Wyden, Rubio Unveil Bill to Increase Transparency, Crack Down on Illicit Financial Crimes
Bipartisan legislation follows abuses exposed by the Panama Papers leaks
Washington, D.C. – Senate Finance Committee Ranking Member Sen. Ron Wyden, D-Ore., and Senator Marco Rubio, R-FL., today, introduced the Corporate Transparency Act of 2017, S. 1717, to prevent individuals from using anonymous shell corporations to engage in illicit activities like money laundering, human trafficking, fraud and terrorist financing.
Under current state incorporation laws, the ultimate owners of a limited liability company (LLC), or shell corporation, are not required to be disclosed. The Wyden-Rubio legislation would reverse this and require the beneficial owners of U.S.-based shell corporations to appropriately disclose their identities. This transparency will give law enforcement officials the information they need to investigate financial crimes. Individuals who fail to submit accurate ownership information will be subject to financial penalties or jail time.
“For too long criminals have been able to hide behind shell companies to finance terrorism, launder money and defraud the government at the expense of American taxpayers,” said Wyden. “This kind of lawlessness could be directed by individuals with access to the highest levels of government. Congress must give state and federal enforcers the information they need on day one to effectively cut off the flow of dark money to extremely dangerous people.
“Unsurprisingly, anonymity can lend itself well to hiding nefarious activity,” said Rubio. “We must work to ensure that law enforcement has the basic information, tools, and authorities at its disposal to identify and disrupt illicit activities affecting our communities and our national security, whether its human trafficking, healthcare fraud, transnational corruption, or terrorism financing.”
"Anonymous companies have been used for a wide range of dangerous and illicit activities, including as fronts for rogue countries to evade sanctions, to cloak arms dealers shipping weapons into conflict zones, to fuel the opioid crisis in communities across the country, to engage in human trafficking, to rip off Medicare, and to undermine the safety of our troops through the sale of faulty equipment," said Clark Gascoigne, deputy director of the Financial Accountability and Corporate Transparency (FACT) Coalition. "This bill demonstrates the growing momentum for ending these abuses. Since the House companion was introduced a few weeks ago, multiple Members of Congress from both parties have added their names as cosponsors. Sen. Wyden and Sen. Rubio's leadership underscores that the interest in incorporation transparency is not just bipartisan, but bicameral as well."
“Allowing the use of shell companies with anonymous ownership makes it too easy for criminals to launder money and hinders law enforcement’s ability to prevent and detect criminal activity,” said Greg Baer, President of The Clearing House Association. “The Clearing House welcomes Senators Wyden and Rubio’s introduction of this legislation, which complements bipartisan legislation in the House of Representatives. Clearly momentum for fixing this loophole is building and The Clearing House strongly urges the Senate to address this issue without delay.”
Last year, documents known as the Panama Papers leaked from the Panamanian law firm Mossack Fonseca. These papers highlighted the use of American anonymous shell companies for potential money laundering and tax evasion in the United States. Following that leak Wyden urged the Treasury Department and the IRS to assess the effectiveness of federal disclosure requirements intended to fight the misuse of shell companies.
The Corporate Transparency Act of 2017 is the Senate companion bill to House legislation introduced by Congresswoman Carolyn Maloney, D-N.Y., and Congressman Peter King, R-N.Y., earlier this summer.
A fact sheet on the Wyden-Rubio bill can be found here.
Text of the Wyden-Rubio bill text can be found here.
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