The Role of Beneficial Ownership Transparency in the Hard Power Era

In the halcyon days of geopolitical stability in 2013, the UK government launched its campaign for raising global standards on beneficial ownership transparency (BOT) during its G8 presidency. One thing that has survived the turmoil in the intervening period is the UK government’s continued, cross-party support for this mission. This campaign has certainly achieved a measure of success, especially domestically, with a much-enhanced Companies House register and the novel introduction of the Register of Overseas Entities for improved property transparency, as the two stand-out achievements.

In a political culture of hyperbole, the UK can genuinely see itself as a global leader in championing – and delivering – BOT but as the UK prepares for its presidency of the G20 next year and the now-G7 in 2028, it cannot look at the state of global progress with great satisfaction.

In August this year, the US government defanged its Corporate Transparency Act by announcing the permanent removal of the requirement for US individuals and businesses to register, in a move which made permanent a 2025 suspension celebrated by President Trump as ending the ‘economic menace’ of BOT. In the EU, the 2022 Court of Justice of the European Union ruling has effectively put an end to public registers, the UK’s policy preference, with focus shifting to a Legitimate Interest Access model. Finally, closer to home for the UK, genuine access to beneficial ownership information in the highest-risk Overseas Territories can be mildly described as suboptimal.

With the tide turning against it, how can the UK find a new argument to support its campaign for BOT to regain its relevance in an era of slipping standards and hard power politics?

A New Register

The anti-corruption framing which has long accompanied BOT advocacy is technically correct and morally justified. It has proven effective in driving significant progress in the UK, especially when viewed through the prism of Russian kleptocrats. The challenge is not the veracity of these arguments but that the BOT argument is now being made in a world focused on hard security choices over development priorities, while integrity-based politics is suffering at the ballot box. With global norms slipping and the Financial Action Task Force not moving its baseline towards a requirement for public registers, the UK risks continuing to play the old classics to an audience which is not listening anymore.

Much as the security crisis of Russia’s full-scale invasion of Ukraine proved to be the catalyst for long-overdue illicit finance reforms in the UK, the next salient framing – both rhetorically and substantially – is identifying and articulating the importance of BOT in supporting the UK and its allies in the ‘space between peace and war’ in which they currently operate, rather than proposing transparency as an intrinsic good.

Hard Power Necessity, Not Only Integrity

Open economies and societies such as the UK face an asymmetric disadvantage in comparison to more closed adversaries as they present a wider attack surface for these adversaries to exploit. This openness is a key feature and benefit of European countries but also requires greater efforts to protect against those who seek to do harm.

As Russian sabotage attacks spread across Europe, opaque ownership over who owns what should be considered as a national security risk rather than simply a concern of anti-corruption campaigners.

Shoots of this argument already exist across Europe with Nordic and Baltic countries taking measures to restrict the rights of Russian citizens to purchase property near Critical National Infrastructure (CNI) sites, or even across the entire country in some circumstances. This is based on fears that the Russian state will use these properties as ‘Trojan horses’ in hybrid or full-scale attacks against Europe. Critically, none of these measures could be successful without understanding who owns what in the first place.

High-quality beneficial ownership information does not just reveal property ownership; it is also crucial for unveiling shell ownership structures of shadow fleet operations, companies linked to the evasion of dual-use controls and even where ownership of CNI itself is at risk.

This is not confined to Russia; clear examples emerge from China too. As detailed by the OCCRP (Organized Crime and Corruption Reporting Project) and others, China’s authority for foreign exchange reserves (SAFE) was able to acquire equity in a range of European assets from fibre-optic companies, natural gas distributors or renewable infrastructure in the UK through a network of seven shell companies registered in the British Virgin Islands, which in turn controlled 28 registered holding companies in Luxembourg. A lack of transparent corporate ownership represents a clear national security risk.

Beyond Russia and China, the irony should not be lost on the US government that it weakened both its own domestic standards and consequently the international norms on BOT in the same month that it declared an economic D-Day on Iran, itself a frequent abuser of corporate secrecy to evade sanctions and the very pressure the US has unleashed.

Deeds over Discourse

So how can BOT improve our national security capabilities? The focus should not merely be on the availability of more data but critically its quality, and the systems built to exploit it. A public register with poor-quality data achieves as little as excellently verified data that is not accessed, analysed and exploited.

Starting at home, the UK government can use the proposed Defence Readiness Bill as the legislative vehicle to plug the remaining gaps in the UK’s beneficial ownership framework such as the role of discretionary trusts. Gaps that are relevant to CNI are especially relevant given its existing prevalence in the Bill. An exercise that separates what legislative gaps exist from the capability gaps in accessing, analysing and exploiting beneficial ownership information from a national security perspective would identify what requires investment rather than statute.

One step removed is the UK’s relationship with its Crown Dependencies (CDs) and Overseas Territories (OTs) that are viewed by many as the soft underbelly of the UK’s BOT campaign. Glacial progress in public registers has resulted in the stop-gap solution, and wonderful acronym, of LIARBOs (Legitimate Interest Access Registers of Beneficial Ownership). LIARBOs are in their infancy but the flaws have already been documented, and after eight years of protracted negotiations since the UK government first pledged public registers in the Overseas Territories, the status quo is likely to be as far as this process will go. This does not mean the UK should reduce its efforts, but with public registers still a mirage, an alternative option – the expansion and more active use of the Exchange of Notes (EoN) concept – that allows for better government-to-government information sharing should be more closely considered.

Ten years on from the original EoN agreement, which allowed for law enforcement agencies in the UK to receive accurate beneficial ownership information on request from their counterparts in the CDs and OTs in a timely and private manner, the 2019 review remains the sole public record of its success. An updated and transparent Exchange of Notes review would provide either the grounds for practical improvements in the arrangements such as direct UK government access to the registers or, in the best-case scenario, a strong footing for the CDs and OTs in the narrative and policy debates they face on BOT. Furthermore, such an intimate government-to-government approach embracing other international financial centre registers that remain closed to public access could be expanded to boost security access to beneficial ownership data and could be integrated into the final leg of the UK’s influence on the international stage via initiatives such as the planned Illicit Finance Summit as well as the upcoming G7 and G20 presidencies.

Given that the UK’s preferred model of public registers is unattainable at present, an EoN model of government-to-government access built on collective security interests may provide a different pathway for continued progress. Expanding the UK’s EoN model with like-minded countries offers the most practical step forward, which might also include creating system-to-system access with the Beneficial Ownership Registers Interconnection System (BORIS), the EU’s interconnected and internal database linking national central beneficial ownership registers.

Whatever the policy direction, recognising that corporate secrecy has become more than a mere criminal threat and is being weaponised would help secure another decade of political support for advancing BOT standards and ensure that access to and analysis and exploitation of accurate beneficial ownership information plays its part in the national security apparatus of the UK and its allies.

© RUSI, 2026.

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