REPORT TO CONGRESS ON

BENEFICIAL OWNERSHIP INFORMATION PRACTICES AT THE 

MULTILATERAL DEVELOPMENT BANKS

A Report to Congress 

in response to

SEC. 7029(f) of the Consolidated Appropriations Act, 2018

United States Department of the Treasury

August 2018
Report on Beneficial Ownership Information Practices at the 

Multilateral Development Banks

August 2018

Introduction

The Treasury Department presents this report in compliance with section 7029(f) of the 

Consolidated Appropriations Act, 2018. This report provides an update on the actions that 

multilateral development banks (MDBs) have taken since the previous fiscal year to advance 

disclosure of beneficial ownership information in the MDBs’ own operations.

SEC. 7029(f) BENEFICIAL OWNERSHIP INFORMATION.—The Secretary of the 

Treasury shall instruct the United States executive director of each international 

financial institution to seek to require that such institution collects, verifies, and 

publishes, to the maximum extent practicable, beneficial ownership information 

(excluding proprietary information) for any corporation or limited liability company, 

other than a publicly listed company, that receives funds from any such financial 

institution: Provided, That not later than 45 days after enactment of this Act, the 

Secretary shall submit a report to the Committees on Appropriations on steps taken in 

fiscal year 2017 by the United States executive directors and the international financial 

institutions consistent with this subsection compared to the previous fiscal year.

Below are the updates of the specific beneficial ownership information practices at each of the 

MDBs, highlighting actions taken since the last report, and highlighting efforts by the United 

States’ Executive Directors.

1

Developments in Beneficial Ownership Information Practices in the Multilateral 

Development Banks (MDBs)

International Bank for Reconstruction and Development and the International Development 

Association

The Office of the U.S. Executive Director at the World Bank Group has sought to advance the 

World Bank’s handling of beneficial ownership information collection, verification and 

publication and has worked since the last report to advance United States policy in this area. The

Office of the U.S. Executive Director consistently presses integrity, high quality due diligence 

standards, and information disclosure in all projects.

In part as a result of encouragement from the United States, an important development in the past 

fiscal year is that for its sovereign lending operations (through the International Bank for 

Reconstruction and Development or IBRD, and the International Development Association or 

IDA), the World Bank launched a beneficial ownership data pilot system on November 1, 2017. 

The Office of the U.S. Executive Director organized meetings between the World Bank staff and 

 

1 Please see the 2017 Report on Beneficial Ownership Practices at the Multilateral Development Banks for greater 

context about beneficial ownership: https://www.treasury.gov/resource-center/international/developmentbanks/Documents/Report_to_Congress_on_MDB_Beneficial_Ownership_Practices_August_2017.pdf
Treasury officials in order to describe the pilot. The pilot will cover World Bank fiscal years 

2018 through 2020 (the World Bank fiscal year runs from July 1-June 30), and will collect and 

publish beneficial ownership data for all procurements related to World Bank projects over 

certain thresholds (about 40 percent of Bank procurements by value).2 The World Bank 

Procurement Regulations for Investment Project Financing and the World Bank Standard 

Procurement Documents have been updated to operationalize the pilot and are available on the 

World Bank Procurement external website. 

Under the pilot program, the World Bank’s standard bidding documents have been amended, and 

winning bidders are required to provide beneficial ownership information using a template set by 

the World Bank. The winning bidder will be required to identify beneficial owners using 

thresholds for determining ownership and definitions of control developed by the Financial 

Action Task Force (FATF).3 Borrowers are required to publish beneficial ownership 

information, along with other contract award information, on their websites and the information 

will be published on the World Bank’s website/systems. While this information is not verified

on a routine basis, the World Bank may conduct verification when integrity red flags are 

triggered, or in other cases when extended due diligence is warranted. Online publication is 

important so that interested stakeholders, including local citizens and members of civil society, 

can engage with the World Bank and their respective government on the information in the 

report. The World Bank will review and report to the Board on this pilot in fiscal year 2020, 

before then determining a future direction. 

