Delaware Endorses Bill to Tackle Anonymous Companies

Move Comes as Lawmakers Drop Important Anti-Money Laundering Section from Legislation

WASHINGTON, D.C. — Delaware’s top government official overseeing company formation in the state endorsed a bipartisan federal proposal to require companies to disclose their true owners at the time of formation in new a new letter to Congress.  The correspondence from the Delaware Secretary of State comes as the U.S. House of Representatives Committee on Financial Services risks derailing a bipartisan effort to counter illicit finance by dropping the key transparency proposal from a package of reforms that will be voted upon in committee this week.

Without the key beneficial ownership disclosure provisions, several portions of the remaining bill would weaken safeguards against terror finance and criminal money laundering, according to the Financial Accountability and Corporate Transparency (FACT) Coalition, a non-partisan alliance of more than 100 state, national, and international organizations promoting policies to combat the harmful impacts of corrupt financial practices.

Gary Kalman, the executive director of the FACT Coalition, issued the following statement:

“We greatly appreciate Delaware Secretary of State Jeffrey Bullock writing in favor of the collection of beneficial ownership information for businesses formed in the United States.  As someone with extensive knowledge and background in the corporate formation process, it is particularly meaningful that he called a bipartisan proposal in the House ‘a workable solution to curb money laundering and terrorist financing…’

“The support comes at a critical time, as the House Financial Services Committee has been debating a bipartisan bill that centers on the collection of this information.

“Unfortunately, a new draft of the bill proposes to eliminate the provisions around beneficial ownership transparency — thereby breaking apart the consensus that existed around previous drafts of the proposed legislation.

“As police and prosecutors have said, several of the sections in the remaining bill would actually weaken our nation’s safeguards against rogue states and the financing of crime.

“We urge the committee to reconsider and reincorporate the beneficial ownership provisions.”

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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 for an online version of this release.
  • The full letter from the Delaware Secretary of State can be downloaded here.
  • Click here to download an updated draft of the Counter Terror and Illicit Finance Act, dated June 11, 2018 (the old November 14, 2017 draft is available here). The new version of the bill is scheduled to be voted on in the House Financial Services Committee on Thursday, June 14, 2018.
  • The latest draft of the bill is now opposed by the Fraternal Order of Police and the National District Attorneys Association, among other law enforcement officials.