US moves to require disclosure of corporations beneficial owners

US politicians have moved to introduce legislation that would require the disclosure of a corporation’s beneficial owner.

In a bipartisan proposal, Democrat Carolyn Maloney and Republican Peter King introduced the Incorporation Transparency and Law Enforcement Assistance Act.

Shell corporations

The proposed bill responds to an investigation by Global Witness that was shown on the US television programme, 60 minutes, which exposed the common practice of using US-based shell corporations to launder money linked to criminal enterprises.

The investigation showed that lax US disclosure laws are easily manipulated and exploited.

A New York Times investigation last year documented foreign wealth shielded by shell corporations and used to fund the purchase of more than half of all properties in New York City that cost more than US$5 million.

Law enforcement

“Criminals are taking advantage of state laws by establishing firms – often without a physical presence or business activity – to access our banking system,” King said.

The Incorporation Transparency and Law Enforcement Assistance Act targets this problem by requiring a company that has the characteristics of a shell corporation to disclose who benefits from the company’s operations and makes that information available only to law enforcement.

“This simple requirement would enable law enforcement to stop money from flowing across our borders to terrorist organisations,” King concluded.

An explanatory press release explaining the bill can be found here.

A summary of the 60 Minutes programme, which shows lawyers explaining how they could help place foreign funds in New York, can be found here.



Categories: Trade Based Financial crimes News

Leave a Reply

%d bloggers like this: