and Draft Bills Currently Being Analyzed by Global Witness
Comes Just in Advance of 5/12 Anti-Corruption Summit in UK
Washington, DC — Tonight the U.S. Department of the Treasury released
a new rule and a number of proposals to address the widespread problem of
corruption and dirty money in secret U.S. shell companies exposed by the Panama
Papers. The Treasury Department finalized a long-awaited rule requiring greater
due diligence requirements by banks and proposed a new rule to require
foreign-owned single member LLCs to register with the IRS. Treasury also
released new draft legislation specifically to increase transparency of the
ultimate owners of American companies and to strengthen the U.S. anti-money
laundering framework. Global Witness will be analyzing the new
regulations and legislative proposals. They have released the following statement
and background for reporters and will be available for interviews.
“It is important that Treasury is taking action to address gaping loopholes in the U.S. anti-money laundering framework, which leave the U.S. wide open to the world’s dirty money, but the devil is in the details of these proposals and it is likely more will need to be done,” said Stefanie Ostfeld from Global Witness. “Requiring banks to know the ultimate owners of their customers is an important step, however there appear to be weaknesses in Treasury’s final customer due diligence rule for banks that provide would-be money launderers with a blueprint for how to structure companies to avoid detection and continue to access American banks.”
The Treasury Department once supported bipartisan Congressional legislation that would require all Americans companies to disclose who owns them. In 2014, it proposed an alternative approach to collecting information about U.S. company ownership, but has not yet proposed specific legislation. Today’s announcement suggests that may have changed.
Global Witness and others have called on Congress to enact recently introduced bipartisan legislation that will help tackle the problem of anonymously-owned shell companies. By requiring updated disclosures about the real people who own or control American companies, law enforcement will have critical information that they need to combat all types of criminal activities.
“The recent scandal exposed by the Panama Papers underscores how anonymous companies are an urgent problem that the Administration and Congress should address by swiftly passing a strong bill that effectively ensures we know who owns and controls American companies”, said Ostfeld. "Should the Administration introduce specific legislative language for their alternative approach, the test will be whether the proposed bill allows broad access to company ownership information and that the right information is being collected at the time of incorporation and kept up to date — otherwise, the Administration risks muddying the waters by offering half-measures, which could undercut more comprehensive solutions and put the U.S. out of step with the rest of the world.”
The Obama Administration is also preparing for an anti-corruption summit hosted by the United Kingdom on May 12 in London whereglobal leaders aim to agree to common solutions to the global corruption crisis. This is an important opportunity for the Administration to take the following critical actions :
the real estate and luxury goods sectors to perform anti-money laundering checks to keep politicians who favor
the US as a safe haven for their ill-gotten gains from enjoying their fast
cars, boats and planes, and big houses in our backyard.
all companies bidding for federal contracts to report who really owns or controls
them in order to significantly reduce waste, fraud and abuse of taxpayer dollars.
Notes to editor:
View a fact sheet on recent Global Witness investigations HERE
For more information:
- See Global Witness’ report, The Great Rip Off on ways that anonymously-owned American companies harm national security, the vulnerable, poor countries and American taxpayers
- Watch how exposing anonymous companies could cut down on crime (Global Witness / TED)
- See Global Witness’ investigation featured on 60 Minutes, Undercover in New York - our hidden camera investigation reveals how suspect money can enter the US
- See Tackling corruption and promoting stability through beneficial ownership transparency for the business case for ending anonymous companies (The B Team)
- See Putting beneficial ownership transparency into practice for business use cases for corporate ownership information (B20)
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The Great Rip Off
Anonymous company owners and the threat to American interests.
Undercover in New York
Our hidden camera investigation reveals how suspect money can enter the U.S.
Anonymous Company Owners
Paper companies are the getaway cars for the world’s criminal and corrupt – we must take away the keys.