WASHINGTON, D.C. — By a veto-proof majority of 84 to 13, the U.S. Senate passed historic legislation to end the incorporation of anonymous companies in the United States on Friday, capping a week that included both International Anti-Corruption Day and International Human Rights Day, sending the measure to the White House to be signed into law. The Corporate Transparency Act, which is included in the annual “must-pass” defense bill known as the National Defense Authorization Act, was previously passed by the U.S. House of Representatives on Tuesday by a veto-proof majority.
The Financial Accountability and Corporate Transparency (FACT) Coalition, which has led the more than decade-long effort to end anonymous companies in the U.S., praised the advancement of the landmark anti-corruption reform as it nears enactment.
Ian Gary, executive director of the FACT Coalition, issued the following statement:
“After more than a decade-long campaign to end the formation of anonymous shell companies that are abused by the criminal and the corrupt, the United States is on the verge of enacting historic reforms to protect Americans and our financial system from abuse. We applaud Senators for joining with House lawmakers to advance this critical, bipartisan reform by veto-proof margins. It’s a fitting milestone to mark a week that included both International Anti-Corruption Day and International Human Rights Day.
“It has been decades since our nation’s anti-money laundering laws were updated. Over time, rogue nations, criminals, and kleptocrats have developed ever more sophisticated strategies, but national security and law enforcement officials are currently working with outdated and insufficient tools to counter these emerging threats. As financial crimes accelerate due to the COVID-19 pandemic, it is more important than ever that we address the critical vulnerability to our financial system that anonymous companies represent.
“Experts have routinely ranked anonymous shell companies — where the true, ‘beneficial’ owners are unknown — as the biggest weakness in our anti-money laundering safeguards. Virtually every national security and law enforcement official that has looked at the issue has called for an end to anonymous companies. It’s the single most important change our nation can make to better protect our financial system from abuse.
“The corporate transparency provisions in the defense bill present a major opportunity to address this serious national security vulnerability. They have the support of a powerful alliance of ideologically-diverse constituencies, including the national security community, police and prosecutors, the U.S. Chamber of Commerce, banks and credit unions, CEOs, the real estate sector, large businesses, small business owners, faith groups, anti-human trafficking groups, human rights organizations, global development NGOs, anti-corruption advocates, labor unions, and conservative and liberal think tanks. It’s one of the few areas where the outgoing Trump Administration agrees with the incoming Biden Administration.
“The FACT Coalition appreciates the leadership of Senators Brown, Crapo, Warner, Cotton, Jones, Rounds, Menendez, Kennedy, Cortez Masto, Moran, Whitehouse, Grassley, Wyden, and Rubio. We also thank Leader McConnell, Leader Schumer, Armed Services Chairman Inhofe, and Armed Services Ranking Member Reed for prioritizing the Corporate Transparency Act’s inclusion in the National Defense Authorization Act.
“We urge the President to join with Congress in supporting these historic transparency reforms by signing them into law in a timely manner.”
Notes to Editors:
- Click here for a FACT Sheet on the Corporate Transparency Act.
- Click here to read the conference committee text of the National Defense Authorization Act for Fiscal Year 2021.
- Click here to read the explanatory report for the National Defense Authorization Act for Fiscal Year 2021.
- Click here to watch a video of a press conference the FACT Coalition hosted with Sen. Sherrod Brown, the National District Attorneys Association, Transparency International, and Global Financial Integrity on Thursday, December 10th.
- Click here to watch a video of a press conference with Rep. Maloney and the FACT Coalition on Monday, December 7th. Rep. Maloney issued a press release after the press conference here.
- Click here for information on the support for ending anonymous companies, crossing industries and the ideological spectrum.
- The United States is currently the easiest place in the world to incorporate an anonymous company to launder money and evade law enforcement, according to academics at UT-Austin and Brigham Young University. In all 50 states, it requires less information to form a company than to obtain a library card. An increasing number of countries — including all 27 members of the European Union, the United Kingdom, the UK’s 14 overseas territories, and the UK’s 3 crown dependencies already require the disclosure of the true owners of companies.
Senior Policy Advisor, The FACT Coalition
+1 202 813-0290