When I tell people who don’t fight financial secrecy on a daily basis what I do for a living, I often hear a version of, “Wow, that must keep you busy” or “How’s that going for you?” Well, it does keep me busy and it’s going pretty well! In 2023, the FACT Coalition continued our proud tradition of campaigning success, shifting narratives, informing policy makers and the media, and notching big wins around our twin goals of combating illicit financial practices and fighting for fairer international tax systems.
Major media have taken note, and last year we had our views featured in the New York Times, Wall Street Journal, Washington Post, Associated Press, Reuters, the Guardian, and many more other outlets, with 60 unique media hits in 2023. While focused on ending financial secrecy in the U.S., perhaps the easiest place to hide dirty money, we’ve also participated in high-profile anti-corruption and tax events at the UN.
But exposure is not the measure of success: FACT exists, and works every day, to advance meaningful policy reform. It has been a big year across our issue areas, with major priorities that have defined our Coalition from its inception moving forward both at home and abroad.
Here are just a few of those achievements.
Pulling Back the Veil on Anonymous Companies
Years of activism by civil society and lawmakers came to a head on January 1, when the Treasury Department at last began collecting information on the true, “beneficial” owners of U.S. companies under the landmark Corporate Transparency Act. For decades, bad actors looking to launder dirty cash in the U.S. have been able to hide behind anonymous shell entities, effectively rendering themselves invisible to U.S. and foreign authorities.
As one of the law’s chief advocates, FACT celebrated the passage of the Corporate Transparency Act (CTA) three years ago. But even then, we knew the work was not yet done. At every step, FACT has pushed for the effective implementation of this landmark measure through public comments, consultations with Treasury officials, and coordination with anti-corruption champions in Congress.
Those efforts paid dividends in 2023:
- Following outcry from FACT and other civil society organizations over a fatally-flawed draft rule restricting access to beneficial ownership information collected under the CTA, Treasury released a dramatically improved final rule in the final days of 2023.
- Another flawed draft document that could have effectively made reporting under the CTA optional was similarly revised to better reflect Congressional intent after FACT and other advocates voiced concern.
- In March, the Biden Administration again listened to longstanding calls from civil society when they committed to verifying reported ownership information.
- In July, following the release of a FACT-led letter from civil society, labor, and national security groups, Treasury named a permanent Director for the Financial Crimes Enforcement Network (FinCEN), the bureau responsible for drafting rules to implement the CTA and other key anti-money laundering initiatives.
And we aren’t slowing down. FACT remains committed to ensuring the effectiveness of this once-in-a-generation anti-money laundering achievement, and to securing its transformational promise to end the use of anonymous shell companies in the U.S.
A Spotlight on the Financiers of Environmental Crimes
Last year, we dramatically expanded our work at the intersection of environmental and financial crime, culminating in the release of our groundbreaking report, Dirty Money and the Destruction of the Amazon. Our launch event – with a full room attending in person and more than 100 watching online – immediately made waves, and our report was picked up in both the English and Spanish language press. As I told the Washington Post, “Illegal mining and other nature crimes are major contributors to deforestation. The perpetrators of these crimes often rely on the secrecy afforded by the U.S. financial system to launder money.”
To lead this critical portfolio (and with new support from the Moore Foundation), we welcomed the incredible Julia Yansura to the secretariat team this month as our Program Director for Environmental Crime and Illicit Finance. With her leadership, we look forward to new collaborations, opportunities, and avenues of work in the new year.
A Transformative Year for Tax Transparency
It was also a big year for another of FACT’s long-held priorities, multinational tax transparency: or the simple idea that the public should know where big corporations are doing business, and where they pay (or don’t pay) their taxes.
In September, following input from FACT and other tax justice groups, the Financial Accounting Standards Board (FASB) unanimously approved new guidelines for how U.S. public companies report on where they pay taxes, and how their foreign operations affect taxes paid. This new standard – the result of seven years of deliberations and input from investors and advocates – is a big step in the right direction, but more still needs to be done.
In Australia, the Labor government has committed to, and introduced draft legislation implementing, true public country-by-country reporting (public CbCR) for major multinationals. Australia’s draft legislation will, if passed, require many large multinationals (including a number of American companies) doing business in Australia to reveal their taxes paid, revenues and income earned, and number of employees for each country in which they operate.
This would be, simply put, a tectonic shift in global tax transparency norms. In the U.S., strong Congressional voices are calling for greater tax transparency via Securities and Exchange Commission reporting requirements and, just yesterday, a former Treasury tax official unambiguously backed public country-by-country reporting in Senate testimony.
A Winning Coalition
None of these victories would have been possible without the tireless efforts of FACT’s members and allies from the anti-corruption, financial transparency, and tax justice communities. Beyond FACT’s immediate issue set, however, our partners achieved remarkable outcomes in 2023 toward curbing corruption and making the global rich and powerful multinationals pay their fair share.
Among too many to name, some highlights include:
- The passage of legislation introducing Canada’s first federal public beneficial ownership database, spearheaded by the End Snow-Washing Coalition and the indomitable Sasha Caldera: Publish What You Pay Canada, Transparency International Canada, and Canadians For Tax Fairness.
- The enactment into law of the Foreign Extortion Prevention Act (FEPA) – the most substantial update to U.S. anti-bribery law in generations – led by our friends at Transparency International U.S.
- The introduction of multiple shareholder resolutions calling for public country-by-country reporting from some of the largest U.S. multinational companies, including filings against Exxon, Chevron, and ConocoPhillips led by Oxfam America.
- The advancement of a UN framework convention to further democratize global tax rules, made possible by the Global Alliance for Tax Justice and other FACT allies.
Forward to 2024
While some long-walked roads seem to be reaching their ends, the work continues. With Treasury at last advancing much needed new rules addressing money laundering through U.S. real estate and private investment markets, the push for true multinational tax transparency entering a dynamic new phase, and ever-increasing awareness of how U.S. financial secrecy fuels environmental crimes in vulnerable areas across the globe, FACT’s mission remains as important as ever. With billions of people voting in elections this year, it’s also more important than ever to address the threats that dirty money and rigged tax systems pose to democratic progress around the world.
We were grateful to expand our membership last year, including welcoming our first member from Puerto Rico, and to add new organizations to our steering committee (I’m looking at you, CREW, Main Street Alliance, Rise Economy, and Sembrando Sentido.) I’m continually grateful for the work of our secretariat team, our member organizations, new and old, and for our allies and partners across the globe. With all of your help, we look forward to another banner year ahead.