Who Owns What? A Path to Business Transparency in Haiti
While Haiti struggles to form a stable transitional government amidst corruption and violence, a debate rages among Haitians, Haitian-Americans, and international partners on the best anti-corruption strategies to rebuild trust and attract crucial foreign investment and aid for economic recovery. One overlooked, but possibly crucial, option has been ‘beneficial ownership.’ This op-ed serves as an introduction to the topic of beneficial ownership, making its history, purpose, and potential for policy reform for Haiti known to those that are unaware.
What is Beneficial Ownership?
The system originated in the late 20th century after G7 nations raised alarms over the increasing severity of financial crime and laundering through anonymous “shell” companies—companies with little known ownership or financial information that act as a cover for questionable transactions. In 1989, the nations formed the Financial Action Task Force to begin the campaign for transparency, culminating in individualized national legislation like the European Union’s Anti-Money Laundering Directives.
Beneficial ownership requires corporations to disclose who owns and benefits from their business operations. Take for instance, Florida Power & Light (FPL), a large American utilities company. With beneficial ownership, the company is required to list the individuals who own, or directly or indirectly control FPL, and who similarly receive the greatest benefit (e.g., shareholder revenue, direct revenue, equity, etc.) from FPL’s operations.
What is it?
Beneficial ownership requires corporations to disclose who owns and benefits from their business operations.
The United States implemented its own Beneficial Ownership program through the Corporate Transparency Act (2021), requiring companies to disclose to the federal government the real names, dates of birth, addresses, and unexpired national ID numbers of their owners alongside the name and address of the company itself. These changes aim to prevent money laundering, financial fraud, tax evasion, corruption, and other white-collar crimes. The United States registers this information as exempt from Freedom of Information Act Requests, meaning the data is exclusive to federal enforcers.
In other instances, beneficial ownership information is paired with or included in regulations requiring corporations to publish anti-corruption or laundering accountability processes. The information can also inform regulators of supply chain vulnerabilities and protections under governance frameworks. These cumulatively force companies to proactively monitor their operations for potential crime. For lower-income countries in Africa, Asia, Latin America, and the Caribbean, beneficial ownership provides an opportunity to build public trust and encourage foreign investment by identifying and holding to account those with the greatest influence in their economies. In Haiti’s case, access to credit and start-up costs remain prohibitive and investor protections are too sparse to encourage foreigners to support Haitian development. Additional transparency is a necessary stopgap for these economic drains. Regulators may release small businesses from bureaucratic holds or invite investors if they know the owners and they are in good standing.
The movement for beneficial ownership has not been stagnant since its introduction. Latin American nations like Trinidad and Tobago and Colombia, and other nations such as Armenia, Nigeria, Cyprus, Ghana, and Kenya have established their own public ownership registries after the 2016 release of the infamous Panama Papers exposed the depth of the international money laundering framework. These legislative achievements are prime examples of how Haiti may institute its own beneficial ownership framework.
The Depth of Corruption in Haiti
Corruption in Haiti is not a secret. Corruption has also implicated the country’s highest public officials going as far back as the Duvaliers. Two former presidents, Martelly and Privert, and dozens of other officials were issued arrest warrants for allegedly misappropriating government property. Several more have been implicated in the embezzlement of hundreds of thousands of dollars from power companies, the misappropriation of millions of dollars’ worth of food for schoolchildren and government fuel stores. The post-2010 earthquake period was riddled with corruption. The ongoing and illicit trade between the Dominican Republic and Haiti produces an estimated $400 million in annual losses to the Haitian government. As a result, since 1998, Haiti has consistently ranked near the bottom of the Transparency International Index and the World Bank Group’s Worldwide Governance Indicators.
Haiti's most notorious recent large-scale embezzlement involved Petrocaribe, a trade agreement with Venezuela. This allowed Haiti to borrow oil with deferred payments (25 years) for domestic investment. Instead, the program went down in flames—literally and figuratively—after Haitians noticed very little results and uncovered a deep, shocking embezzlement scheme that whisked away $2 billion. The protests that followed were prolific, forceful, and internationally recognized for their earnestness and for the government’s extreme response.
Instituting beneficial ownership can publicize the avenues through which corrupt officials launder money, for example, through a construction company whom the official secretly owns or has a significant interest in. These systems are appreciable deterrents for white-collar crimes.
What’s the catch here?
Beneficial ownership is not a cure-all for corruption in Haiti. It requires robust enforcement mechanisms, ardent oversight of data providers and data integrity, proactive and reciprocal intergovernmental cooperation, and an operating judiciary to carry out the law’s provisions. All of these are, as of today, absent or inoperable in Haiti. There will also be a need for assistance from other nations who have experimented with beneficial ownership and can advise Haitian jurists on how to apply these new concepts or regulations to the unaccommodating law.
However, I argue that the possibility ought to remain on the Transitional government’s radar, nonetheless. When the new parliament is sworn in after the proposed elections next year, they will need to rebuild and protect the judiciary, fund and allow public agencies to carry out these functions, and take great care to avoid another collapse. This creates an unmissable opportunity to reform and strengthen Haiti’s governance systems and, finally, strike a considerable blow to Haiti’s historic corruption problem. Without being naïve and overly optimistic, I believe this could be a minor change with cascading benefits for our country.
Haiti Policy House is a not-for-profit institution focusing on Haitian public policy issues. Its research is nonpartisan. Haiti Policy House does not take specific policy positions. Accordingly, all views, positions, and conclusions expressed in this publication should be understood to be solely those of the author(s).
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