Although the World Bank is not actually a party to these contracts—the contracts are between 

the borrowing government and the company that wins the procurement bid—the winning 

companies are subject to the World Bank’s anti-fraud and corruption requirements. In addition,

if a company misrepresents beneficial ownership information, this will be considered 

noncompliance and be reported to the Integrity Vice Presidency. The misrepresentation could be 

subject to a fraud investigation and lead to the company’s debarment.

To support increased harmonization with other multilateral development banks (MDBs), the 

World Bank has presented its pilot to the Heads of Procurement of the MDBs, many of whom 

are also exploring options to improve beneficial ownership information reporting.

International Finance Corporation 

The International Finance Corporation (IFC) invests in private sector entities conducting 

business in emerging markets and developing countries. Before it makes an investment, the IFC 

identifies all parties with a substantial interest in the entity. Generally, IFC identifies and 

conducts integrity due diligence (IDD) on those individuals who own or control five percent or 

 

2 These thresholds are longstanding triggers for prior reviews by the Bank procurement team to ensure that the 

borrower is complying with Bank procurement policies. The thresholds are country specific and are an 

approximation by the Bank to determine when a public procurement is considered “significant”. While a prior 

review is being conducted, the borrower cannot proceed with the procurement process until it gets an all-clear from 

the Bank.

3 Following the recommendation of the Financial Action Task Force, a controlling interest is defined as 25 percent 

of voting shares/rights or the right to appoint a majority of the bidder’s board of directors or equivalent governing 

body.
more of an entity, including indirect and beneficial owners, as well as the top five direct owners 

as applicable. If the company is a fund, IFC must also conduct IDD on the general partner or 

fund manager, even if the general partner/fund manager does not meet those thresholds, as well 

as the general partner/fund manager’s direct owners down to the five percent level and top five

owners. 

IFC staff conducts IDD, using various sources, to identify whether there are any integrity risks in 

the project. IFC defines “integrity risk” as the risk of engaging with entities or persons whose 

background or activities may have adverse reputational and, often, financial impact on IFC. 

Portfolio clients are screened daily by a computerized screening system against various 

sanctions, watch, regulatory, and law enforcement lists. IFC’s compliance team periodically 

reviews certain projects to ensure that the IDD process has been properly followed. 

IFC posts project descriptions on its website, which may also include the names of sponsors and 

major shareholders in the company, including some beneficial ownership information, but 

generally does not publish beneficial ownership information.

In the most recent fiscal year (in 2017 and 2018), IFC made a number of improvements to 

strengthen its IDD processes. These improvements include the streamlining and simplification of 

its computerized screening system; efforts to improve data quality; and the introduction of a new 

system for capturing integrity risks and beneficial ownership information. Other improvements 

include enhanced training offerings to staff and enhanced disclosure in Board papers. 

Multilateral Insurance Guarantee Agency

The Multilateral Insurance Guarantee Agency (MIGA) provides political risk insurance and 

credit enhancement guarantees to protect foreign direct investments against political and noncommercial risks in developing countries.

Before it provides a guarantee, MIGA identifies all parties with a substantial interest in the 

project. Generally, MIGA identifies all beneficial owners and conducts integrity due diligence 

(IDD) on those individuals who own or control five percent or more, including indirect and 

beneficial owners, in the project structure. If the company is a fund, MIGA also conducts IDD 

on the general partner or fund manager, even if the general partner/fund manager does not meet 

the five percent threshold, as well as the general partner/fund manager’s direct owners. 

MIGA staff conducts due diligence, using various sources, to identify potential integrity risks in 

the project. MIGA defines “integrity risk” as the risk of engaging with entities or persons whose 

background or activities may present adverse reputational risks for the agency. Portfolio clients 

are screened regularly by a computerized screening system against various international 

sanctions, watch, regulatory, and law enforcement lists. In 2017 and 2018, MIGA enhanced its 

computerized screening system allowing for more efficient and timely monitoring.

MIGA posts project descriptions on its website, which may include the names of sponsors or 

major shareholders (i.e., some beneficial ownership information). In general, however, MIGA

does not publish beneficial ownership information. The Office of the U.S. Executive Director 
continues to review MIGA’s IDD as individual projects are considered for Board approval and 

continues to stay closely engaged with MIGA staff to understand how the recent computerized 

screening system is working in practice. 

