Both houses of the US Congress have voted through a law compelling US companies and limited liability partnerships (LLPs) to disclose their beneficial owners holding 25 per cent or more of the shares or voting rights, or those who exercise substantial control over the entity, to a non-public register.

Widely seen as the biggest anti-money laundering (AML) reform in the US since the Patriot Act in 2001, the law – the Corporate Transparency Act, part of the larger National Defence Authorisation Act – has now been sent for presidential approval by a veto-proof majority.

Coverage

The long-awaited law will cover both the two million or more new US entities created each year as well as those that already exist.

It directs the US treasury department’s Financial Crimes Enforcement Network (FinCEN) to create and maintain a secure beneficial ownership registry of legal entities, essentially ending anonymous shell companies.

The law applies to non-US companies registered to do business in the US, as well as to US-registered corporations.

Limited availability

Beneficial ownership information must be filed at the time of company formation and within a year of any changes.

Information will be made available to law enforcement authorities, non-US enforcement agencies and financial institutions if it assists them meet their customer due-diligence requirements.

The beneficial ownership registry will not be available to the general public.

Categories: Trade Based Financial crimes News

Tags: AML, FinCEN, LLPs, US