Incorporation Transparency and Law Enforcement Assistance Act Introduced Today
August 2nd, 2011
August 2nd, 2011
Global Financial Integrity
WASHINGTON, DC – Senators Carl Levin (D-MI) and Chuck Grassley (R-IA) introduced bi-partisan legislation today, which would require companies to disclose the names of the beneficial owners of corporations and limited liability companies (LLCs) when formed. Anti-money laundering proponents, law enforcement groups, and financial transparency organizations consider the legislation, known as the Incorporation Transparency and Law Enforcement Assistance Act of 2011, a crucial step toward strengthening law enforcement and keeping criminal and tax evading money out of the U.S.
“Criminals, kleptocrats, and tax evaders from around the world are taking advantage of this loophole in U.S. law to hide and launder illicit money here,” said Global Financial Integrity’s Legal Counsel & Director of Government Affairs, Heather Lowe. “This financial opacity puts law enforcement at a major disadvantage. Too often cases are dropped, or investigations are closed, due to a lack of evidence connecting the illicit funds held in accounts owned by anonymous corporations to the criminal owners of those companies.”
A Reuters investigative series into the impact of corporate secrecy in the U.S. found that a single address in Cheyenne, Wyoming was home to 2,000 registered companies. The report looks at how U.S. incorporation services sell low taxes, minimal fees, and ownership anonymity in Wyoming, Delaware, and Nevada. A second report in the series, released this week, looks at how Chinese companies have utilized these incorporation services to gain access to U.S. capital markets with very little regulatory oversight.
“The U.S. financial system is a playground for corrupt, criminal, tax evading individuals from other countries,” said Ms. Lowe. “It is far too easy to gain access to financial services in the U.S. through anonymous U.S. corporations, while it is far too difficult for law enforcement groups to figure out who is really behind those corporations.”
The bill is supported by law enforcement groups and both the U.S. Department of Justice and the U.S. Treasury Department have agreed to provide a total of $30 million from their forfeiture fund accounts to help offset any costs that may be incurred in implementing this legislation.
Key bill provisions include:
The full text of the legislation can be found here.
Monique Perry Danziger
+1 202 293 0740 ext. 222
The Task Force on Financial Integrity and Economic Development addresses inequalities in the global financial system that penalize billions of people, and advocates for improved transparency and accountability.
Global Financial Integrity is a coordinating committee and founding member of the Task Force on Financial Integrity & Economic Development .
For additional information please visit http://www.financialtransparency.org .