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Ukraine

Beneficial Ownership Verification System (UA0061)

Overview

At-a-Glance

Action Plan: Not Attached

Action Plan Cycle: 2016

Status: Inactive

Institutions

Lead Institution: Ministry of Justice.

Support Institution(s): Transparency International Ukraine non governmental organisation.

Policy Areas

Beneficial Ownership, Private Sector

IRM Review

IRM Report: Ukraine End-of-Term Report 2016-2018, Ukraine Mid-Term Report 2016-2018

Starred: No

Early Results: Did Not Change

Design i

Verifiable: Yes

Relevant to OGP Values: Access to Information Technology

Potential Impact:

Implementation i

Completion:

Description

Event: Improvement of the mechanism for verifying information about ultimate beneficial owners.; Implementation timeframe: 2017-2018; Entities responsible: Ministry of Justice; Entities responsible: Transparency International Ukraine non-governmental organisation.; Partners: Implementation of mechanisms to search and display the relations between legal entities and their founders (participants), ultimate beneficial owners (controllers), including ultimate beneficial owners (controllers) of the founder, and heads of legal entities by updating the software for the Unified State Register of Legal Entities, Individual Entrepreneurs and Community Groups.

IRM End of Term Status Summary

5. Improve the ultimate beneficial owners verification system

Commitment Text:

Improvement of the mechanism for verifying information about ultimate beneficial owners.

Expected results: Implementation of mechanisms to search and display the relations between legal entities and their founders (participants), ultimate beneficial owners (controllers), including ultimate beneficial owners (controllers) of the founder, and heads of legal entities by updating the software for the Unified State Register of Legal Entities, Individual Entrepreneurs and Community Groups.

Responsible Institution: Ministry of Justice.

Supporting Institution: Transparency International Ukraine non-governmental organization.

Start date: December 2016..                                     End date: August 2018

Commitment Aim:

This commitment aims to improve the mechanism for verifying information about ultimate beneficial owners of companies. More specifically, this commitment would update the software for the Unified State Register of Legal Entities, Individual Entrepreneurs and Community Groups (hereinafter the United State Register). Doing so would enable better search functions and display the relations among legal entities and their founders (participants), ultimate beneficial owners (controllers)—including ultimate beneficial owners (controllers) of the founder—and heads of legal entities.

Status

Midterm: Limited

On 20 September 2017 the Ministry of Justice issued decree #2941/5. The decree expanded the type of information on ultimate beneficiary owners that was mandatory for submission and publication. Such information included not only the personal name, family name, and patronymic of the ultimate beneficiary owner, but also the citizenship and the residential address. [91] Moreover, to comply with global open data standards, on 18 May 2017, the government adopted regulation #339. [92] This regulation authorizes the transfer of information on beneficial owners to the Global Beneficial Ownership Registry and publication of this information for the general public in an open data format. [93], [94] However, the government did not complete the transfer of the United State Register. The Ministry of Justice had developed draft technical specifications for transferring the data to the global registry and was planning to develop the respective transferring algorithm. As of August 2017, the Ministry of Justice was still updating the software that would help distinguish the information on a founder from the information on a beneficial owner of a legal entity in the United State Register. For more information, please see the 2016–2018 IRM midterm report. [95]

End of term: Limited

The Ministry of Justice reported that it has been working on updating the software. It also planned to introduce mechanisms to search and display the relations among legal entities and their founders (participants), ultimate beneficial owners (controllers)—including ultimate beneficial owners (controllers) of the founder—and heads of legal entities in the new release of the United State Register. [96] According to a representative of the International Renaissance Foundation, a multi-stakeholder group met only once, without any tangible effect. [97] Both the government and civil society note concerns regarding the quality and reliability of the data. [98]

The Ministry of Justice noted that there is no world best practice on verifying information on ultimate beneficial owners. Therefore, when the ministry does develop this verification, it will be an innovation. [99] A civil society expert confirmed that nowhere in the world does there exist a good model of such verification. In this expert’s opinion, only the National Bank can collect up-to-date information and introduce sanctions against those who provide false information. Those sanctions include withdrawing their licenses to conduct banking activities. [100] The Ministry of Justice was finalizing a draft law on the prevention of money laundering, which should improve the mechanism for verification of information about ultimate beneficial owners. [101] Finally, on 29 August 2018 the Ministry of Justice issued decree #2824/5. The decree requires companies to update information about their ultimate beneficial owners every time they make a change to their legal status. Such changes, however, do not include the dissolution of a legal entity. [102] While this marks some progress in disclosing more data on beneficial ownership, there have not been any major mechanisms implemented to verify the data.

Did It Open Government?

Access to Information: Did Not Change

Despite some recent legislative changes, the structure of information in the register remains the same. Also, the government did not introduce an algorithm to search and display relations between ultimate beneficial owners. As such, there have been no improvements to access to information.

Carried Forward?

