USA: Civil society groups support bills to increase transparency & prevent abuses by anonymous companies
Civil society groups in the United States have signed letters in support of bipartisan legislation that would require companies to disclose information about the real people who own or control them at the time they are created. The "Corporate Transparency Act" and the "True Incorporation Transparency for Law Enforcement (TITLE) Act" would increase corporate transparency and help to prevent abuses by anonymous companies, such as fraud, corruption, and money laundering.
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"RE: Corporate Transparency Act (H.R. 3089)", 28 June 2017
We support increased corporate transparency because it would (1) safeguard our national security and expose terrorist financing; (2) curb corruption and fraud, which robs taxpayers of resources designated for infrastructure, and other critical needs; (3) provide critical tools to law enforcement and others to combat money laundering; (4) promote sound corporate governance and financial stability; (5) combat human trafficking; (6) curtail the financing of drug cartels; and (7) help ensure a fair and level playing field for small- and medium-sized businesses... Investigations continue to reveal that terrorists, drug cartels, human traffickers, arms dealers, corrupt foreign officials, tax evaders, sanctioned individuals, and other criminals easily and regularly set up U.S. shell companies without providing any information about who owns or controls such companies.
"RE: True Incorporation Transparency for Law Enforcement (TITLE) Act (S. 1454)", 28 June 2017
Criminals often layer anonymous corporations, with one owning another and so on, to make it even harder for law enforcement to “follow the money” to figure out who is directing the company’s activity — i.e. the identity of the real criminal. These tactics enable criminals to disguise their identities behind the anonymity provided to U.S. companies and to launder dirty money through the U.S. financial system. The lack of transparency also allows corrupt foreign official to divert resources from public treasuries and destabilize the economies of developing nations Anonymous companies have been set up in states across the U.S. to commit crimes and hurt Americans throughout the country. Some examples include:
- A gang used anonymous companies from Kansas, Missouri, and Ohio to trick victims from overseas in a $6 million human trafficking scheme
- A crime syndicate opened fake health clinics across the country in the names of anonymous companies from states including Alabama, California, Colorado, Kentucky, Maryland, Nevada, New Mexico, and Texas to steal at least $35 million from Medicare
As momentum builds globally to solve the problem of anonymous companies, the U.S. needs a policy solution that will address our role in it. Congress should pass legislation that requires all companies to disclose their ultimate owners to the government when they incorporate and to keep that information up to date. The government entity collecting the information should then make it available to law enforcement.