In the fight against corruption, Ukraine has stepped up to be the first country to launch a public register of politically exposed persons (PEP) created by civil society. The impetus for this database emerged in 2014, spearheaded by national NGO Anticorruption Action Center (AntAC), in response to Ukranian kleptocracy which siphoned off billions from the national budget to foreign banks. Enhanced due diligence of financial transactions carried out by individuals in high profile political, or otherwise influential roles can assist in curtailing the corruption faced by many countries with weak accountability mechanisms.
At AntAC, a team of technical staff and software developers diligently worked on quality control, data collection and consolidation to create a free database available to banks and financial institutions as well as the general public. The information collected includes – among career and personal affiliations – income and expenditure, assets, liabilities, gifts, real estate and vehicles of politically exposed persons. With financial support from multiple donors, AntAC has led an impressive effort in launching a beta version in 2015 and onboarding banks. In subsequent years, the PEP database has integrated half a dozen data sources and polished methodology, resulting in a registry detailing over 40,000 individual profiles and over 15,000 legal entities.
The Global Forum on Asset Recovery (GFAR) held at the World Bank in December 2017 provided AntAC a platform to share its unique experience of developing a nationwide database of politically exposed persons. A panel of civil society organizations from different countries engaged in a rich debate on the feasibility and upkeep of such a repository of information.
Although AntAC developed open source software, it is difficult to replicate elsewhere. Challenges to implement a similar source of verifiable data could range from differing legislation on personal data protection, existing data sources and anti-money laundering regulations, to technological capacity of creating and updating profiles from disparate data sources.
In Ukraine, information on individuals and enterprises can be obtained through various data sources available in open data format such as asset declarations, the registry of companies and registry of significant shareholders and registry of court decisions. In compliance with Ukrainian and international laws, AntAC has determined who qualifies as a politically exposed person and a “relevant associate”, and how an official’s status in the database changes upon resignation from public office. Lack of standardized open data formats for similar personally identifiable information (PII) and different data protection laws across countries will also hinder their ability to develop a comparable database.
In addition, the Ukrainian register of politically exposed persons is maintained in two languages: Ukrainian and English. English translations are a requirement to allow access to international financial institutions and banks. The maintenance of multiple languages can be difficult, especially for countries with multiple official languages.
The engagement initiated through GFAR allowed Transparency International Sri Lanka (TISL) to brainstorm ideas with AntAC on how such a register could be introduced in Sri Lanka. TISL launched its database on November 26th, 2019 with a promising start of more than 2,000 individual profiles encompassing senior politicians, senior public officials, military officers, judges and senior executives of State-Owned Enterprises (SOEs). Whilst legislation regarding access to public information on PEPs exists in most countries, Sri Lanka does not have a local definition of PEPs. Therefore, TISL adhered to the universal definition of PEPs under the Financial Action Task Force (FATF) Recommendations 12. Similarly to AntAC’s database, TISL’s website does not remove any profiles after PEPs cease to hold public positions, but changes their status to “former” category.
This is the only public database in Sri Lanka which maps out the web of SOEs and identifies their senior executives and subsidiary structure. The database also includes information on politically exposed persons at the local level, who are generally not captured in great detail, including municipal commissioners and the heads of local government authorities.
One of the key challenges faced by TISL was the legal prohibition on the public disclosure of asset and liabilities’ declarations of public officers. The information published on the database was collated using publicly available sources and through the submission of 88 ‘Right to Information’ applications. TISL also conducted a media campaign and discussions focused on informing the general public on politically exposed persons and the need for enhanced transparency of their actions.
In developing the database, TISL reached out to AntAC multiple times for their input on how to navigate challenges in gathering data, the resources required to maintain the database with novel data, and maintaining the importance of data security. Feedback from AntAC was extremely useful in the development of the PEP database specific to the Sri Lankan context.
To that end, Sri Lanka’s non-governmental organizations may be the first to appreciate the value of Ukrainian civil society’s hard work in producing a PEP database which holds public officials and businesses accountable, but other countries such as Serbia, Moldova, Macedonia, Croatia, and Russia have taken note and have created or are actively working on similar projects.
We would like to thank Dmitry Chaplinsky (Independent Consultant) and Maheshi Herat (Transparency International Sri Lanka) for their valuable contributions for this spotlight piece