Česky

Anticorruption barometer

Monitoring the progress of anticorruption measures in Czech Republic.

Area 5. Abolition of anonymous ownership

	Effectiveness:	22.0%

Justification

Parameters in Area

Subsection 5.1 Abolition of certificated (paper) shares. Justification and sources If paper shares were abolished and replaced by electronic shares, ownership of shares in companies would be put on equal footing with the ownership of other assets, such as immovables or cars. The owner of shares would be registered in a bank which would also record transfers of shares. Within the Czech Republic it would no longer be possible to conceal true owners of companies (providing that trust funds were abolished at the same time). Sources: European Commission: EU Anticorruption Report, Annex Czech Republic, Annex 3, COM(2014) 38 final World Economic Forum, Organised Crime Enablers, 2013 The Economist: Corporate Anonymity - Light and wrong, 21 January 2012 The Economist: Corporate Anonymity - Ultimate Privilege, 21 January 2012 European Central Bank: Market Analysis of Shareholder Transparency Regimes in Europe, 11 February 2011 Anticorruption Endowment / Public Against Corruption: Initiative End to Corruption – Proposal for abolition of anonymous paper shares, 2011, [online] Vondráček, O., Electronic securities – Transparency of Corporate Ownership Structures, Auditorium, 2013 Vondráček, O., Havrda, M., Corruption as a Parasite – Manual How to Combat It, chap. End to paper shares, 2013 More about methodology
		effectiveness	progression
131	#131 Registration of paper shares with banks Registered certificated shares shall be deposited with the banks and be registered on the accounts similarly to paper money when they are being deposited to current accounts; shareholders of Czech companies shall thanks to this measure be traceable as well as holders of current money accounts.	Effectiveness 25%	Progression 90%	More
132	#132 Wire transfers of shares Transfer of shares should take place “by wire transfer”, that is by debiting shares from one account and crediting them to another account.	Effectiveness 25%	Progression 90%	More
Subsection 5.2 Abolition of Trust Funds. Justification and sources If trust funds were abolished, it would no longer be possible to use them for money and asset laundering as allowed as of 1 January 2014 by the new Civil Code. Indeed, if those trust funds were abolished, the easiest way of anonymisation of companies owner would be eliminated. Sources: European Commission: EU Anticorruption Report, Annex Czech Republic, Annex 3, COM(2014) 38 final OECD: Bribery in Public Procurement: Methods, Actors and Counter Measures, OECD Publishing, 2007 Czech Government Anti-corruption Action Plan for 2015 World Economic Forum, Organised Crime Enablers, 2013 The Economist: Corporate Anonymity - Light and wrong, 21 January 2012 The Economist: Corporate Anonymity - Ultimate Privilege, 21 January 2012 Vondráček, O., Havrda, M., Corruption as a Parasite – Manual How to Combat It, chap. No to anonymously owned property, 2013 More about methodology
		effectiveness	progression
133	#133 Abolition of Trust Funds Trustfunds should be abolished or very strictly regulated as far as transparency of beneficiaries, the origin and disposal of assets within the trust fund is concerned.	Effectiveness 50%	Progression 90%	More
Subsection 5.3 Provision of offshore services to the companies using public money Justification and sources If regulation of offshore advisors was put in place and if companies receiving public funds were not allowed to use their services, corruption and conflict-of-interest carried out via anonymous ownership of Czech companies from non-transparent tax havens could be decreased. At the same time siphoning off monies of Czech taxpayers abroad could be reduced. Sources: World Economic Forum, Organised Crime Enablers, 2013 OECD: Bribery in Public Procurement: Methods, Actors and Counter Measures, OECD Publishing, 2007 Lunn, P., Regulatory Policy and Behavioural Economics, OECD Publishing, 2014 Vondráček, O., Electronic securities – Transparency of Corporate Ownership Structures, Auditorium, 2013 Vondráček, O., Havrda, M., Corruption as a Parasite – Manual How to Combat It, chap. Regular line Prague - Seychelles is closing, 2013 More about methodology
		effectiveness	progression
134	#134 Licence for providing offshore services The state shall grant licenses for providing offshore services.	Effectiveness 0%	Progression 10%	More
135	#135 Disclosure of ultimate beneficial owner(s) as a condition for obtaining licence for providing offshore services The condition for receiving the license for providing offshore services should be the disclosure of ultimate beneficial owners of companies applying for the license to provide offshore services and also the continuous monitoring of ownership structures.	Effectiveness 0%	Progression 10%	More
136	#136 Reporting of clients of offshore providers to the state Companies providing offshore services should report all their clients to the state.	Effectiveness 0%	Progression 10%	More
137	#137 Prohibition for companies receiving public funds to use offshore services Companies receiving public funds and companies trading with state or public companies* shoud not be able to use offshore services consisting in concealing their true ultimate beneficial owners. * Companies receiving subsidies, companies carrying out public contracts, including subcontractors, 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.	Effectiveness 0%	Progression 10%	More
138	#138 Identification clients of providers of offshore services Companies providing offshore services should always ask the client company whether it is not a company receiving public funds or a company trading with the state or with public companies. If the response was positive, the company should not be able to receive any offshore services; false statement should be punished by criminal sanctions.	Effectiveness 0%	Progression 10%	More
139	#139 Surveillance over the regulation of provision and use of offshore services The surveillance of the prohibition on use and provision offshore services should be bestowed upon Financial Analytical Unit of the Ministry of Finance or the Czech National Bank or with respect to the advocates to the Chamber of Advocates.	Effectiveness 0%	Progression 10%	More
140	#140 New criminal act consisting in the unlawful provision and use of offshore services New criminal provisions consisting in illegal provision and use of offshore services should be created.	Effectiveness 0%	Progression 10%	More