Incorporation Transparency

Rooting Out Waste and Fraud in the U.S. to Advance Responsible Business Conduct

By Eryn Schornick

More than 30 Organizations call on U.S. Government to Commit to Collecting and Publishing Information about the Real Owners of Companies Involved in Federal Procurement

Today, Global Witness joined the FACT Coalition and 30 other organizations in calling for the U.S. Administration to make a commitment to collect and publish information about the real owners of companies (also called “beneficial owners”) that participate in federal procurement, under its first National Action Plan on Responsible Business Conduct.

The U.S. government expects to use this plan to demonstrate how it encourages companies to achieve high standards of behavior and to champion those that reach such best practices. The plan is also a way for the government to highlight what it is doing to encourage an enabling environment for responsible business conduct.

To achieve these objectives, the Administration must work to curb fraud and corruption, and to protect against related human rights abuses. Federal procurement is an important area where the Administration has the authority to act without Congress, and to significantly impact fraud and abuse that has devastating consequences to human rights. By leveraging the vast purchasing power of the U.S. government ($445 billion in 2014), the procurement sector has the potential to be a force for good.

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Grassley, Iowa Could Stop Hidden Ownership

By Rebecca Wilkins

We need a system of increased accountability with a public registry of the people who really control companies. It’s time to shut down the ability to hide the owners and bring them out of the shadows for everyone to see.

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FACT Sheet: Why Beneficial Ownership Transparency Matters

Phantom firms can open bank accounts, wire money, buy property, and transact business like any other company, making them an attractive method for hiding, moving, and using money or other assets. As a result, phantom firms are often misused for a multitude of illegal or unethical activities.

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Global Shell Games: Testing Money Launderers’ and Terrorist Financiers’ Access to Shell Companies

For criminals moving large sums of dirty money internationally, there is no better device than an untraceable shell company. This paper reports the results of an experiment soliciting offers for these prohibited anonymous shell corporations. Our research team impersonated a variety of low- and high-risk customers, including would-be money launderers, corrupt officials, and terrorist financiers when requesting the anonymous companies. Evidence is drawn from more than 7,400 email solicitations to more than 3,700 Corporate Service Providers that make and sell shell companies in 182 countries. The experiment allows us to test whether international rules are actually effective when they mandate that those selling shell companies must collect identity documents from their customers. Shell companies that cannot be traced back to their real owners are one of the most common means for laundering money, giving and receiving bribes, busting sanctions, evading taxes, and financing terrorism.

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