Bipartisan Group of Senators Unveil Draft Anti-Money Laundering, Ownership Transparency Bill

House Committee to Vote on Corporate Transparency Act Tuesday

Statement by Gary Kalman, Executive Director of the Financial Accountability and Corporate Transparency (FACT) Coalition

WASHINGTON, D.C. — A bipartisan group of four U.S. senators unveiled draft legislation to update federal anti-money laundering laws and end the incorporation of anonymous companies in the U.S. on Monday, as House lawmakers prepare to vote on their own bipartisan proposal to address the abuse of anonymous companies on Tuesday.

Titled the Improving Laundering Laws and Increasing Comprehensive Information Tracking of Criminal Activity in Shell Holdings (ILLICIT CASH) Act, the Senate discussion draft is co-sponsored by Senators Mark Warner (D-VA), Tom Cotton (R-AR), Doug Jones (D-AL), and Mike Rounds (R-SD), who all sit on the key Senate Committee on Banking, Housing, and Urban Affairs.

The draft was unveiled one day before the House Committee on Financial Services is scheduled to vote on the bipartisan Corporate Transparency Act of 2019 (H.R.2513), which would require companies to disclose their true (i.e. beneficial) owners when they incorporate and keep their ownership information up to-do-date.

Gary Kalman, the executive director of the Financial Accountability and Corporate Transparency (FACT) Coalition, issued the following statement:

“Today’s release of draft legislation aptly named the ILLICIT CASH Act demonstrates that bipartisan, consensus solutions are within reach to address some historically difficult problems threatening our national security and the integrity of our financial system.

“The draft offers a series of creative and cost-effective steps to combat a range of money laundering problems and rein in abuses associated with anonymous shell companies. The bill section designed to stop the formation of U.S. corporations with hidden owners is especially important.

“Anonymous companies provide cover for the criminal and the corrupt to exploit gaping loopholes in U.S. safeguards against money laundering.  These entities serve as fronts for any number of illicit activities including terrorist financing, human trafficking, sanctions evasion, arms trafficking, illegal drug sales, and more.

“The combination of a strong U.S. economy, U.S. corporate secrecy, and transparency advancements in other parts of the world makes the United States, increasingly, a magnet for illicit cash.

“A mountain of evidence — including studies by the World Bank and United Nations, assessments by the U.S.-backed Financial Action Task Force, the experience in ending anonymous companies in the United Kingdom, and our own experience with the Treasury Department’s orders to rein in abuses in the real estate market — confirms what many have long suspected: anonymous entities are the vehicle of choice for criminals to launder money, and transparency can be an effective deterrent.

“This week, the House Financial Services Committee will be voting on its own bipartisan bill to rein in anonymous companies.  While there are some differences between the House and Senate approaches to ending anonymous companies, and improvements could be made to both, the draft ILLICIT CASH Act offers a similar path forward to the House’s Corporate Transparency Act.  After roughly a dozen years of discussions and negotiations, it is exciting to see a bipartisan consensus forming around this approach to preventing U.S. corporations with secret owners from accessing our financial system.

“The FACT Coalition, on behalf of our member organizations, applauds the leadership of Senators Warner, Cotton, Jones, and Rounds to rise above partisanship in the name of safety and security and produce this draft proposal.  We look forward to working with them in the coming months to, finally, rein in the abuses of anonymous companies.”

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Journalist Contact:

Clark Gascoigne
Deputy Director, The FACT Coalition
+1 202 810-1334
cgascoigne@nullthefactcoalition.org

Notes to Editors:

  • Click here to read the press release from Senators Tom Cotton (R-AR), Doug Jones (D-AL), Mike Rounds (R-SD), and Mark Warner (D-VA).
  • Click here to read a section-by-section summary of the ILLICIT CASH Act discussion draft.
  • Click here to read the full text of the ILLICIT CASH Act discussion draft.
  • Click here for more information about (and to live-stream) the markup of the Corporate Transparency Act of 2019 (H.R.2513).
  • Click here for a list of individuals and organizations endorsing beneficial ownership transparency.