When this report was written, the government had not made the fourth action plan of Ukraine available. Thus, it is not clear if the government carried this commitment forward. Given the importance of this commitment, the IRM researcher encourages the government to continue efforts to fully implement it.

[91] “The Decree of the Ministry of Justice of Ukraine #2941/5,” the Verkhovna Rada of Ukraine: The Official Web-portal, http://zakon.rada.gov.ua/laws/show/v2941323-17.

[92] “The Regulation of the Cabinet of Ministers of Ukraine on 18 May 2017 #339,” Legislation of Ukraine, the Verkhovna Rada of Ukraine: The Official Web-Portal, http://zakon2.rada.gov.ua/laws/show/339-2017-%D0%BF/paran2#n2.

[93] “Ukraine Has Disclosed Information on Beneficial Owners in Open Data Format,” Transparency International Ukraine, https://ti-ukraine.org/en/news/ukraine-has-disclosed-information-on-the-beneficial-owners-in-the-open-data-format/.

[94] “The Unified State Register of Legal Entities, Individual Entrepreneurs, and Community Groups,” Data.gov.ua, No longer accessible as of February 13, 2019 http://data.gov.ua/passport/73cfe78e-89ef-4f06-b3ab-eb5f16aea237

[95] “Ukraine Mid-Term Report 2016–2018,” Open Government Partnership, https://www.opengovpartnership.org/documents/ukraine-mid-term-report-2016-2018-year-1/.

[96] Natalia Bernatska (Ministry of Justice of Ukraine), email exchange with IRM researcher, 14 September 2018.

[97] Oleksii Orlovskyi (International Renaissance Foundation), interview with IRM researcher, 4 August 2018.

[98] Victor Nestulia (Transparency International Ukraine), interview with IRM researcher, 16 August 2018.

Natalia Bernatska (Ministry of Justice of Ukraine), email exchange with IRM researcher, 14 September 2018.

[99] Ibid.

[100] Victor Nestulia (Transparency International Ukraine), interview with IRM researcher, 16 August 2018.

[101] Natalia Bernatska (Ministry of Justice of Ukraine), email exchange with IRM researcher, 14 September 2018.

[102] “The Decree of the Ministry of Justice of Ukraine #2824/5,” Liga Zakon, http://search.ligazakon.ua/l_doc2.nsf/link1/RE32430.html.


Commitments

  1. Infrastructure Data Portal

    UA0070, 2018, E-Government

  2. Open Standard for e-System

    UA0071, 2018, E-Government

  3. Ensuring Openness and Transparency of Selling Public Assets and Property

    UA0072, 2018, E-Government

  4. Transparency in Public Procurement (Prozorro)

    UA0073, 2018, E-Government

  5. Awarenss Raising About Social and Economic Development

    UA0074, 2018, Aid

  6. e-Calls for Proposals to Support CSOs

    UA0075, 2018, Civic Space

  7. Beneficial Ownership Registry

    UA0076, 2018, Beneficial Ownership

  8. Anti-Corruption Training

    UA0077, 2018, Anti-Corruption Institutions

  9. Publishing Environmental Information

    UA0078, 2018, E-Government

  10. Database of Natural Resources

    UA0079, 2018, E-Government

  11. Interactive Map of Mines

    UA0080, 2018, E-Government

  12. Priority Electronic Services

    UA0081, 2018, Citizenship and Immigration

  13. Online Platform for Executive Bodies and CSOs

    UA0082, 2018, Civic Space

  14. EITI Online Data

    UA0083, 2018, E-Government

  15. Electronic Resources for Education

    UA0084, 2018, E-Government

  16. Online Verification of Education Certificates

    UA0085, 2018, E-Government

  17. Free Access to National Repository for Academic Texts

    UA0086, 2018, E-Government

  18. Administrative Service Decentrilisation and Improvement

    UA0057, 2016, Capacity Building

  19. United State Portal Extension; Electronic Government Information Services Unification; Modern Tools for Electronic Identification

