• Charles Sturt University researchers and colleagues argue for robust ‘beneficial ownership’ disclosure legislation, including basic public access, to help detect and deter heinous crimes like human trafficking and sexual exploitation
• Beneficial ownership laws can aid law enforcement, regulators, financial institutions, researchers and policymakers in accessing timely and relevant information
• While Australia’s beneficial ownership laws currently lag behind those of Canada, both nations need to reform and strengthen their legislation

A recent study by Charles Sturt University researchers and Canadian colleagues highlights the critical role of beneficial ownership registries in combating financial crime, and particularly human trafficking.

The study, ‘Detecting, disrupting and deterring sexual exploitation of trafficked persons: leveraging beneficial ownership registries to reduce criminogenic information asymmetry and raise public expectations’, was published in Current Issues in Criminal Justice (March 2025).

Two of the study’s co-authors are Dr Jamie Ferrill and Dr Milind Tiwari, Senior Lecturers in Financial Crime Studies in the Charles Sturt Australian Graduate School of Policing and Security (AGSP&S).

Dr Ferrill said the research used a most-similar systems design, wherein Australia serves as Canada’s closest federal comparator.

“Both countries are Westminster-style federations with similar vulnerabilities to money laundering and other financial crimes, but Australia currently lacks a framework for systemic collection, verification or access to beneficial ownership information,” Dr Ferrill said.

The research analysed five case studies of illicit massage businesses (IMBs) in Canada to illustrate how traffickers exploit gaps in beneficial ownership laws. It also proposes potential solutions, including the beneficial ownership transparency, highlighting the important need for legislative reforms in both Canada and Australia.

The IMB case studies illustrate how these entities can be exploited by Transnational Organised Crime (TNOC) syndicates due to lax provincial and federal beneficial ownership regulations.

The research emphasises that insufficient beneficial ownership regulations and poor transparency contribute to information asymmetry, thus enabling criminal activities.

“The lack of transparency and consistency in these regulations creates an environment where human trafficking can thrive,” Dr Ferrill said.

“Criminals target and misuse societal services and infrastructure such as banks and other financial services, communication, accounting and legal services, real estate and the investment sector, among others.”

Dr Ferrill said the study findings show the need for greater transparency in corporate ownership structures - including but not limited to IMBs - and the establishment of registries to facilitate this transparency.

The research advocates for a tiered approach to beneficial ownership transparency, with basic information available to the public and full access granted to competent authorities.

Dr Ferrill explained that while limited public access helps deter criminal activity through increased scrutiny and accountability, law enforcement agencies, financial intelligence units, regulators and researchers need comprehensive access to detailed beneficial ownership information to effectively investigate and prosecute financial crimes.

“Ostensibly, making limited beneficial ownership data more readily available to the public reduces societal tolerance for the private sector’s willingness to turn a blind eye to its role in facilitating criminal activity,” she said.

“Some public disclosure of beneficial ownership data is one way for society to hold both government and industry to higher standards, and it could go a long way in tackling crimes such as human trafficking.”

The study notes that beneficial ownership solutions available only to government and law enforcement have limited effect due to resource constraints and competing priorities, while criminals operate without such restrictions.

By providing basic public transparency alongside full access for appropriate authorities, the approach balances privacy considerations with the public interest in combating money laundering and human trafficking.

“The research asserts that legislation, registries and data are not silver bullets,” Dr Ferrill said. “Instead, they selectively reveal key data points that facilitate the collation of relevant information and the identification of potentially risky patterns.”

Dr Ferrill said that while beneficial ownership laws can significantly aid law enforcement, regulators, financial institutions, researchers and policymakers in accessing timely and relevant information, the study’s authors caution that legislation and registries alone are insufficient.

“For instance, the rise of cryptocurrency complicates the ability to link clients to illicit services, necessitating that financial and criminal intelligence agencies be adequately informed to leverage beneficial ownership and personally identifiable banking information,” she said.

“Key areas for improvement include enhancing reporting requirements, analysing registries, and developing intelligence capabilities to detect illicit activities. In addition, there is a pressing need for technical capacity to leverage innovation and apply data analytics effectively.”

Potential students considering studying in this field may be interested to learn more about the double-degree Bachelor of Laws/Bachelor of Criminal Justice, the Master of Fraud and Financial Crime or Master of Anti-Money Laundering and Counter-Terrorist Financing offered by the Charles Sturt AGSP&S.