House of Representatives of the US moved on this week Tuesday to stop the practice of opening anonymous shell companies to thwart financial crime and money laundering.
Voted 249-173 by 224 Democrats and 25 supporting Republicans, the Corporate Transparency Act was approved. It requires US companies to disclose their real owners.
The legislation advocated by the Financial Accountability and Corporate Transparency Coalition closes the loophole with which one can incorporate an anonymous shell company in the US.
At the moment, no US states require companies to provide details of their ultimate owner.
New rules would require limited liability companies along with corporations to:
- Disclose ownership data to the Treasury Department’s Financial Crimes Enforcement Network (FINCEN). That body will keep the information in an internal database so that other law enforcement agencies could review data upon request.
- Disclose their beneficial owners, including names and identification numbers from a passport, drivers’ license or other government identity card, at the time of their incorporation
- File annual updates listing their current beneficial owners and any ownership changes that occurred during the previous year
- Define a beneficial owner as anyone who exercises substantial control, receives significant economic benefits or owns 25% or more of the company
The US Senate must also approve the Corporate Transparency Act and signed by President Donald Trump before it stands as the law. Republicans control the US Senate, so the future of the new legislation is not decided yet.