    UA0058, 2016, Capacity Building

  20. System for Entities Performing Government Functions

    UA0059, 2016, Capacity Building

  21. Free Urban Planning Documentation

    UA0060, 2016, E-Government

  22. Beneficial Ownership Verification System

    UA0061, 2016, Beneficial Ownership

  23. CoST Beneficial Ownership Standards

    UA0062, 2016, E-Government

  24. Transpartent Budget System

    UA0063, 2016,

  25. Starred commitment Open Public Procurement

    UA0064, 2016, Capacity Building

  26. Starred commitment Extractive Industries Transparency Initiative

    UA0065, 2016, Extractive Industries

  27. Environmental Public Monitoring

    UA0066, 2016, Environment and Climate

  28. Community Policing System

    UA0067, 2016, Education

  29. Draft Law on Public Consultations

    UA0068, 2016, Legislation & Regulation

  30. Development of E-Democracy.

    UA0069, 2016, Money in Politics

  31. Improve Government Rules on CSO Involvement

    UA0031, 2014, E-Government

  32. Financing of Charities

    UA0032, 2014, Civic Space

  33. Not-For-Profit Status for CSOs

    UA0033, 2014, Civic Space

  34. Public Participation Law

    UA0034, 2014, E-Government

  35. Establishing Rules on Processing Official Information

    UA0035, 2014, E-Government

  36. Access to Urban Planning Documents

    UA0036, 2014, E-Government

  37. Starred commitment Access to Communist-Era Archives

    UA0037, 2014, Legislation & Regulation

  38. Starred commitment Draft Law on Open Data

    UA0038, 2014, Legislation & Regulation

  39. Starred commitment Supervisory Mechanism for the Right to Information

    UA0039, 2014, Legislation & Regulation

  40. Compliance with EITI

    UA0040, 2014, Extractive Industries

  41. Monitoring of Infrastructure Projects

    UA0041, 2014, Anti-Corruption Institutions

  42. Adopt Regional Anti-Corruption Programmes

    UA0042, 2014, Anti-Corruption Institutions

  43. Corruption Risk Assessment Methodology

    UA0043, 2014, Anti-Corruption Institutions

  44. Starred commitment Asset Disclosure on a Single Web Portal

    UA0044, 2014, Asset Disclosure

  45. Law on Administrative Procedure

    UA0045, 2014, Legislation & Regulation

  46. Law on Streamlining Payment of Administrative Fees

    UA0046, 2014, E-Government

  47. Administrative Services Portal

    UA0047, 2014, E-Government

  48. Draft Law on Decentralisation of Administrative Services

    UA0048, 2014, Legislation & Regulation

  49. Draft Law on Social Services

    UA0049, 2014, E-Government

  50. e-Government Laws

    UA0050, 2014, E-Government

  51. Electronic Readiness Assessment

    UA0051, 2014, E-Government

  52. Government Regulations on Open Data

    UA0052, 2014, E-Government

  53. Electronic Democracy Development Roadmap

    UA0053, 2014, E-Government

  54. Open Budget Initiatives

    UA0054, 2014, E-Government

  55. e-Petitions

    UA0055, 2014, E-Government

  56. e-Governance Training for Local Government

    UA0056, 2014, Capacity Building

  57. Laws on Public Participation

    UA0001, 2012, Civic Space

  58. Amendments to the Law on Community Associations

    UA0002, 2012, Civic Space

  59. Amendments to Resolutions on Collaboration with Civil Society

    UA0003, 2012, E-Government

  60. Training for Public Servants on Consultations

    UA0004, 2012, Capacity Building

  61. Harmonisation of Access to Information Laws

    UA0005, 2012, E-Government

  62. By-Laws on Access to Information

    UA0006, 2012, Legislation & Regulation

  63. Guidelines for Classifying Data

    UA0007, 2012, Public Participation

  64. Public Information Recording Systems

    UA0008, 2012, Records Management

  65. Law on Public Broadcasting

    UA0009, 2012, Civic Space

  66. Public Access to Information in State Registers

    UA0010, 2012, E-Government

  67. Starred commitment Extractive Industries Transparency Initiative

    UA0011, 2012, E-Government

  68. Law for Controlling Declarations of Public Servants

    UA0012, 2012, Asset Disclosure

  69. Public Declarations of Officials’ Assets

    UA0013, 2012, Asset Disclosure

  70. Guidelines on Conflicts of Interest

    UA0014, 2012, Conflicts of Interest

  71. Updated Anti-Corruption Laws

    UA0015, 2012, E-Government

  72. Regional Anti-Corruption Programmes

    UA0016, 2012, E-Government

  73. Law on Competitive e-Government Procurement

    UA0017, 2012, E-Government

  74. Starred commitment Administrative Services Reforms

    UA0018, 2012, E-Government

  75. Electronic Access to Administrative Services

    UA0019, 2012, E-Government

  76. Governmental Web Portal of Administrative Services

    UA0020, 2012, E-Government

  77. Administrative Services in a Digital Format

    UA0021, 2012,

  78. Starred commitment Regional Administrative Service Centres

    UA0022, 2012, Public Service Delivery

  79. Programme for Promotion of e-Government

    UA0023, 2012, E-Government

  80. Electronic Collaboration Between Executive Agencies

    UA0024, 2012,

  81. Web-Based Petitions System

    UA0025, 2012,

  82. One Stop Shop for e-Reporting

    UA0026, 2012, E-Government

  83. e-Region Pilot Project

    UA0027, 2012, E-Government

  84. Network of e-Government Practitioners

    UA0028, 2012, Public Participation

  85. Public Libraries as Bridges Towards e-Governance

    UA0029, 2012, E-Government

  86. e-Government Knowledge Management Portal

    UA0030, 2012,