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Ownership Transparency

The U.S. is the easiest place in the world for a criminal, terrorist, tax cheat, or kleptocrat to open an anonymous shell company to launder their money with impunity. Anonymous corporations are great ways to hide money and other assets — they can hold a bank account or buy a yacht. Criminals often layer anonymous corporations, with one owning another and so on, making it even harder for law enforcement to “trace the money” and figure out who is directing the company’s activity. It’s time to ending the use of anonymous shell companies as vehicles for illicit activity by requiring that the true owners of U.S. companies be disclosed at the time of formation and updated upon any change.

Legislative Sausage-Making and Anonymous Shell Companies

Unfortunately, the United States is the easiest place in the world to set up an anonymous shell company. It can be done online in a few minutes and for minimal cost, with no requirement that those who actually own or control the company disclose their ownership. Shell companies can also be registered to someone who provides his or her identity for a fee, known as a nominee, who can be a lawyer, accountant, another person connected to the real owner, or even another company or trust. As a former Treasury special agent, I can attest that the establishment of multiple “layers” where the true beneficiary is not known makes it extremely difficult to follow the criminal money trail.

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Quartz: House Republicans are gutting a bill to fight money-laundering

House Republicans this week axed a key passage in a bill that is deemed crucial in the fight to stop kleptocrats, drug traffickers and terrorists from laundering money through the US.

The original legislation would have forced anyone setting up a company in the US to tell authorities who the actual owner was. Law enforcement, anti-corruption groups and national security experts say this is essential in fighting crimes that range from child trafficking to Russian election hacking; America’s opaque incorporation laws can otherwise make it impossible to find out who is behind a company benefiting from such crimes.

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ThinkProgress: Delaware ready to crack down on anonymous shell companies

At long last, the U.S. may be moving toward preventing the types of anonymous shell companies that criminals, kleptocrats, and arms dealers have long sought. But just as Delaware, the country’s leading anonymous shell company provider, gets on board with new transparency measures, Congress has taken a significant step back, gutting a bill that could have potentially ended the U.S.’s role as the world’s anonymous company capital.

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Delaware Endorses Bill to Tackle Anonymous Companies

Move Comes as Lawmakers Consider Dropping 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.

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America must continue the fight against kleptocracy around the globe

Criminals and corrupt government officials and businesses use anonymous companies – usually registered in Western, developed countries – to move and hide assets, launder money, and evade law enforcement. The true owners of these companies should be required to report to authorities their identity when incorporating as a company or legal entity. This simple transparency would make it much harder for corrupt officials to steal vast wealth from their populations.

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