Česky

Anticorruption barometer

Transparent and effective public investment — #115 Transparent ownership structure of companies receiving public funds

Ultimate beneficial owners of companies that won the public procurement tender, including their subcontractors, should be fully disclosed. *

* Companies receiving subsidies, companies carrying out public contracts, including sub-contractors, companies which buy or sell something to the state or which rent to or lease something from the state and finally companies which contract with state owned enterprises or companies in situations where those companies provide public service.

If final ultimate beneficial owners of companies receiving public funds (including their sub-contractors), shall be disclosed, it would not be possible that those who decide about granting of public funds could own companies receiving those public funds without any risk of being revealed or punished.

Sources:

Czech Government Anti-corruption Conception for years 2015 - 2017, Chapter 2.1.2., p. 6
Report of the European Commission on the fight against corruption in the EU, Annex Czech Republic, Annex 3, COM(2014) 38 final, p. 8 – 9
Czech Government Anti-corruption Action Plan for 2015, chap. 3, p. 13
Transparency International: Curbing Corruption in Public Procurement, A Practical Guide, 2014, p. 15 and 20
Frank Bold: Governance, transparency and public participation in transport infrastructure Projects, 2014, p. 33
Public Money and Corruption Risks – A Comparative Analysis, Frank Bold, 2013, p. 31 - 39, 77 – 78
Revealing corporate structures of public contractors, Centre for Applied Economy of the Institute of Economic Studies (Charles University in Prague), October 2013
Transparency International: Corruption risks in the Visegrad Countries – Visegrad Integrity System Study, 2012, p. 18
Profitability of firms with paper bearer shares in public procurement, Centre for Applied Economy of the Institute of Economic Studies (Charles University in Prague), 18 May and 30 August 2011
Novotný, J., Lichard, T., Palguta, J., Corruption: Not only a fiscal problem and its solutions) in Kohout, P. andcoll., Collection of texts of a working group for the fight against corruption, National Economic Government Council, June 2011), p. 45
Vondráček, O., Havrda, M., 21 recipes – Anti-corruption cookbook, Recipe 16: Tools against “tailoring” of public procurement contracts, December 2013

More about methodology

Justification and sources

Update history

date	reason	effectiveness	progression
10/2016 current	The disclosure of ultimate beneficial owners of legal persons receiving public contracts is being solved by the new Act on public procurement, which entered into force. In relation to the proposal of the Act on public registers, which is in the Lower Chamber of the Parliament, it is, however, not clear how the corporate ownership of ultimate beneficial owners will be disclosed and evidenced if it is constituted by indirect corporate ownership interests. The disclosure of ultimate beneficial owners companies receiving public funds other than through public contracts falling within the scope of the proposal of the Act on public procurement is not being dealt with.	Effectiveness 75%	Progression 90%	More
04/2016	The disclosure of ultimate beneficial owners of legal persons receiving public contracts is being solved by the new Act on public procurement, which was approved. In relation to the proposal of the Act on public registers, which is in the Lower Chamber of the Parliament, it is, however, not clear how the corporate ownership of ultimate beneficial owners will be disclosed and evidenced if it is constituted by indirect corporate ownership interests. The disclosure of ultimate beneficial owners companies receiving public funds other than through public contracts falling within the scope of the proposal of the Act on public procurement is not being dealt with.	Effectiveness 75%	Progression 80%	More
03/2016	The disclosure of ultimate beneficial owners of legal persons receiving public contracts is being solved by the proposal of the Act on public procurement, which is in the Upper Chamber of the Parliament. In relation to the proposal of the Act on public registers, which is in the Lower Chamber of the Parliament, it is, however, not clear how the corporate ownership of ultimate beneficial owners will be disclosed and evidenced if it is constituted by indirect corporate ownership interests. The disclosure of ultimate beneficial owners companies receiving public funds other than through public contracts falling within the scope of the proposal of the Act on public procurement is not being dealt with.	Effectiveness 75%	Progression 70%	More
10/2015	The disclosure of ultimate beneficial owners of firms receiving public contracts is being dealt with by the proposal of the Act on public procurement, which is in the Lower Chamber of the Parliament, in relation with the proposal of law amending the Act on public registers, which is in the government. However, the disclosure of ultimate beneficial owners companies receiving public funds other than through public contracts falling within the scope of the proposal of the Act on public procurement is not being dealt with.	Effectiveness 75%	Progression 60%	More
09/2015	Both the governmental Action plan and the Conception of the fight against corruption consider the disclosure of ultimate beneficial receiving public funds as a priority task. The registration of ultimate beneficial owners of all companies in the Czech Republic, not only those receiving public funds is to certain extent dealt with by the proposal amending the Act on public registers, currently in the government adoption process, which foresees making available of the identity of final ultimate beneficial owners to the public.	Effectiveness 75%	Progression 50%	More
08/2015	Both the governmental Action plan and the Conception of the fight against corruption consider the disclosure of ultimate beneficial receiving public funds as a priority task. The registration of ultimate beneficial owners of all companies in the Czech Republic, not only those receiving public funds, is to certain extent dealt with by the proposal amending the Act on public registers: this proposal, however, does not foresee making available of the identity of final ultimate beneficial owners to the public.	Effectiveness 50%	Progression 40%	More