Newsletter

Just the FACTs: November 20, 2020

“Just the FACTs” is a round-up of news stories and information regarding efforts to combat corrupt financial practices, including offshore tax haven abuses, corporate secrecy, and the laundering of money through the financial system.

Send feedback or items for future newsletters to Jacob Wills at [email protected].


State of Play

Corporate Ownership Transparency

More than a decade after FACT Coalition member organizations began working to end anonymous companies, Congress is nearing the finish line to finally pass a bill that could do just that. Thanks to the extensive efforts of this Coalition and its partners, the Corporate Transparency Act was included in the House version of the annual defense authorization bill over the summer. This December, the House and Senate have a critical opportunity to enact this legislation as part of the must-pass National Defense Authorization Act for Fiscal Year 2021. The Coalition continues to organize to get this reform through Congress and onto the President’s desk.

Recent exposés, including the FinCEN files by the International Consortium of Investigative Journalists (ICIJ) and reports of fraud surrounding Covid-19 relief, underscore the urgency to enact key financial reforms. Based on Suspicious Activity Reports (SARs), the FinCEN Files investigation exposes money laundering and corruption facilitated by top global banks, and questions the ability of current regulatory frameworks to stop these illicit transactions. 

Supported by a diverse coalition, the NDAA amendment would require companies to disclose their true owners  to prevent anonymous companies from forming and being used for illicit activity. Several prominent officials have drafted op-eds in the last few weeks calling for passage of this legislation—including a Sheriff in Oklahoma, a former Republican State Rep. in NC, and the sponsor of the CTA, Congresswoman Carolyn Maloney.

Commenting on the FinCEN Files and the NDAA amendment, FACT’s Clark Gascoigne said:

“I don’t want to understate how important that bill is being negotiated as part of the defense bill would be from the beneficial ownership side, but also on the money laundering side, allowing the banks and FinCEN to use more machine learning and technology and analyze trends. If Congress could do one thing right now, it is to get this bill across the finish line.”

The National Defense Authorization Act is expected to be enacted in December 2020.

Tax

The election of Vice President Joe Biden – who made domestic and international tax reform part of his campaign platform – has opened new doors for tax justice advocates to advance key regulatory changes. The fate of legislative reforms rests, in part, on the results of  January 5th Senate runoffs in Georgia. At a recent online briefing, the FACT coalition discussed what some of these reforms could look like and the opportunities that the next few years could provide. While Senate dynamics are unclear, a Biden Administration could impact tax avoidance by multinationals. A recent court decision to uphold fines for Coca-Cola shows that strong IRS enforcement of existing laws could be one way to help reign in these schemes. The Coalition included these and other recommendations in a memo to the Biden-Harris Transition Team.

Tax Transparency

To rebuild from the current economic crises and raise revenue streams, tax transparency is needed now more than ever. Experts gathered in two virtual congressional briefings to discuss ways to remedy corporate tax avoidance. Representatives from investment firms, credit rating agencies, labor unions, small business trade associations, and advocacy groups all advocated for country-by-country reporting of key financial information. The Disclosure of Tax Havens and Offshoring Act (H.R.5933, S.1609) would require companies registered with the SEC to carry out public country-by-country reporting. 

FACT will host a panel at the International Anti-Corruption Conference on December 1st.  The panel, titled “Trending Toward Transparency: The First Global Standard on Corporate Tax Disclosures,” will discuss the newTax Standard from the Global Reporting Initiative with a series of stakeholders.

Following up on previous support from trade associates, there is now support from a majority of small business owners for multinational tax transparency. Three quarters of small business owners want corporations to publicly disclose their taxes, and believe it is a major problem when they do not. A similar study suggests there is public support for policymakers to tackle tax havens. The issue is also supported by academics and former government officials, who say requiring corporate transparency leads to greater accountability and a fairer tax system. Supporters from a broad array of sectors hope to move forward many pieces of legislation introduced in Congress.


