Legal Review and Roadmap for Beneficial Ownership in Armenia’s Extractives Sector
Knowing who controls a corporate vehicle is an important starting point in efforts to fight corruption. If a company’s share capital is available on a register of members, and it is owned by an individual, then ownership is easy to determine. However, if share capital is owned by another vehicle in an off-shore location that does not disclose the owner of the shares, determining who owns and therefore controls the company becomes much more problematic.
Another of Square Circle’s suite of projects working within the Extractive Industries Transparency Initiative (EITI) framework, this project reviewed provisions for beneficial ownership’s disclosure in Armenia’s extractives sector and set out a Beneficial Ownership Roadmap for Armenia EITI.
The Armenia Beneficial Ownership Roadmap draws on international examples and local experiences in order to facilitate a definition of beneficial ownership that could be included in the Armenian mining code. Substantive impacts that came from our review included refining and amending the Mining Code as well as workshops, education and outreach on the proposed new legislation across the various sectors involved in Armenia’s extractive industries. Armenia’s Beneficial Ownership Roadmap now provides a platform for expanding and strengthening transparency in the country’s extractives sector.
A ‘beneficial owner’ is the natural person(s) who directly or indirectly ultimately owns or controls the legal entity.
A politically exposed person is considered a beneficial owner irrespective of the level and extent of ownership or control.