Targeted ownership disclosure seen as key to preventing corruption and illicit flows

The IMF’s new working paper argues that centralized beneficial ownership registries are not enough and calls for sector-specific transparency in high-risk areas like public procurement and real estate. By tailoring disclosure rules and improving data sharing, governments can curb corruption, block illicit finance, and strengthen public trust.

The International Monetary Fund’s Legal Department, with contributions from researchers Ivana Rossi, Chady El Khoury, Indulekha Thomas, Luisa Malcherek, and Mohammed Al Janahi, has released a working paper that pushes beneficial ownership transparency to the center of policy debates. The study emphasizes that while many countries are building centralized registries to record the true owners of companies and assets, these mechanisms are not sufficiently responsive to the complex risks embedded in high-stakes sectors such as procurement and real estate. Beneficial ownership, the identification of the natural person who ultimately owns or controls an entity, is framed not as a technical reporting exercise but as a safeguard against corruption, money laundering, tax evasion, and illicit financial flows. By grounding its arguments in the research traditions of global financial governance, the paper portrays transparency as a powerful instrument of statecraft that helps preserve both market integrity and public trust.

Procurement’s Persistent Vulnerabilities

Public procurement is singled out as a sector highly vulnerable to corruption and manipulation. With governments worldwide spending billions of dollars annually on contracts for goods and services, the stakes are enormous. The authors argue that centralized registries, while helpful, often fail to provide procurement agencies with the granular and timely information they need. Bid-rigging, hidden conflicts of interest, and shell companies can thrive when oversight bodies lack immediate access to detailed ownership data. The study highlights examples where requiring suppliers to disclose beneficial ownership information at the bidding stage has disrupted collusive practices, exposed politically connected companies, and leveled the playing field for honest competitors. Far from being an administrative burden, targeted transparency in procurement can save money, foster competition, and strengthen the credibility of public institutions.

Real Estate: A Magnet for Illicit Finance

The real estate sector is depicted as another frontline in the battle for transparency. Across global financial hubs as well as emerging markets, anonymous property acquisitions have long been a favored route for laundering illicit funds or hiding assets from tax authorities. Such practices not only allow criminal actors to thrive but also distort housing markets, driving up prices and pushing ordinary buyers aside. The paper proposes sector-specific measures such as mandatory disclosure of beneficial owners at the point of transaction, stricter scrutiny of foreign buyers, and digital systems that link property registries to geographic data. These mechanisms would expose patterns of suspicious investment and curtail the misuse of property markets. The authors stress that real estate is not simply a luxury asset class but a social good whose accessibility is undermined when secrecy fuels speculative bubbles and criminal infiltration.

The Case for Risk-Based Transparency

Running through the analysis is the insistence that transparency must be calibrated to risk. A one-size-fits-all approach may create unnecessary burdens on low-risk activities while leaving loopholes in areas where the stakes are highest. Instead, disclosure requirements should be tailored to the size, type, and sensitivity of the transaction or contract. A small municipal project does not need the same level of scrutiny as a multibillion-dollar infrastructure deal. Similarly, ordinary residential transactions should not be treated with the same intensity as luxury property purchases made by offshore entities in financial centers. By applying proportionality, governments can maximize the effectiveness of transparency frameworks without undermining efficiency or overwhelming regulators. The paper stresses that this approach requires clear guidelines, political will, and robust enforcement to prevent uneven application.

Building a Future of Targeted Oversight

The final sections of the paper argue that transparency is only as strong as the cooperation and coordination underpinning it. Beneficial ownership data collected in registries must not sit in isolation; it needs to flow seamlessly to procurement portals, land registries, anti-corruption bodies, and financial intelligence units. Interoperability and digital infrastructure are crucial for ensuring that transparency is not fragmented and ineffective. The authors recommend supplementing centralized registries with sectoral frameworks that capture the specific risks of procurement and real estate. This includes lowering disclosure thresholds for politically exposed persons, mandating real-time ownership declarations for sensitive contracts, and tightening rules around property acquisitions in risk-prone markets. At the international level, harmonizing standards and accelerating cross-border data exchange are crucial to shutting down the exploitation of complex and opaque ownership structures.

Ultimately, the IMF’s analysis underscores that beneficial ownership is no longer a niche issue for compliance experts but a cornerstone of modern governance. By exposing the real people behind companies and assets, governments can confront corruption, safeguard fiscal integrity, and restore faith in public institutions. Targeted transparency, especially in procurement and real estate, represents not just a defensive measure against abuse but a proactive strategy for fairer, more accountable markets. The paper leaves no doubt that without reforms tailored to high-risk sectors, the promise of beneficial ownership transparency will remain only partially fulfilled, leaving open dangerous loopholes for those determined to exploit the shadows.