US House of Representatives set to make history with bill on company ownership transparency

May 8, 2019 – Washington, D.C.: The US Congress is finally moving to advance legislation that would put an end to anonymously-owned companies used by criminals, the corrupt and kleptocrats to launder money in the US. Global Witness welcomes this bill and applauds the bipartisan effort to advance this critical piece of legislation. 

Similar bills seeking to bring transparency to the real owners of companies have been introduced in previous sessions of Congress – however, the Corporate Transparency Act (H.R. 2513) would be the first version of this bill to ever be voted out of committee for a floor vote. 

The bill, sponsored by Representative Carolyn B. Maloney (D-NY), Representative Peter King (R-NY) and Representative Tom Malinowski (D-NJ), requires companies to disclose their true, beneficial owners at the time the company is formed and to keep the information updated whenever it changes.

“Time and again, we see anonymous companies used as vehicles by criminals and the corrupt who seek to launder and stash their dirty money in the US,” said Alexandria Robins, an anti-money laundering campaigner at Global Witness. 

“In just the past few weeks alone, anonymously-owned companies appeared in a $1.2 billion Medicare fraud scam pursued by the DOJ and served as vehicles for global sex-trafficking rings exposed in Texas, Florida and elsewhere,” warned Robins. “Nearly every day we see the risks we face if the US continues to allow anonymous companies to serve as getaway cars for the criminal and the corrupt.”

“Anonymous companies have also shown up in a recent advisory issued by the US Financial Crimes Enforcement Network warning that individuals from Venezuela who are implicated in theft of public money are using shell companies as vehicles to hide and launder those funds.”

A wide array of diverse voices support legislation to end anonymously-owned companies, including law enforcement organizations such as the Fraternal Order of Police, the National District Attorneys Association and 24 State Attorneys General; anti-human trafficking organizations such as Polaris; national security scholars from business organizations such as the Coalition Against Insurance Fraud and the National Foreign Trade Council; anti-poverty and human rights organizations such as the ONE Campaign, Oxfam America and Human Rights Watch, and many more. 

Global Witness has shown how anonymously-owned American companies allow a wide range of criminals to cheat justice, hurt Americans, and rip off ordinary people – from drug trafficking to multi-million dollar insurance fraud and schemes that rob the elderly of their life-savings.

Once the House moves this bill through the Committee, the bill goes to a floor vote in the House. The collection of beneficial ownership information would patch the largest vulnerability in the US anti-money laundering framework. We encourage the full House to pass the Corporate Transparency Act and Senate to act swiftly and decisively to end the abuse of anonymous shell companies. 

“Congress is coming together to show that America’s commitment to combating corruption and money laundering should transcend party lines. Passing the Corporate Transparency Act would show criminals that the US is not open for business – they can’t stash their dirty money here,” said Robins.