Summary
The main challenges in the field of providing Nordic SMEs access to high quality data from the national business registries was that the registries had created different API standards, which increased the cost of API integration for the third party developers of these integrations. Furthermore, the existing common registry for businesses in the EU is only intended for exchange of information between the business registries in the EU, for individual look-ups, has lower quality data and is not scalable.
The NSG&B working group SA-D has addressed this challenge by exploring how Nordic tax & business registries can provide information that takes into account the requirements of high value data sets in compatible formats across the different national registries within the Nordics. This work is building on the NSG&B working group on Simplified Reporting and Open Accounting (SA-B) and its work on the common Nordic Vocabulary for the financial statements.
The NSG&B working group SA-D has developed a common Nordic semantic model for business information in English. The model can be used for different purposes and one example is an API solution offering access to data from registries across the Nordics showing the core attributes of basic standard data of companies (e.g. name, address, etc.) which can enable third party actors to create services that makes comparisons and analysis of businesses easier across Nordic region for possible investors, business partners, etc. This API can be used, for example, by ERP-systems or other platforms, enabling SMEs to access this basic company information directly from their ERP-systems. Thus, building on the common semantic model created by NSG&B, the APIs in this field have been unified. The ability to receive this information about suppliers or customers from other Nordic countries can contribute to the goal of making the Nordic region the most integrated region in the world and this semantic model can be reused for other purposes such as an example for the EU work in the area regarding eIDAS 2 regulation and the eWallet.
Background
High data quality is the foundation for effective transactions between businesses in order to obtain trust in the business information exchange. Everything starts with basic business information that is open and available and the EU has defined High Value Datasets (HVD) as datasets that hold significant potential for socio-economic and environmental benefits as well as innovative services. The High Value Datasets aim to provide maximum value to their users and will be able to be used free of any technical, legal or financial barrier. This requires data that is machine-readable in common or interoperable formats. The EU Open Data Directive that was last amended in 2019 requires member states to make its data publicly available, including data from the national business registries.
The EU has worked on a common solution in this area over the years, and it has created a common business registry called BRIS. However, currently, data is not available in machine-readable formats on an EU level and national business registries each have their own standards and formats for APIs increasing the costs for system providers and third party developers.
eIDAS 2 regulation aims to update this regulation and notable initiatives in the eIDAS 2 include: 1) universal digital identity wallets:, 2) streamlined cross-border access to national services, 3) enhanced data protection measures where individuals are endowed with greater autonomy over their data. The EU Digital Wallet (EUDIW) and other components within the eIDAS 2.0 ecosystem aims to apply these digital cross-border solutions for data across Europe, and the European Wallet Consortium (EWC) is one of four large scale pilots that are testing different use cases for this wallet. However, it requires that the data in this wallet is of high quality - meaning interoperable cross-border in machine-to-machine readable formats.
The NSG&B working group in the area has thus addressed the demand for high value datasets, the challenges of the current BRIS solution and provided a contribution to how EU member states can implement the eIDAS 2 regulation, including how to include national high value data into the upcoming EU wallet. The challenges and how the NSG&B group has addressed these are outlined in more detail below.
Reflections on the scenario from Implementation Plan 2021
The SA-D working group has stated the following scenario for the area in the 2021 Implementation Plan: “SMEs can validate their trading partners’ bank account and VAT registration information in integrated business systems. SMEs can also evaluate their national and Nordic trading partners in terms of financial stability and reliability, using official information on their business enterprise, i.e. legal registration, business status, VAT and tax registration and payment, overview of shareholders and board members as well as the business change history”.
The working group focused on exploring ways of most effectively providing access for these types of data cross-border and in a secure, cost-effective and integrated way. The types of data that was intended to be included were thus; verification of bank account and VAT registration as well as access to the national registries that typically include the following data on businesses: legal registration, business status, (VAT and) tax registration and payment, overview of shareholders and board members as well as the business change history.
The NSG&B working group had to address the following two main challenges in the area as outlined in more detail below:
The NSG&B contribution
1. Challenge of access to high level data on the EU level
Challenge
The EU has created a common terminology - the Business Registers Interconnection System - BRIS. BRIS is a system for the exchange of information between the business registers and is using the EU Core Business vocabulary via the website e-justice where everybody can search for a company in all EU countries. Limited liability companies in EU countries are included, but it does not include sole proprietors/sole traders/self-employed persons. It offers a list of documents like annual reports that you can download as PDFs. Each country decides if downloading a document costs a fee or not. However, the webpage does not currently have a payment solution in place. The problem is that this BRIS data is not structured, it can only be used for individual look-ups and cannot be integrated into ERP-systems and other services. Furthermore, there are gaps in the EU core vocabulary related to business information for instance the information and terms around signatory rights. Further specifying the EU core vocabulary and the quality of the data that is available from the national registries and other actors are thus a foundation for the further work with eIDAS 2.0 as well as an EU Wallet. In sum, BRIS, the existing common registry for businesses in the EU, is only intended for individual look-ups, has lower quality data and is not scalable.
