This article was originally published on the ICIJ website.
As countries around the world have begun to outlaw shell companies with hard-to-trace ownership, advocates now fear that Delaware will become an even bigger draw for proceeds of financial crime.
“Right now, the United States is the easiest place in the world to set up an anonymous shell company,” says Clark Gascoigne, deputy director of the FACT Coalition, a group dedicated to financial transparency. “With the U.K. forcing the Cayman Islands, the British Virgin Islands, Bermuda and some of the most notorious tax havens in the world to open up – where is all that dirty money going to flow? It’s going to flow to the United States.”
For years, the FACT Coalition and its allies have pushed for federal legislation that would require U.S. companies to list “beneficial owners” – the people who ultimately own or control a company’s assets, even indirectly. This is a basic step, they argue, to helping investigators see through the intermediaries and registration agents whose names on documents obscure true ownership of shell companies.