The Department of the Treasury (the « Department » or the « Treasury ») is committed to increasing the transparency of the U.S. financial system and strengthening the U.S. AML/CFT framework. Deputy Finance Minister Wally Adeyemo noted in November 2021 that « we are already taking concrete steps to […].] Corruption and making the U.S. economy – and the global economy – fairer. One of the most important steps in these steps is our work on the declaration of beneficial ownership. Kleptocrats, human rights violators and other corrupt actors often exploit complex and opaque corporate structures to hide and launder the proceeds of their corrupt activities. They use these shell companies to hide their true identity and the illegal sources of their funds. By requiring beneficial owners — that is, the people who own or control a business — to disclose their assets, we can much better identify funds that come from corrupt sources or abusive means. [10] As he pointed out in December 2021, « Orruption thrives in the financial shadows – in shell companies that disguise the true identity of owners, in offshore jurisdictions with lax anti-money laundering regulations, and in complex structures that allow the rich to hide their income from government agencies.
For too long, corrupt actors have settled in the darkest corners of the global financial system, hiding the profits from their illegitimate activities in our blind spots. An important part of our anti-corruption work is to change that – to put these areas in the spotlight and use what we find to deter and prosecute corruption. [11] Following the release of the 2016 FATF report, Officials in the Department and the Department of Justice continued to advocate working with Congress on beneficial ownership legislation that would require companies to declare adequate, accurate, and up-to-date filing materials at the time of the creation of a legal entity. In addition, between Congress` initial efforts to require beneficial ownership declaration through the Transparency of Incorporation and Assistance in The Implementation Assistance Act of 2008 and the 2016 FATF report, previous CTA laws continued to be introduced in each Congress. The introduction of the Corporate Transparency Act of 2017 in June 2017 (in the U.S. House of Representatives) and August 2017 (in the U.S. Senate) followed the FATF report in 2016. In November 2017, Assistant Secretary of the Treasury Jennifer Fowler, head of the U.S. FATF delegation at the time of the 2016 FATF report, highlighted the significant vulnerability identified by the FATF before the Senate Judiciary Committee, noting that « this has allowed criminals to protect their true identity when they set up businesses and gain access to our financial system. » She also noted that while the Treasury Department`s 2016 CSD rule is an important step forward, there is still more work to be done with Congress to find a solution that would involve collecting BOI when creating a legal entity. [36] While the U.S. government has tools capable of obtaining certain BOI, their limitations and the time and cost of their successful deployment demonstrate the significant benefits that a centralized information repository would provide to law enforcement agencies. As Congress stated in CTA, « Money launderers and others involved in business activities intentionally transact through corporate structures to avoid detection, and may overlay such structures.
in different secret jurisdictions, so that whenever an investigator receives ownership records for a domestic or foreign company, the newly identified company is another business unit, which requires a repetition of the same process. [57] In February 2020, then-Treasury Secretary Steven T. Mnuchin testified at a Senate hearing on the president`s fiscal 2021 budget that the lack of information about who controls shell companies is « a glaring hole in our system. » [71] In his December 9, 2020 statement accompanying the Anti-Money Laundering Act, Senator Sherrod Brown, then the most senior member of the Senate Committee on Banking, Housing and Urban Affairs and one of the lead authors of the enacted CTA, said that the BOI reports « will help solve long-standing problems for U.S. law enforcement. It will help them investigate and prosecute cases of terrorism, arms proliferation, drug trafficking, money laundering, Medicare and Medicaid fraud, human trafficking, and other crimes. And it will provide easy access to this information under long-established and effective privacy rules. Without these reforms, criminals, terrorists and even rogue states could continue to use shell companies layer after layer to conceal and launder illicit funds.