Tuesday, August 02, 2011

U.S. Bill Introduced to Shed Light on Corporate Secrecy

Bipartisan Bill Introduced to Shed Light on Corporate Secrecy

WASHINGTON, August 2, 2011 – Senator Carl Levin and Senator Charles Grassley introduced the Incorporation Transparency and Law Enforcement Assistance Act, which would require corporations to provide information about who owns or controls the corporation and benefits from its existence.

This bill is supported by the Financial Accountability and Corporate Transparency (FACT) coalition, which includes a broad range of organizations with an interest in seeing the loopholes closed due to their impact on jobs, critical programs, small businesses, human rights, corruption and national security.

“The United States cannot expect cooperation from other countries when it comes to corporate accountability, transparency and tax reporting while looking the other way here at home,” said Nicole Tichon, Executive Director of Tax Justice Network USA and a founding member of the FACT coalition.

“Until this law is passed, foreign corrupt politicians, terrorists and drug traffickers will continue legally to hide their identities and their dubious assets behind the secrecy provided by American companies,” said Stefanie Ostfeld, Global Witness Policy Advisor.

The bill will move to the Senate Committee on Homeland Security and Governmental Affairs.

Read more about the bill here. Read Senator Levin's Floor Statement about the bill here, and the text of the bill here.

Read the Financial Accountability and Corporate Transparency coalition’s FACT Sheet on anonymous corporations here.

CONTACT: Nicole Tichon
August 2, 2011 Executive Director
Tax Justice Network USA
Tel. (+1) 202-758-9552
Key provisions of the bill include:
Beneficial Ownership Information. Require States directly or through licensed formation agents to obtain the names of beneficial owners of corporations or limited liability companies (LLCs) formed under a State’s laws, ensure this information is updated, and provide the information to law enforcement upon receipt of a subpoena or summons.

Identification Information. Obtain beneficial owners’ names, addresses, and a U.S. drivers license or passport number; or if the owners do not have either a U.S. drivers license nor passport, information from their non-U.S. passports.

Shelf Corporations.
Require formation agents that sell “shelf corporations” – corporations formed for later sale to a third party – to provide beneficial ownership information for those corporations.

Penalties for False Information.
Establish penalties for persons who knowingly provide false beneficial ownership information or willfully fail to provide required beneficial ownership information.

Anti-Money Laundering Safeguards. Require paid formation agents to establish anti-money laundering programs to ensure they are not forming U.S. corporations or LLCs that facilitate misconduct. Attorneys using paid formation agents would be exempt from this requirement.

GAO Study. Require GAO to complete a study of State beneficial ownership information requirements for partnerships, charities, and trusts.

Why, we had a story about some of the nefarious purposes of secret U.S. corporations only yesterday.


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