Wednesday, September 21, 2011

USA set to tackle beneficial ownership?

A little while ago, TJN-USA and the FACT coalition published a fact sheet, entitled Anonymous U.S. “Shell” Corporations: A National Security Code Red. It noted, as we never tire of reminding people:
American and foreign terrorists, narco-traffickers, arms dealers, corrupt foreign officials, tax evaders and other criminals easily and regularly set up U.S. shell companies, without providing any information about who owns or controls such companies, to launder their criminal money in the United States.
. . .
there is a solution – ensure that each time a company is created within the U.S., information on the true owners and controllers of the company is also collected.

And there's much more in there, of course. Now we are absolutely delighted to see that there appears to have been action in the United States on this.

Take a look now at President Obama's new Open Government Partnership, which contains this fantastically useful section:
"8. Increase Transparency of Legal Entities Formed in the U.S.
Legal entities can provide access to the international financial system for illicit actors and may frustrate financial investigations. To increase transparency over the next year, we will:
• Advocate for Legislation Requiring Meaningful Disclosure. As a critical element of a broader strategy to safeguard the international financial system from such abuse of legal entities, the Administration will advocate for legislation that will require the disclosure of meaningful beneficial ownership information for corporations at the time of company formation."
Now this, in itself, is not new legislation. But it is important. Heather Lowe of Global Financial Integrity, who has been highly active in this area, sent us this appraisal:
"While the Action Plan is a voluntary initiative, at the end of the year each government has to publish a self-assessment on its progress on their Actions and Civil Society is also supposed to provide an assessment on the progress. Civil society organizations in the US have been working with the government on our Action Plan and have been told that the government sees everything in this document as achievable within a year. They have ideas on how to achieve some of it, but welcome ideas from civil society and the public on the best ways to implement any or all of the Actions so that they do so in the most publicly accessible and useful way possible. They also consider this to be a living document and will consider adding new things to the Action Plan if they receive good ideas from civil society or the public.

There is a real energy about the initiative among the Administration staff (from several different agencies), and that is key to making this a successful initiative."
And, as Global Witness reminds us, there is legislation put forwards in this respect:
"Senator Levin’s Incorporation Transparency and Law Enforcement Assistance Act would require states to collect this information. The bill already has the support of a number of U.S. law enforcement agencies, whose investigations are often stifled when they reach a Delaware, Nevada or Wyoming company whose real owners have not been declared. Global Witness has previously revealed how Teodorin Obiang, playboy son of the President of corrupt, oil-rich Equatorial Guinea, bought a $35 million Malibu mansion using a U.S. front company, despite his $6,000 a month salary."
Excellent progress. We also believe that hard-hitting reporting by Reuters has contributed to state-level initiatives in this respect.


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