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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

Anti-Corruption, 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. Expand budget transparency system

    UA0087, 2020, Anti-Corruption

  2. Transparency of public assets

    UA0088, 2020, Access to Information

  3. Create general education distance learning system

    UA0089, 2020, E-Government

  4. Open Science

    UA0090, 2020, Access to Information

  5. Online platform for patents and innovation

    UA0091, 2020, Capacity Building

  6. Audit of beneficial ownership register

    UA0092, 2020, Anti-Corruption

  7. Expand uses for e-democracy platform

    UA0093, 2020, Access to Information

  8. Electronic system for transparency in extractive industries

    UA0094, 2020, Anti-Corruption

  9. Establish National Centre for Open Data Competence

    UA0095, 2020, Access to Information

  10. Digital accessibility for persons with disabilities

    UA0096, 2020, E-Government

  11. Increasing youth participation in policy

    UA0097, 2020, Capacity Building

  12. Publish information related to road system

    UA0098, 2020, E-Government

  13. Register for infrastructure contract information

    UA0099, 2020, Anti-Corruption

  14. Publish gender-disaggregated open data

    UA0100, 2020, Access to Information

  15. Infrastructure Data Portal

    UA0070, 2018, Anti-Corruption

  16. Open Standard for e-System

    UA0071, 2018, E-Government

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

    UA0072, 2018, E-Government

  18. Transparency in Public Procurement (Prozorro)

    UA0073, 2018, Access to Information

  19. Awarenss Raising About Social and Economic Development

    UA0074, 2018, Aid

  20. e-Calls for Proposals to Support CSOs

    UA0075, 2018, Civic Space

  21. Beneficial Ownership Registry

    UA0076, 2018, Anti-Corruption

  22. Anti-Corruption Training

    UA0077, 2018, Anti-Corruption

  23. Publishing Environmental Information

    UA0078, 2018, E-Government

  24. Database of Natural Resources

    UA0079, 2018, Access to Information

  25. Interactive Map of Mines

    UA0080, 2018, E-Government

  26. Priority Electronic Services

    UA0081, 2018, Citizenship & Immigration

  27. Online Platform for Executive Bodies and CSOs

    UA0082, 2018, Civic Space

  28. EITI Online Data

    UA0083, 2018, Access to Information

  29. Electronic Resources for Education

    UA0084, 2018, Access to Information

  30. Online Verification of Education Certificates

    UA0085, 2018, E-Government

  31. Free Access to National Repository for Academic Texts

    UA0086, 2018, E-Government

  32. Administrative Service Decentrilisation and Improvement

    UA0057, 2016, Capacity Building

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

    UA0058, 2016, Capacity Building

  34. System for Entities Performing Government Functions

    UA0059, 2016, Anti-Corruption

  35. Free Urban Planning Documentation

    UA0060, 2016, E-Government

  36. Beneficial Ownership Verification System

    UA0061, 2016, Anti-Corruption

  37. CoST Beneficial Ownership Standards

    UA0062, 2016, Anti-Corruption

  38. Transpartent Budget System

    UA0063, 2016,

  39. Starred commitment Open Public Procurement

    UA0064, 2016, Access to Information

  40. Starred commitment Extractive Industries Transparency Initiative

    UA0065, 2016, Anti-Corruption

  41. Environmental Public Monitoring

    UA0066, 2016, Access to Information

  42. Community Policing System

    UA0067, 2016, Education

  43. Draft Law on Public Consultations

    UA0068, 2016, Legislation & Regulation

  44. Development of E-Democracy.

    UA0069, 2016, Anti-Corruption

  45. Improve Government Rules on CSO Involvement

    UA0031, 2014, E-Government

  46. Financing of Charities

    UA0032, 2014, Civic Space

  47. Not-For-Profit Status for CSOs

    UA0033, 2014, Civic Space

  48. Public Participation Law

    UA0034, 2014, E-Government

  49. Establishing Rules on Processing Official Information

    UA0035, 2014, Access to Information

