Statement from the Open Spending EU Coalition. Attack on Ukraine and the Urgent Steps to be Taken for Effective Support.

In view of Russia’s military action against the Ukrainian people, being concerned about ensuring that European funds are spent as effectively as possible and in order to facilitate monitoring of the activities of sanctioned individuals and their associates:

  • We call on the European Union and its Member States to take urgent steps to increase the transparency of spending of public funds,
  • We demand immediate action to deliver long-promised and genuine transparency of Beneficial and Company Ownership Registries.

The European Union has shown in recent days its ability to take joint action to defend democracy and to stand up for the values that accompany it, demonstrating its collective strength. There are many challenges facing the public in relation to the current circumstances and how the situation in Ukraine and Europe will develop. We must make the EU even stronger and more resistant to corruption, the misuse of its funds and the penetration of its economy by sanctioned persons and institutions. We must ensure that EU funds spent inside and outside its borders are used in an effective way that meets real needs. We must protect against misuse and theft as these funds are distributed. Journalists and civil society organisations must have effective means of supporting the public authorities and law enforcement in tracing Russian capital. We cannot allow ill-conceived privacy or cost arguments, nor economic interests to prevent this. The Union has put forward multiple Directives to make beneficial and company ownership more transparent, but in practice implementation at the EU and national level is falling short.

The Open Spending Coalition has a series of concrete recommendations for measures that can be taken immediately, at a minimal cost. These can be divided into those for which the will to change existing practice is sufficient and those that require changes to legislation.

Change of practice:

  • Full publication of beneficial ownership registers under the Anti-Money Laundering Directive: All Member States should comply with their obligations under the Anti-Money Laundering Directive and establish centralised, publicly-accessible beneficial ownership registers for companies as soon as possible.
  • We call on Member States to commit to true transparency and to act immediately to go beyond the existing minimum requirements and to open up beneficial ownership and company registration information with free access to fully searchable databases with reuse permitted.
  • User-friendly, accessible information across the entire procurement process by European governments from the planning, to the tender and award of contracts, to their delivery. Governments should plan and deliver contracts involving relevant stakeholders throughout the process so that the best outcomes can be designed into public contracting from the start.

Legislative changes:

We call on the Commission to urgently adopt the solutions that the European Parliament has recommended in its Resolution of 24 November 2021 on the revision of the Financial Regulation in view of the entry into force of the 2021-2027 multiannual financial framework, and which are described in points 19, 21 and 23, to achieve:

  • Proactive publication of information on national and EU level spending of funds: There should be mandatory proactive publication of comprehensive and detailed information on the planning, spending and oversight of funds at national and EU level.
  • A central and interconnected public portal where this information on spending, including a listing of all beneficiaries, is proactively published in open data and interoperable with other public datasets.
  • Compulsory use of European Commission data-mining tool: All Member States should use the data-mining tool ARACHNE, which should be interoperable with other public datasets.

Immediate implementation of the Open Data Directive by adopting the much-delayed Implementing Act on High-Value Datasets to achieve:

  • Full publication of company ownership information under the Open Data Directive: The Implementing Act on high-value datasets under the Open Data Directive should require full and free publication of companies and company ownership information, under a genuinely open licence without additional restrictions.

Although some of these tasks require slight changes in several regulations (implementation of the Act on high-value datasets, or imposing stronger transparency requirements in Financial Regulation), they should be considered as components of a comprehensive system. Organisations dealing with transparency of expenditure, company, and beneficial ownership have the competence, and knowledge of practical solutions to achieve this. Politicians and other officials now have a special responsibility to put them into action.