Testimony, reports, and independent assessments all find that anonymous companies are a threat to global peace and security and undermine our ability to keep dangerous actors from accessing our financial system.
We need a tax code that creates an even playing field between large multinational corporations and small and domestic businesses, which means ending the ability of the former to engage in offshore shell games.
Quotes from prominent economic experts explaining the incentive for companies to shift activity offshore in the Tax Cuts and Jobs Act.
Anonymous companies are behind just about every financial crime. They are the vehicle of choice for laundering money obtained through illicit activity. Schemes involving terror financing and the trafficking of drugs, illegal weapons, and humans all use anonymous companies to move money, fund operations, and allow bad actors to escape with the proceeds of their crimes and impunity.
The pervasive use of secret shell companies has also begun to impact the broader economy. As such, more and more businesses are speaking out.
As governments around the world begin to crack down on aggressive offshore tax avoidance, numerous companies find themselves in the crosshairs of tax authorities. Alphabet (Google),3 Amazon,4 Apple,5 Caterpillar,6 Gap,7 Facebook,8 Hewlett-Packard,9 McDonalds,10 Microsoft,11 Shell,12 and Starbucks13 have all faced penalties or are in disputes with tax authorities over their aggressive tax avoidance practices.
The new tax law will do little to change the risk factors. While Congress eliminated deferral of taxes for profits booked offshore, the new 50% (or greater) discount on the overseas rate creates a powerful new incentive to move money overseas.14
For policymakers, investors, and other stakeholders to better understand how the tax laws operate in practice, there is a need for public country-by-country reporting (CbCR) of certain revenue, profit, tax, and other information for multinational corporations (MNCs).
Drug traffickers, corrupt officials, rogue nations seeking to evade sanctions, terrorists, and other criminals use anonymous companies to hide the money they steal and maintain the power they hold.
Many of the most dangerous criminal elements now operate sophisticated financial networks. They have updated the way they do “business,” which Includes the use of companies with hidden owners. As the rest of the world cracks down on corporate secrecy, the criminals and other wrongdoers are looking increasingly to the U.S.
The U.S. Treasury Department’s Customer Due Diligence (CDD) Rule for Financial Institutions1 is a critical piece in a larger strategy to protect the integrity of our financial system from abuse and the nation from a broad array of harms.