Contribution
The NSG&B working group on Reliability and Data Quality has focused on finding the best way to enable data based on a system-to-system approach where the data is standardised, structured and machine-readable. The basis for this is to have a common vocabulary for the various national terms in the area. The working group on Reliability & Data Quality has thus been able to use the work of the NSG&B working group on Open Accounting and Simplified Reporting, which has developed a common Nordic Vocabulary of financial statements. The task for the working group on Open Accounting and Reporting has then been to take this Nordic Vocabulary and connect the relevant data from the national registries into an interoperable format across the Nordic registries. This has been done by developing a common Nordic API solution that ERP-system or third party developers can use to build into their systems or services, so that SMEs directly can access this high quality data from their existing ERP-systems for instance. The API solution is described in more detail in the appendix.
2. Challenge of different standards on national business registries that increase costs
Challenge
As outlined in the EU Open Data Directive, member states are required to make relevant data publicly available, including data from the national business registries. EU countries as well as Nordic countries all have national business registries, but this has been done using different standards for their APIs etc. This means that third party developers of these ERP-system integrations would have to develop separate integrations for each country, which makes the cost of these integrations higher than they could have been if countries used the same standards or had a higher degree of interoperability. The costs are then passed on to the SMEs making access to high quality data and digitalisation more expensive than it otherwise could be.
The working group collected input from stakeholders for which types of data that are currently missing or needed in more detail - from the current BRIS as well as from national registries (that are the sources of BRIS). Some of the most requested information from stakeholders are:
Information on signatory rights so that system providers can be able to provide correct information to the customers in order that documents to be digitally signed are sent to the right person. Moreover, it will help auditors to check the validity of a contract because it is crucial to understand the role of each party involved. Another perspective is that it will make it possible to verify that the right person has access to the data, which can be relevant for administrators from a tax authority or a banking association.
Information on beneficial owners to ease the KYC - know your customer process.
Verify that an organisation or business is registered for VAT so that an auditor can carry out an audit check and see that the company has paid the correct VAT. Another reason was to be able to check if the company fulfils its obligations and to be able to charge correct VAT.
Be able to give a power of attorney to an agent with specified permission so that a third party, for instance an external auditor or accountant, can act with an authorisation from the business.
Contribution
The NSG&B has worked to include existing national registry data into the one common Nordic API. The NSG&B API on Nordic business information as outlined above can contribute to providing access in interoperable formats across the Nordics. The working group has used the input from stakeholders and has managed to include the following data from the national business registries in the Nordics: 1) Basic company information; 2) Signatory rights; 3) NACE codes (as part of Activity); 4) Tax information, 5) Data as a Service.
The NSG&B work has been presented for the Semantic Interoperability Community (SEMIC), who develops solutions to help European public administrations perform seamless and meaningful cross-border and cross-domain data exchanges. Discussions with SEMIC have identified an interest of the work and they have initiated a meeting with the aim to reuse the model and add it to the EU Core Vocabulary. This can make the NSG&B standard for signatory rights a part of the EU Core Vocabulary.
Conclusions
Access to high value data is important for a range of different digital services for SMEs, but data from national business registries are not currently available in structured formats across the EU countries, there are gaps in the EU vocabulary for the different national terms and the differences in formats of the national registries make the available national APIs costly to develop and offer to the SMEs. The EU has worked in this area with the BRIS website, and most notably with the eIDAS 2 regulation, including how to include national high value data into an eWallet.
The NSG&B working group SA-D has contributed in the field by developing a common Nordic semantic model that can be used for different purposes. Furthermore, an API solution has been created offering access to data from registries across the Nordics showing the core attributes of basic standard data of companies (e.g. name, address, etc.) which can enable third party actors to create services that makes comparisons and analysis of businesses easier across Nordic region for possible investors, business partners, etc.
This API can be extended to include additional information, such as the signatory rights of a business, and can be integrated with ERP systems or other platforms. This enables SMEs to directly access this information from their ERP systems. Moreover, the ability to receive information about suppliers or customers from other Nordic countries supports the goal of making the Nordic region the most integrated in the world. It can also serve as a model for the EU’s work on the eIDAS 2 regulation and the eWallet initiative.
The Nordic API on business information can enable the SMEs to validate their national and Nordic trading partners in terms of financial stability and reliability, using official information in their business enterprise, i.e. legal registration, business status, thus achieving the initial scenario in this area that was set up in 2021 for the Implementation Plan.
Signatory rights are about understanding which individual in the company has been legally authorised to represent a company. Signatory rights can be given to a person alone or jointly with other persons which have a specific role in a company. This will be important to SMEs when doing business with other business representatives and can be seen as part of the Power of Attorney mentioned in the new EU company directive. It also is of value for service providers building services for knowing your customer (KYC) process. Furthermore, the semantic model for signatory rights as part of EU Core Vocabulary can be used for the future EU Digital Company Wallet.
However, this requires some future work in ERP-systems or third party developers to build an integration for this, enabling SMEs to access this information directly in their ERP-system when sending an invoice, for example.
Furthermore, the semantic model can be expanded to incorporate information from additional sources, such as Tax Administrations and private market participants. In addition, the semantic model can be repurposed for other technical solutions and utilised by third parties to develop value-added services. In principle, this semantic model and the API could be used as an MVP on a whole-of-EU API or other technical solution that includes the national business registries from all of the EU-countries into one. This would function as a BRIS for machine-readable high quality data or as one of the services in a eWallet.