Washington, DC – The FACT (Financial Accountability and Corporate Transparency) Coalition today praised the passage of legislation in the United Kingdom to crack down on the use of anonymous shell companies with the creation of a public registry of corporate ownership. The new law brings increased pressure on the United States to follow suit.
Anonymous companies have long been a prime vehicle to launder proceeds from corruption, crime, tax evasion, and other illicit activities. FACT Coalition member Global Witness recently reported on dozens of cases of U.S. anonymous shell companies being used to defraud Medicare, embezzle from public schools, hide the owners of expensive real estate and scam the elderly. Creating a pubic registry of beneficial ownership information, or the true human owners, as the legislation does, provides a useful and effective tool to combat these criminal activities.
The governments of the G20 committed to implementing rules requiring the collection of ownership information. With the passage of the bill, the UK goes a step further by making that information public. Several other nations are following quickly. Denmark will be creating a similar registry later this year, and the European Union voted to do the same last March.
All of this stands in stark contrast to the United States, which is considered to be the second easiest country, behind Kenya, in which to open anonymous companies to hide criminal activity and launder dirty money. However, legislation proposed in both the U.S. House and the Senate in the previous session of Congress would provide the tools law enforcement needs to fight money-laundering, tax evasion and other illicit activities. Similar legislation is expected to be introduced again in this Congress.
“The UK deserves praise and credit as it sets an example for the rest of the world to follow in fighting anonymous companies with a public ownership registry,” said Rebecca Wilkins, FACT’s executive director. “The question remains if the United States wishes to continue its dubious reputation as a place to hide.”
“Most real American business owners are proud to have their names on their front doors and incorporation papers,” said Bryan McGannon, policy director for the American Sustainable Business Council (ASBC). “Hiding a business’ true ownership identity with a shell corporation creates unnecessary risks and added costs for legitimate businesses and for the economy.”