  50. Access to Urban Planning Documents

    UA0036, 2014, E-Government

  51. Starred commitment Access to Communist-Era Archives

    UA0037, 2014, Legislation & Regulation

  52. Starred commitment Draft Law on Open Data

    UA0038, 2014, Access to Information

  53. Starred commitment Supervisory Mechanism for the Right to Information

    UA0039, 2014, Access to Information

  54. Compliance with EITI

    UA0040, 2014, Anti-Corruption

  55. Monitoring of Infrastructure Projects

    UA0041, 2014, Anti-Corruption

  56. Adopt Regional Anti-Corruption Programmes

    UA0042, 2014, Anti-Corruption

  57. Corruption Risk Assessment Methodology

    UA0043, 2014, Anti-Corruption

  58. Starred commitment Asset Disclosure on a Single Web Portal

    UA0044, 2014, Anti-Corruption

  59. Law on Administrative Procedure

    UA0045, 2014, Legislation & Regulation

  60. Law on Streamlining Payment of Administrative Fees

    UA0046, 2014, E-Government

  61. Administrative Services Portal

    UA0047, 2014, Access to Information

  62. Draft Law on Decentralisation of Administrative Services

    UA0048, 2014, Legislation & Regulation

  63. Draft Law on Social Services

    UA0049, 2014, E-Government

  64. e-Government Laws

    UA0050, 2014, E-Government

  65. Electronic Readiness Assessment

    UA0051, 2014, E-Government

  66. Government Regulations on Open Data

    UA0052, 2014, Access to Information

  67. Electronic Democracy Development Roadmap

    UA0053, 2014, Anti-Corruption

  68. Open Budget Initiatives

    UA0054, 2014, Access to Information

  69. e-Petitions

    UA0055, 2014, Access to Justice

  70. e-Governance Training for Local Government

    UA0056, 2014, Capacity Building

  71. Laws on Public Participation

    UA0001, 2012, Civic Space

  72. Amendments to the Law on Community Associations

    UA0002, 2012, Civic Space

  73. Amendments to Resolutions on Collaboration with Civil Society

    UA0003, 2012, E-Government

  74. Training for Public Servants on Consultations

    UA0004, 2012, Capacity Building

  75. Harmonisation of Access to Information Laws

    UA0005, 2012, Access to Information

  76. By-Laws on Access to Information

    UA0006, 2012, Access to Information

  77. Guidelines for Classifying Data

    UA0007, 2012, Public Participation

  78. Public Information Recording Systems

    UA0008, 2012,

  79. Law on Public Broadcasting

    UA0009, 2012, Civic Space

  80. Public Access to Information in State Registers

    UA0010, 2012, E-Government

  81. Starred commitment Extractive Industries Transparency Initiative

    UA0011, 2012, Anti-Corruption

  82. Law for Controlling Declarations of Public Servants

    UA0012, 2012, Anti-Corruption

  83. Public Declarations of Officials’ Assets

    UA0013, 2012, Anti-Corruption

  84. Guidelines on Conflicts of Interest

    UA0014, 2012, Anti-Corruption

  85. Updated Anti-Corruption Laws

    UA0015, 2012, E-Government

  86. Regional Anti-Corruption Programmes

    UA0016, 2012, E-Government

  87. Law on Competitive e-Government Procurement

    UA0017, 2012, Anti-Corruption

  88. Starred commitment Administrative Services Reforms

    UA0018, 2012, E-Government

  89. Electronic Access to Administrative Services

    UA0019, 2012, E-Government

  90. Governmental Web Portal of Administrative Services

    UA0020, 2012, E-Government

  91. Administrative Services in a Digital Format

    UA0021, 2012,

  92. Starred commitment Regional Administrative Service Centres

    UA0022, 2012,

  93. Programme for Promotion of e-Government

    UA0023, 2012, E-Government

  94. Electronic Collaboration Between Executive Agencies

    UA0024, 2012,

  95. Web-Based Petitions System

    UA0025, 2012, E-petitions

  96. One Stop Shop for e-Reporting

    UA0026, 2012, E-Government

  97. e-Region Pilot Project

    UA0027, 2012, E-Government

  98. Network of e-Government Practitioners

    UA0028, 2012, Public Participation

  99. Public Libraries as Bridges Towards e-Governance

    UA0029, 2012, E-Government

  100. e-Government Knowledge Management Portal

    UA0030, 2012,

Open Government Partnership