“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.
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Here’s the State of Play
Lawmakers, Civil Society, and States Look for Faster Pace on Beneficial Ownership Reform
This month, Treasury Secretary Yellen appeared before the House Financial Services Committee and responded to concerns over the Corporate Transparency Act’s (CTA) delayed implementation. In her answer, Yellen assured lawmakers that the second of the CTA’s three required rulemakings would be drafted “this year, in the coming months.” Lawmakers will get another chance to press Treasury on anti-money laundering priorities this Thursday, as Acting Director Him Das of the Financial Crimes Enforcement Network (FinCEN)–the agency responsible for setting up the beneficial ownership registry–testifies before Congress. Sustained congressional oversight will be key to delivering on a timely and impactful final rule.
FACT echoed these calls in a letter sent to FinCEN earlier this month, which was reported on by TaxNotes and Law360. In the letter, FACT reiterated the need for strong CTA implementation to help “enforce sanctions targeting certain Russians fueling the war in Ukraine” and support the Biden Administration’s stated priorities around corruption. FACT also called on FinCEN to adhere to data standards consistent with those put forward by Open Ownership. These standards were recently endorsed by the U.K. government as it looks to plug gaps in their own AML framework. Fortunately, the U.S. can learn from early data stumbles faced by other countries, like the U.K., and start with a well-functioning, accurate and highly useful directory from the start.
There are also signs that beneficial ownership reform may be advancing not only in Washington, D.C., but in state capitals around the country. This March, lawmakers in New York offered up legislation to require limited liability companies to disclose their beneficial owners–a move that would both clean up shady money from New York’s real estate market and support tenants against anonymous landlords. Most recently, FACT’s Policy Director Ryan Gurule testified virtually before Alaska’s legislature to illuminate the current state of U.S. financial secrecy, the impact on local communities, and how Alaska could lead the way toward transparency.
SEC Ruling Adds to the Momentum for Tax Transparency
Earlier this month, the SEC staff handed down an important decision on public country by country reporting (PCBCR) of tax and other key financial information about the activities of multinational corporations. For months, Amazon investors, led by FACT member Missionary Oblates, have organized behind a shareholder proposal urging the company to adopt the Global Reporting Initiative’s (GRI) voluntary public country-by-country reporting standard. Despite efforts by Amazon to block the “first of its kind” resolution from being discussed at the company’s annual general meeting next month, the SEC staff said that the proposal should be allowed to move forward for shareholder consideration at Amazon’s annual general meeting.
As FACT discussed in our recent blog on the subject, this ruling paves the way for other investors to lead similar proposals across the corporate landscape, bringing U.S. multinational companies into the light of transparency one vote at a time. The outcome–and strong investor support for the shareholder proposal–also serve as a clear rejection of the Financial Accounting Standards Board’s shortsighted decision to exclude investors’ demands for PCBCR from their agenda.
Shareholder activism, however, is no substitute for responsible policymaking. To realize the benefits of public country-by-country reporting, a competent authority–such as the SEC, FASB, or Congress–will need to pass universal disclosure requirements to give investors and the public the information they need to make meaningful investment decisions and hold corporations accountable.
Latest from FACT
 | PRESS RELEASE: Anti-Corruption Campaigners Urge Treasury to Swiftly Implement Landmark Corporate Transparency Law April 19: The FACT Coalition sent a letter to the Financial Crimes Enforcement Network urging the agency to act quickly to implement the CTA’s secure directory of beneficial owners. |
 | VIDEO RECORDING: FACT Urges Critical Transparency Measures for Trusts in Testimony Before Alaska’s Legislature April 14: Watch Ryan Gurule’s testimony before Alaska’s legislature on trust secrecy in Alaska and the Pandora Papers |
FACT in the News
 | MENTIONED IN: Beneficial ownership regulatory relief is far from assured April 24: American Banker mentions FACT while reporting on the challenges facing beneficial ownership reform |
 | MENTIONED IN: Groups Press Treasury To Issue New Beneficial Ownership Regs April 19: Law360 reports on FACT’s letter urging FinCEN to advance implementation of the Corporate Transparency Act. |
 | MENTIONED IN: FACT Coalition Urges Release of Second Set of Transparency Regs April 19: TaxNotes reports on FACT’s letter urging FinCEN to advance implementation of the Corporate Transparency Act. |
 | QUOTED IN: FASB chair gets ready for new agenda April 14: FACT’s Ian Gary is quoted by Accounting Today commenting on FASB’s failure to include public country-by-country reporting in their latest agenda. |
 | QUOTED IN: Oligarchs’ big loophole for stashing money April 11: FACT’s Erica Hanichak is mentioned in Politico’s reporting on Russian oligarchs’ U.S. real estate holdings. |
 | QUOTED IN: Sanctions Spur Calls to Make Private Equity Vet Investors April 11: FACT’s Ryan Gurule is quoted in the Wall Street Journal amid growing concerns over Russian oligarchs’ influence in U.S. private equity. |
Recent and Upcoming Events
 | (UPCOMING) Oversight of the Financial Crimes Enforcement Network Hearing April 28: Later this month, Acting Director Him Das of the Financial Crimes Enforcement Network (FinCEN) will testify before Congress, detailing the agency’s policy successes and potential challenges. |
Social Media Shoutouts
@SenWhitehouse, American real estate can’t be a dark repository for oligarch money.
@SenWarren, Russian oligarchs are continuing to profit from illegal investments in the U.S. because they can hide their money in private equity firms and hedge funds with almost no restrictions. I’m calling on @USTreasury and @SECGov to close this loophole immediately.
@RepMaloney, Russian oligarchs are busy moving their money out of reach right now. Treasury needs to SPEED UP their rulemaking on my Corporate Transparency Act so that we can hold Russian oligarchs accountable.
@BradSherman, Today I spoke with Treasury Secretary @SecYellen on the importance of the U.S. government doing more to identify and prevent #Russia and its oligarchs from evading sanctions through the private securities market and cryptocurrency. See the exchange below:
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