A lack of a US beneficial ownership register is creating a “dangerous and widening gap” in the country’s national security apparatus according the director of the US Financial Crimes Enforcement Network (FinCEN).

Kenneth Blanco told delegates at a conference on financial crime enforcement hosted by the American Bankers Association and the American Bar Association that the importance of beneficial ownership information to US security cannot be understated.

Criminals thrive

“The lack of a requirement to collect information about who really owns and controls a business and its assets at company formation is a dangerous and widening gap in our national security apparatus,” said Blanco.

“That is because criminals thrive when they have somewhere to hide. And the secrecy behind shell companies…is a clear and present danger,” he added.

Transparency from the start

Blanco said the next critical step to closing this national security gap is collecting beneficial ownership information at the corporate formation stage.

If beneficial ownership information were required at company formation, it would be harder and more costly for criminals, kleptocrats, and terrorists to hide their bad acts, and for foreign states to avoid detection and scrutiny the FinCEN director said.

The requirement would help deter bad actors accessing the US financial system in the first place, which Blanco said would deny them the ability to profit and benefit from its power while threatening national security and putting people at risk.

This article represents the views of the author and not necessarily those of the ICC or Coastline Solutions.

Categories: Trade Based Financial crimes News