The Unites States has banned the operation of anonymous shell companies in the country with this new anti-corruption law seen as “historic” by campaigners.
This new legislation, was added to the annual National Defense Authorization Act, and on Friday, was passed by veto-proof majority in Congress.
According to these new rules, companies will need to provide “beneficial ownership” information to the Financial Crimes Enforcement Unit of the treasury department. These anonymous companies, which can be used in hiding funds obtained by criminals illegally, as well as foreign officials that are corrupt, would be banned effectively.
An advocacy group, Transparency International who teamed up with lawmakers to help craft the bill, referred to this new law as “historic” and “one of the most important anti-corruption measures ever passed by the US Congress.”
The US director of the group, Gary Kalman revealed that:
It’s a huge step forward in fighting illicit finance at home and around the globe. Simply put, corporate transparency means it will be harder for corrupt leaders and other criminals to hide and move stolen money through secretly-owned corporations.Gary Kalman
Previously, corporate secrecy rules have made it possible for anybody to create an anonymous shell company, where they could hide huge sums of money that won’t be identified. Corrupt criminals, cartel bosses, and foreign leaders have all hidden their ill-gotten gains by utilizing lax US laws.
This will change from now. This Corporate Transparency Act, will require that anyone creating a company in the United States give details of their name, identification number, date of birth, as well as other information. This information can be shared with law enforcement.
This act has also made the “willful evasion or deliberate false statements of its requirements” a federal crime, which can be punishable by almost three years in jail.