European Bank for Reconstruction and Development

Similar to the IFC, the European Bank for Reconstruction and Development (EBRD) invests 

primarily in private sector entities and conducts risk-based IDD on these companies. EBRD staff 

is responsible for collecting and vetting beneficial ownership information based on information 

gathered through site visits, discussions with the client, and general knowledge of the 

region/sector, as well as internet and Bank for International Settlements searches. In some of the 

more complex cases, the EBRD will commission a confidential external due diligence report. It 

will not proceed with a transaction without knowing who the beneficial owners 

are. Additionally, investments that involve politically exposed persons, clients with poor past 

business practices, or other high-risk clients will trigger enhanced IDD. The EBRD publishes 

information on its project partners.

In 2017, the U.S. Executive Director’s office was successful in encouraging the EBRD to add 

language on contract disclosure to its new extractive mining industries strategy. The U.S. 

Executive Director’s office also engaged in general discussions with EBRD Management on the 

requirements in Section 7029(b)(2) of the FY 2018 appropriations act regarding accountability 

and transparency, including the collection, verification and publication of beneficial ownership 

information related to extractive industries.

African Development Bank

The African Development Bank (AfDB) Board of Directors approved a revised 

procurement policy in 2015 that improves the approach to the collection and publication 

of beneficial ownership information. To this end, the AfDB Operations Procurement 

Manual (OPM), which is expected to be publicly available near the end of 2018, is 

expected to include a section on beneficial ownership. In addition, the AfDB has 

developed a guidance note on beneficial ownership and politically exposed persons, 

which is part of the Procurement Toolkit that the AfDB is developing for the 

implementation of its revised procurement policy. The Office of the U.S. Executive 

Director has been closely engaged with AfDB management as the OPM was developed 

and the Office of the U.S. Executive Director will continue to encourage AfDB 

management to roll out the improved manual publicly as soon as possible.

The anticipated guidelines, which have been harmonized with those of the World Bank, will 

require that a successful bidder under an AfDB-financed contract above a specified monetary 

threshold disclose publicly its beneficial owners. Beneficial owners are defined as any 

individual - or closely related individuals - who own or control 25 percent or more of the voting 

shares of the firm. Solicitation and request for proposal documentation, which are currently 

being revised and harmonized with those of the World Bank, will require winning bidders or 

proposers to agree to identify beneficial owner(s), including politically exposed persons. The 

AfDB will consider the failure to provide this information or the provision of incorrect 
information as grounds for misrepresentation that may result in disqualification or other 

appropriate sanctions.

The AfDB also conducts due diligence for non-sovereign entities that it identifies as potential 

partners, taking into consideration the provisions of its Integrity Due Diligence Policy on NonSovereign Operations and other applicable Bank policies and procedures. Specifically, it 

conducts enhanced due diligence to verify and ensure the identification of the source of funds 

being received or to be received by the Bank.

Asian Development Bank

The Asian Development Bank’s (AsDB) requirements related to beneficial ownership 

information focus on its private sector operations. Under AsDB rules, the project team seeks to 

identify one hundred percent of the beneficial ownership of a company. AsDB staff then verifies 

these owners through a desk review of the potential client using Lexis Diligence, World Check, 

Factiva, Dow Jones Risk and Compliance, and various internet search engines. Additionally, 

staff screen potential counterparties against the UN Security Council consolidated sanctions list, 

the Office of Foreign Assets Control (OFAC) Specially Designated Nationals & Blocked Persons 

Lists, as well as other sanctions lists. 

Where there are shareholdings of five percent or more that are not identified or who remain 

unknown, or where shareholdings in publicly listed companies of ten percent or more are not

identified, the Board is informed. In sovereign operations projects where the executing agency 

or implementing agency is not a government ministry or agency, there is also a requirement to 

identify any beneficial owner that is not state owned. 

