.8% in the period since the beneficial ownership register was introduced alongside a number of other measures.

In Zambia, authorities used beneficial ownership data to trace the purchase of helicopters linked to a senior official. Two aircraft worth over $2 million were recovered and frozen, and court proceedings are ongoing.

In Chile, new beneficial ownership requirements in public procurement have already led to a sharp drop in conflict-of-interest cases. It’s proof that when this information is collected and used well, it delivers. Such data has also been critical in responding to global crises. Following Russia’s invasion of Ukraine, authorities across the Britain, the

United States and the EU used beneficial ownership information to rapidly target sanctioned oligarchs.

But progress is uneven - and in some places, slipping backwards. Some jurisdictions are introducing registers but not verifying the data or using it effectively. In too many cases, implementation is treated as a compliance exercise, not a chance to strengthen policy outcomes.

The Sevilla Commitment signals international recognition of the role of beneficial ownership transparency as a tool to support public resource mobilisation.

International commitments like this can help create momentum and show broad recognition of the problem. But real progress will come when governments start seeing this data as a tool to meet their own priorities - from raising revenue and tackling corruption, to improving procurement and protecting public resources.

That’s the focus of our new organisational strategy: helping governments not just collect data, but use it - in tax systems, procurement platforms and criminal investigations.

It means showing how transparency supports national goals and making the case for why this information is worth investing in. It also means working with governments, civil society and business to ensure the data is usable, trusted, and effective.

The emerging evidence is clear: in Britain, it’s supporting more effective tax collection; in Chile, it’s strengthening public procurement; and in Zambia, it’s helping tackle corruption.

Sevilla was a milestone. It reflected - for the first time - UN member states’ recognition that beneficial ownership transparency is a cross-cutting reform that can help deliver everything from better taxation and procurement to fairer trade and cleaner politics.

Now comes the hard part: turning that vision into reality.