Take Action Donate

Anonymous Companies

Just the FACTs: November 28, 2016

Increasingly the issues of tax avoidance and financial secrecy are drawing the attention of a broader audience.  Both issues were repeatedly mentioned throughout the presidential election by both candidates.  Donald Trump’s original tax plan even went as far as to end deferral, though updates to the plan in September omitted any position on it.  With the results of the election in, FACT and our members are analyzing what they mean for reform here at home.  More on that in the weeks to come.

The EU commission’s decision in August to force Apple to pay back $14 billion in dodged taxes to Ireland served as a wake-up call to many investors—tax avoidance is a serious risk.  A recent article in the Financial Times, explained how several major funds and investment groups are deeply concerned with companies’ increasing reliance on tax avoidance schemes.  One such fund, Nordea Asset Management—has written to a number of companies—including Alphabet and Apple.  In the letter, they ask that companies lay out their tax risks and that—if they don’t comply by January—they “will rally other investors and propose shareholder resolutions in 2017.”  Four other fund houses in the UK—representing almost £1tn of assets—have also written to the board of Alphabet to raise concerns about its tax arrangements.

 

Read More

Just the FACTs: August 19, 2016

In May, the Treasury Department released a final rule that was meant to increase scrutiny on banks to know the customers with which they do business.  Despite the fact that we believe the Treasury rule should have been much stronger, banks are on the front-line of the battle against terror financing and criminal money laundering and do have real anti-money laundering obligations.  But, there’s just one problem.  Banks are having a tough time verifying who their customers are because incorporating a company in the U.S. doesn’t require owners to disclose their real names.  Banks are now asking that the federal government change that.

The Clearing House Association, which represents the largest commercial banks, sent a letter to congressional lawmakers in support of the bipartisan Incorporation Transparency and Law Enforcement Assistance Act (H.R.4450, S.2489). The Clearing House includes major banks like Bank of America, Citibank, and JPMorgan Chase, and Wells Fargo. As FACT member  Global Witness explains, “without a way to ensure there’s comprehensive collection of beneficial ownership information for U.S. companies, it will be hard for banks to comply with new regulations that require them to find out who are the beneficial owners of their corporate clients.”

Read More

Just the FACTs: August 5, 2016

It’s no secret, secret shell companies are dangerous.  A report by FACT member Global Witness in early July showed us how these companies are being used to defraud the federal government and put our armed forces at risk.  This week, a new report from another FACT member, Fair Share Education Fund, exposed connections to shell companies and the opioid epidemic.  The report, “Anonymity Overdose”, explains how ending the use of anonymous shell companies could make it significantly harder to keep drug profits hidden from law enforcement.

Likewise, shell companies are often used to launder illicit money through real estate.  A geographic targeting order from the Treasury Department began collecting information on high risk purchases in two of the biggest U.S. housing markets back in March.  According to an article in The New York Times, more than a quarter of the all-cash luxury home purchases made using shell companies in Manhattan and Miami were flagged as suspicious.  The Treasury Department will now expand the program to other major housing markets across the country.

 

Read More
Anonymous Companies

Banks Join the Call to End Anonymous Companies

This week, The Clearing House Association, a major trade association for U.S. commercial banks, endorsed legislation requiring the collection of information about the real owners of U.S. companies (S. 2489/H.R. 4450). The Clearing House Association is the oldest banking association in the U.S., and it advocates on behalf of the largest U.S. commercial banks, such as Bank of America, Wells Fargo and SunTrust, just to name a few.

Their letter states, “We believe the bill would assist public sector efforts to identify money laundering and terrorist financing through the disclosure of the beneficial owners of corporations. In addition, the legislation would bring the United States further in line with international AML/CFT expectations, such as the recommendations developed by the Financial Action Task Force (FATF). We can see no justification for allowing corporations to shield their ownership.”

Read More

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.

Read More