The domestic counter-intelligence service BIS is looking to expand its powers in the area of combatting corporate crime and corruption in public tenders. In this regard, it is lobbying the government to amend laws on banking and taxation secrecy, the server Novinky.cz reports.
The BIS this week submitted a draft amendment to the lower house of parliament with the aim of allowing its investigators access to tax returns to help it identify the true owners of companies seeking government contracts or which are somehow involved with strategic state-owned enterprises.
The aim is to better protect the country’s economic interests, for example in the energy sector, the spy service says. To do so, the BIS says it needs to be able to obtain information subject to confidentiality provisions, for example about firms bidding in public tenders “including the names of actual candidates, not just dummy entities [shell companies],” it says in the draft amendment, as cited by Novinky.cz. The BIS wants to know ‘the names of actual candidates, not just dummy entities’ seeking gov’t contracts.
According to the ČEKIA information agency, in 2011 more than half of all joint stock companies in the Czech Republic had so-called bearer shares (whereby shares of privately traded companies are registered to the “holder” of a certificate rather than to a named individual).
Currently, companies with bearer share ownership are allowed to compete for public-sector contracts without having to reveal their ownership structure. For example, the state-owned cargo freight terminal at Prague’s Ruzyně Airport was sold several years ago to a completely unknown company.
The current Czech government has promised to make the business sector more transparent. As part of its anti-corruption strategy, Prime Minister Petr Nečas (Civic Democrats, ODS) introduced legislation in November 2011 to regulate bearer shares that mask the ownership of joint stock companies.
According to the OECD’s 2010 Tax Cooperation report, apart from the Czech Republic, only two countries have failed to abolish bearer shares: the Micronesian island nations of Nauru and the Marshall Islands.
