Maloney Announces Broad Coalition of Support for Groundbreaking Anti-Money Laundering Legislation

May 7, 2019
Press Release
The House Financial Services Committee is expected to vote on Maloney’s Corporate Transparency Act this week

WASHINGTON, DC – Congresswoman Carolyn B. Maloney (D-NY) today announced that her legislation (H.R. 2513, the Corporate Transparency Act) to crack down on money laundering in the U.S. through anonymous shell companies is gaining strong support from a broad coalition of stakeholders on and off Capitol Hill. More than 60 national security experts, 108 NGOs, the Delaware Secretary of State, the Fraternal Order of Police, the National District Attorneys Association, human rights organizations and others have sent letters of support to Congress urging passage of this critical legislation. Letters of support are linked below.

“This strong show of support for this badly needed anti-money laundering legislation is very encouraging ahead of Wednesday’s Committee markup. Cracking down on anonymous shell companies just makes common sense and is something that everyone should be able to get behind. I’m glad that once again this is a bipartisan bill with support from groups representing all different perspectives; from law enforcement to good governance groups and financial institutions.”

Letters of support:

 

BACKGROUND

Anonymous incorporation isn’t difficult for criminals to do — no U.S. states currently require companies to provide the identities of the company’s true, beneficial owners. This makes it very easy for criminals and other bad actors to manipulate the system and launder or hide money via anonymous shell companies.

What This Bill Does:

  • Requires corporations and limited liability companies disclose their true, beneficial owners to FinCEN at the time the company is formed.
  • Establishes minimum beneficial ownership disclosure requirements: must provide beneficial owners’ name, date of birth, current address, and driver’s license or non-expired passport number.
  • Requires companies to file annually with FinCEN a list of its current beneficial owners, as well as a list of any changes in beneficial ownership that occurred during the previous year.
  • Provides civil and criminal penalties for persons who willfully submit false or fraudulent beneficial ownership information, or who knowingly fail to provide complete or updated beneficial ownership information.

Provides Much-Needed Transparency While Avoiding Excessive Burdens:

  • Beneficial ownership information collected by Treasury or the states will only be available to: (1) law enforcement; and (2) financial institutions, with customer consent, for purposes of complying with their “Know Your Customer” requirements under Anti-Money Laundering law.
  • It is narrowly tailored so as not to be overly burdensome to either businesses or the states themselves — the bill targets companies that are more likely to be shell companies.
  • Many companies are already required to disclose their beneficial owners, such as Federally regulated banks, credit unions, investment advisers, broker-dealers, state-regulated insurance companies, churches, and charitable organizations. As such, these companies are exempt from the bill’s requirements.
  • Companies with over 20 employees and over $5mm in gross receipts or sales, and which have a physical presence in the U.S., are also exempt from the bill’s requirements, because companies that employ this many people and that have legitimate, business-related income are very unlikely to be anonymous shell companies that were created to hide or launder illicit funds.

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