From the FACT Coalition and Its Partners

General News

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Ian Gary named Executive Director of the Financial Accountability and Corporate Transparency (FACT) Coalition

FACT Coalition, November 9, 2020


FACT Memo to Biden-Harris Transition Team 

FACT Coalition, November 9, 2020


Incorporation Transparency and Anti-Money Laundering

FACT Policy Recommendations for FACTI Panel Final Report

FACT Coalition November 20, 2020


The FACT Coalition and Partner Organizations Support Including Corporate Transparency Act in the FY2021 NDAA

FACT Coalition, October 8, 2020


FACT Statement: UN Panel Says Major Reforms Needed to Boost Fight Against Illicit Finance 

FACT Coalition, September 24, 2020


FACT Statement: FinCEN Files Highlight Need to Overhaul and Prioritize Dirty Money Fight 

FACT Coalition, September 21, 2020


Report: Poll Shows Majority of Small Business Owners Support Corporate Transparency to Protect Against Fraud

Main Street Alliance, October 2020

By: Alysia Snell, Cate Gormley, and Emily Caramelli


Exporting Corruption 2020: Assessing Enforcement of the OECD Anti-Bribery Convention

Transparency International, October 2020


Narcotics Proceeds in the Western Hemisphere: Analysis of Narcotics Related Illicit Financial Flows between the United States, Mexico, and Colombia

Global Financial Integrity, September 8, 2020


Comments on the FinCEN Advance Notice of Proposed Rulemaking (ANPRM)

Transparency International, November 16, 2020


FACT Sent Comments to FinCEN on AML Program Effectiveness 

FACT Coalition, November 18, 2020


Tax Loopholes

Video: Online Briefing: “Ending U.S. Tax Incentives for Offshoring”

The FACT Coalition, October 22, 2020


Delisting Cayman Islands shows the EU tax haven blacklist is not working, says Oxfam

Oxfam, October 6, 2020


Tax Transparency

Report: Poll Shows Small Business Owners Support Multinational Tax Transparency

The Main Street Alliance, September, 2020

By: Alysia Snell, Cate Gormley, and Emily Caramelli


How Do We Move Towards Tax Transparency?

FACT Coalition and Public Citizen, November 18, 2020

By: Robert Stewart


Video Online Briefing: “Trending Toward Tax Transparency”

The FACT Coalition, October 7, 2020


Issues in the News


Incorporation Transparency & Anti-Money Laundering

Opinion: Anonymous shell companies need to go

The Oklahoman, November 8, 2020

By: Chris West


Press Release: British Virgin Islands Reiterates Territory’s Commitment To An Appropriate Framework For Publicly Accessible Registers

British Virgin Islands Government, September 22, 2020


Congress Is Close To Ending Anonymous Shell Companies

BuzzFeed News, October 5, 2020

By: Paul McLeod


Opinion: How to combat Putin’s financial aggression

The Hill, November 18, 2020

By: Anders Aslund


It’s time to clamp down on shell corporations, a frequent tool of our enemies

North State Journal, November 17, 2020

By: Tom Murry


President-elect Joe Biden’s hometown of Wilmington, Delaware is a hub for secrets

GoErie, November 13, 2020

By: Christopher Maag


New Anti-Money-Laundering Tool Could Overcome Privacy Concerns

Bloomberg Technology, October 6, 2020

By: Ott Ummelas


Opinion: We Need to Crack Down on Anonymous Shell Companies

The Spirit, November 12, 2020

By: Rep. Carolyn B. Maloney


Tax

Coca-Cola Improperly Shifted Profits Abroad, Tax Court Rules 

Wall Street Journal, November 18, 2020

By: Richard Rubin


Opinion: Many companies pay nothing in taxes. The public has a right to know how they pull it off

Washington Post, October 22, 2020

By: Larry Summers & Natasha Sarin


Offshore Finance Hurts Us—All of Us

Offshore Initiative, October 22, 2020

By: Gary Kalman


FinCEN Reissues Real Estate Geographic Targeting Orders for 12 Metropolitan Areas

FinCEN, November 5, 2020


Why PPP fraud hit fintechs harder than banks

American Banker, November 11, 2020

By: Penny Crosman


Goldman Sachs to Recoup Top Executives’ Pay After Costly 1MDB Fines

Wall Street Journal, October 22, 2020

By: Liz Hoffman


Amid political rancor, global digital tax deal pushed back until mid-2021

Politico, October 12, 2020

By: Mark Scott