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This Wednesday, Representatives Peter King (R-NY) and Carolyn Maloney (D-NY) introduced the Corporate Transparency Act (H.R. 3089). Senators Chuck Grassley (R-IA) and Sheldon Whitehouse (D-RI) also introduced their companion bill, the True Incorporation Transparency for Law Enforcement (TITLE) Act (S. 1454). NHPIRG applauds the introduction of these bills, which would put an end to anonymous shell companies in the U.S.
If enacted, these bills would give law enforcement an important tool for investigating a number of crimes that are facilitated by money laundering through anonymous shell companies. The U.S. is the second easiest country in which to incorporate a business without listing the real owners and beneficiaries of the company’s operations. In some states, getting a library card requires more identifying information than incorporating a company.
“Consumer scams, defrauding taxpayers, tax evasion, secretive campaign spending, corruption, sanctions evasion, drug trafficking, and human trafficking are all facilitated by anonymous shell companies,” said Allie Robins, NHPIRG Tax and Budget Associate. “The solution is to simply strike ‘anonymous’ out of the equation. When criminals can disappear behind a shroud of anonymity to launder their ill-earned money, law enforcement loses the trail and the American people are worse off for it.”
NHPIRG has worked in conjunction with the Financial Accountability and Corporate Transparency (FACT) Coalition to advocate for the establishment of a law that would require the government to collect information about the identities of the real, “beneficial” owners of companies operating in the U.S. If enacted, the Corporate Transparency Act would:
Establish minimum beneficial ownership disclosure requirements that would mandate that a company must provide beneficial owners’ names, current addresses, and legal identification upon incorporation.
Require the Treasury Department to collect beneficial ownership information if a state opts to not enact its own procedures.
Provide civil penalties for persons who submit false or fraudulent beneficial ownership information, or who fail to provide complete or updated beneficial ownership information.
This solution is supported across the aisle and by small businesses, banks, law enforcement, faith groups, and a number of other organizations and individuals invested deeply in protecting the public from bad actors.
“There is no legitimate business reason for a company to operate anonymously,” said Robins. “Enacting the Corporate Transparency Act or the TITLE Act would address a far reaching problem with a simple solution, making Americans safer and sending criminals packing.”
NHPIRG urges Congress to support this legislation and empower law enforcement to root out some of the shadiest characters operating in the U.S. today.
Click here to read more about crimes and wrongdoing facilitated by anonymous shell companies.
Click here to read the official press release from Representative Carolyn Maloney.
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