Blog | Page 23 | The FACT Coalition

Global Task Force Slams U.S. on Anonymous Shell Companies

December 8, 2016

FATF Evaluation Notes the U.S. Anti-Money Laundering “System Has Serious Gaps that Impede Timely Access to Beneficial Ownership Information”
Last week, the Financial Action Task Force (FATF)—the international body that sets anti-money laundering and counter-terror financing (AML/CFT) standards—released its first review of the United States’ efforts to combat dirty money since 2006. While the FATF report finds that the U.S. generally has a decent AML/CFT framework, it notes that there remains a gaping hole in the regime: the problem of anonymous shell companies.

The FATF release states:
“The United States has a well-developed and robust anti-money laundering and counter-terrorist financing (AML/CFT) regime through which it is effectively investigating and prosecuting money laundering and terrorist financing. However, the system has serious gaps that impede timely access to beneficial ownership information.”
Indeed, the U.S. remains one of the easiest places in the world for criminals, terrorists, and kleptocrats to open anonymous shell companies to launder illicit money with impunity, according to leading academics. That is because no U.S. state requires that information on the true, human owner (known as the “beneficial owner”) of an entity be disclosed to authorities at the time of incorporation.

Level the Playing Field: Tax Reform Americans Deserve

November 28, 2016

As Congress Pursues Tax Reform, FACT Urges Lawmakers to Close Loopholes, Hold Large Companies Accountable, and Refrain from Disadvantaging Wholly Domestic and Smaller Businesses
Corporate tax reform is coming. The central question is: what will it look like? After a campaign in which both presidential candidates pledged to close loopholes that allow corporations to dodge taxes and stop companies from booking their profits overseas, is there the political will to do it?

One current proposal in Congress calls for a 0% tax on profits booked offshore. Yes, the proposal is for 0%. That is not a typo. Given the campaign rhetoric, that seems antithetical to cracking down on corporate tax dodging. But that hasn’t stopped Representative John Delaney (D-MD) from pushing a bill that would do just that. Bad enough that House Speaker Paul Ryan (R-WI) and the President-elect have suggested giveaway-corporate-tax rates of between 8% and 10% on offshore profits — but the new starting point appears to be zero.

Sadly, the rate is only a part of the problem and, in some ways, the lesser of the evils. These proposals leave in place all of the loopholes that enable companies to move money and jobs overseas. They allow multinational companies to continue to defer paying taxes on profits booked offshore until the next giveaway — referred to in policy circles as a tax ‘holiday.’ These ‘holidays’ reward a small number of very large corporations — just 30 Fortune 500 companies hold 65% of the estimated $2.6 trillion in offshore profits — with a special tax rate (or no tax rate). That leaves domestic companies, smaller businesses, and individuals to pick up the tab (and, it’s a large tab: Citizens for Tax Justice estimates that Fortune 500 companies now owe more than $700 billion in unpaid taxes on their earnings booked offshore).

Ask the Government to Know Who It Does Business with to Protect Us All

November 2, 2016

25 Organizations Send Letter to Congress Urging Beneficial Ownership Transparency in Procurement Process
The U.S. government has long recognized that it does not have enough information on the identities of its contractors—those that help protect our national security, provide medical and educational services, and build infrastructure.
“‘[T]here is no database in the U.S. government’ that provides reliable subcontractor information.”
— Ray DiNunzio, Special Investigator General for Afghanistan Reconstruction chief investigator from August 2009 to 2011 (via the Washington Post)

This lack of information can harm us all.

Hudson Institute Highlights Links Between Criminal Secrecy and Kleptocracy

October 26, 2016

Conservative Think Tank Scholars Note “Ending Criminal Secrecy Might become that Rarest of Political Beasts: a Truly Non-Partisan Issue.”
Scholars at the Hudson Institute recently announced in an article their support for action to curtail the abuse of anonymous shell companies. The conservative think tank’s Kleptocracy Initiative argues that the U.S. efforts around the world to stabilize governments and root out corruption are being undermined by an irrational contradiction where U.S. laws are at the same time providing a “safe haven to their dirty cash.”

Tackling the Opioid Epidemic through Corporate Transparency

September 23, 2016

Ending Anonymous Shell Companies Will Enable Us to Follow the Money Driving the Illicit Opioid Trade
Opioids are killing more Americans than ever before.

On average, 78 people die from opioid overdose everyday. From 1999 to 2014, more than 165,000 lives were lost due to overdoses related to prescription opioids. This crisis is being described as “one of the worst public health epidemics” in U.S. history.

The prevalence of opioid abuse is pushing families apart, tearing at the fabric of our communities, and killing our loved ones. So what or who is to blame for this prevalence? What is allowing opiates to be transported into the heart of our communities? There are a number of reasons, but a recent report published by Fair Share Education Fund reveals one of the less-discussed—yet systemic—drivers of opioid abuse: anonymous shell companies.

Apple Ruling Puts Emphasis on Need to End ‘Deferral’—the Biggest Tax Dodge

August 30, 2016

Administration and Congress Should Focus on Collecting the Remaining $51.5 Billion that Apple Owes American Taxpayers
U.S. corporations woke up today to find that the European Commission ruled that Apple must re-pay Ireland roughly $14.5 billion it provided in illegal tax breaks.

According to The Wall Street Journal:
The European Union’s antitrust regulator has demanded that Ireland recoup roughly €13 billion ($14.5 billion) in taxes from Apple Inc., after ruling that a deal with Dublin allowed the company to avoid almost all corporate tax across the entire bloc for more than a decade—a move that could intensify a feud between the EU and the U.S. over the bloc’s tax probes into American companies.
With all of the finger pointing and spin, it’s important to take stock of the facts.

Let’s be clear—Apple’s pretense that it is a good corporate citizen that pays its taxes is now over.