The United States effectively banned anonymous Shell companies from operating in the country with the passage of a new anti-corruption law that activists call “historic”.
Under the new rules, companies in the Financial Crimes Enforcement Unit must provide the finance department with information on “beneficial ownership”. Anonymous companies that can be used to hide funds illegally raised by criminals and corrupt foreign officials would be effectively banned.
Transparency International, an advocacy group that worked with lawmakers to draft the bill, called the new bill “historic” and “one of the most important anti-corruption measures ever passed by the US Congress.”
“It’s a huge step forward in the fight against illegal finance at home and around the world,” said Gary Kalman, the group’s US director. “Put simply, corporate transparency means that corrupt executives and other criminals will find it more difficult to hide and move stolen money through privately owned companies.”
Anti-corruption activists have been working for years to plug the loopholes that allow criminals to hide money in the US. Last year, the US overtook Switzerland in a global ranking of hotspots for financial secrecy. In the Financial Secrecy Index 2020 of the Tax Justice Network, it is currently in second place worldwide, only behind the Cayman Islands.
Corporate secrecy rules have so far allowed anyone to set up an anonymous shell company where they could hide enormous sums of money without being identifiable. Corrupt foreign leaders, antitrust leaders, and criminals have all used lax US laws to hide their illicit profits.
This will change now. According to the new Corporate Transparency Act, which was passed with the support of both parties, anyone who sets up a business in the United States must provide their name, date of birth and unique identification number. This information may be shared with law enforcement agencies – including those acting on behalf of a foreign law enforcement agency – and for national security and intelligence purposes.
The law also makes “intentionally false testimony or willful circumvention of its requirements” a federal crime, punishable by up to three years in prison.
Casey Michel, author of the forthcoming book on money laundering entitled “American Kleptocracy,” said the bill was a victory for the fight against corruption not just in the US but around the world.
“It is difficult to overestimate the importance of today’s legislation,” he said The independent It is described as “the most significant step in the fight against money laundering that the US has taken in decades and possibly ever”.
“Oligarchs and kleptocrats, gunmen and cartelists, poachers and human traffickers – anyone with a bit of dirty money in their pockets – can no longer turn to American shell companies for money,” he added.
Mr Michel, whose book is due to be published later this year, said the use of anonymous Shell companies in the US acted as “building blocks” for corrupt networks around the world able to deliver dirty money in front of investigators hide and journalists.
“The USA has been the world’s largest provider of anonymous Shell companies for years, thanks in particular to states like Delaware, Nevada and Wyoming. Thanks to the passage of the NDAA, that reality is a thing of the past, ”he said.