Limit access to the beneficial ownership registry

  • September 26, 2023

The Canadian Bar Association’s Business Law Section, Privacy and Access Law Section and Anti-Corruption Team support the government’s efforts to fight financial crime, they explain in a letter to the Chair of the House of Commons Standing Committee on Industry and Technology regarding Bill C-42. However, they insist this fight must respect the right to privacy and the confidentiality of personal information.

The problem particularly concerns public access to the beneficial ownership registry.

“We recognize that money laundering and terrorist financing pose serious threats to the integrity of the Canadian economy and the security of its residents,” the letter reads. A register of beneficial ownership helps ensure the accuracy of data, which is useful in detecting the use of corporate structures for financial crime. But in the bill’s current form, the registry would be available to the general public, which could disproportionately impact privacy and personal security rights guaranteed by the Canadian Charter of Rights and Freedoms.

“Public disclosure of additional corporate information may deter corruption, money laundering and frustrate the efforts of fraudsters to use sham corporate vehicles for criminal purposes,” write the Sections. “However, it may also increase identity theft (as recently observed in schemes to defraud the government of COVID-19 relief funds) which could undermine the anti-fraud rationale of the registry.”

There are ways of maintaining a balance between public interest and privacy rights, says the CBA submission, pointing to Europe as an example. The European Parliament’s most recent directive on the subject, which dates from last May, reserves access to the registry to persons motivated by a “legitimate interest” such as journalists, researchers and civil society organisations.

The CBA urges the Canadian government to review Bill C-42 to ensure a better balance between the fight against financial crime and the protection of privacy and personal information.