The Office of the U.S. Executive Director continues to advance United States policy in this area 

at the AsDB and consistently presses for integrity, high due diligence standards and information 

disclosure in all projects. In 2016, the Office of the U.S. Executive Director took a leading role 

in shaping AsDB’s tax integrity policy - a key component of which addresses the issue of 

transparently disclosing beneficial ownership – in addition to encouraging AsDB to provide 

technical assistance to borrower countries on implementing best practices in tax transparency.

Inter-American Development Bank

For the IDB’s sovereign operations, governments borrow the funds and the governments then 

enters into procurement contracts with companies. The procurement arrangements are conducted 

by agencies or institutions of the borrowing governments in accordance with IDB procurement 

policies; the IDB is not a party to those contracts. The IDB publishes procurement data on its 

website for contract award winners (for public works, goods and services procured through 

International Competitive Bidding or amounting to US$25,000 or more, as well as for all 

consulting contracts). The information on contracts includes data in IDB-financed sovereign 

guaranteed and technical assistance operations as it is reported by borrowers or 

beneficiaries. Information published includes the name of the firm, its location and the value of 

the contract, but this information does not include beneficial ownership data. 
IDB Invest

IDB Invest (formerly known as the Inter-American Investment Corporation (IIC)) is a member 

of the IDB Group. It lends to and invests in private sector companies that conduct business in its 

regional developing member countries. In 2016, IDB Invest strengthened its Integrity 

Framework, in particular its due diligence procedures regarding tax information exchange risk 

related to companies or their “controlling shareholders” (defined as the power to direct the 

management or policies of the company through ownership, contract, or otherwise). 

IDB Invest identifies and conducts integrity due diligence (IDD) on entities and individuals who 

own or control directly or indirectly five percent or more of an entity (ten percent in the case of a 

publicly traded company). If the company is a fund, IDB Invest also conducts IDD on the 

general partner/fund manager, even if the general partner does not meet that threshold, as well as 

the general partner/fund manager’s direct and indirect owners down to the five percent level. 

IDB Invest screens the ultimate beneficial owners through relevant databases for integrity risk 

indicators. These include being considered a politically exposed person, being subject to 

economic or administrative sanctions, or being under criminal investigation or involved in 

administrative or civil proceedings that allege serious ethical or financial misconduct. IDB 

Invest defines “integrity risk” as the possibility that a person or entity engages in serious ethical 

or financial misconduct in connection with an IDB Invest operation. Failure to provide 

information on beneficial owners disqualifies a company from receiving funding from IDB 

Invest (although there is an exception under the guidelines for clear mitigating circumstances, 

IDB Invest in practice has never granted an exception). The IDB Invest also posts project 

descriptions on its website, which may include the names of sponsors and major shareholders in 

the company, including some beneficial ownership information.

In 2017, the IDB Office of Institutional Integrity (OII) that manages the IDB Group’s work on 

integrity issues was closely involved in IDB Invest’s transactions. OII had 627 engagements with 

IDB Invest in 2017; each engagement represents an instance where OII provided advice and 

guidance to IIC during the project preparation or supervision phase. In 2017, IDB Invest 

dropped or placed on hold 16 projects because of integrity or reputational risks, including ten

instances related to Know Your Customer due diligence.

The Office of the U.S. Executive Director for the IDB and IDB Invest continues to advance 

United States policy in this area and consistently presses for integrity, high due diligence 

standards and information disclosure in all projects. The Office of the U.S. Executive Director 

for the IDB and IDB Invest was closely involved in the development of the Financial 

Intermediaries Action Plan and other action plans, and advocated for high standards related to 

the disclosure of beneficial ownership information.

Conclusion

During the past year, the MDBs have continued efforts to reduce risk and ensure the integrity of 

their institutions through the collection of beneficial ownership information. As noted above, the 

United States strongly supported these efforts. Collecting and publishing this information will 
significantly increase the ability of MDBs to track who is receiving MDB financing and may 

encourage greater transparency on the part of other international or country institutions as 

well. The Treasury Department and the respective Offices of the U.S. Executive Director in each 

MDB will continue to encourage the MDBs to publish as much information about beneficial 

ownership as they can.