U.S. senators launch bill to broaden shell companies' disclosures

FILE PHOTO: Senator Tom Cotton (R‑AR) arrives for a Senate Intelligence Committee hear­ing eval­u­at­ing the Intelligence Community Assessment on “Russian Activities and Intentions in Recent US Elections” on Capitol Hill in Washington, U.S., May 16, 2018. REUTERS/Joshua Roberts

A bipar­ti­san group of U.S. sen­a­tors on Monday announced they were intro­duc­ing a bill to tough­en U.S. laws requir­ing shell com­pa­nies to dis­close their true own­ers’ identity.

Two Republicans on the Senate Banking Committee, Tom Cotton and Mike Rounds, and Democratic com­mit­tee mem­bers Mark Warner and Doug Jones said their pro­posed new law would improve cor­po­rate trans­paren­cy, strength­en nation­al secu­ri­ty and make it eas­i­er for inves­ti­ga­tors to crack down on illic­it finan­cial activ­i­ty by ter­ror­ists, drug deal­ers and oth­er criminals.

The sen­a­tors said one of the prin­ci­pal aims of the new law would be to require shell com­pa­nies, which the sen­a­tors said were “often used as fronts for crim­i­nal activ­i­ty” to dis­close their ulti­mate, real own­ers to the U.S. Treasury Department.

The sen­a­tors said the bill would also update out­dat­ed fed­er­al anti-mon­ey laun­der­ing laws by improv­ing com­mu­ni­ca­tions between law enforce­ment and reg­u­la­to­ry agen­cies and the finan­cial indus­try and “facil­i­tat­ing” the adop­tion by the indus­try and reg­u­la­tors of advanced technology.

In the House of Representatives, mean­while, Democratic rep­re­sen­ta­tive Carolyn Maloney said the Financial Services Committee intend­ed this week to con­sid­er a bill intro­duced by a bipar­ti­san group of mem­bers which con­tains sim­i­lar requirements.

The House bill would require com­pa­nies to dis­close their true own­ers to fed­er­al author­i­ties at the time the com­pa­ny is formed and would require such own­ers to pro­vide their names, dates of birth, cur­rent address­es and dri­vers license or valid pass­port numbers.

Senators spon­sor­ing their new­ly-intro­duced bill said they had named it the Improving Laundering Laws and Increasing Comprehensive Information Tracking of Criminal Activity in Shell Holdings (ILLICIT CASH) Act.

As a for­mer U.S. Attorney, I am all too famil­iar with crim­i­nals hid­ing behind shell cor­po­ra­tions to enable their ille­gal behav­ior,” Jones said, not­ing U.S. anti-mon­ey laun­der­ing laws had not kept pace with increas­ing­ly sophis­ti­cat­ed efforts by crim­i­nals and ter­ror­ist groups to move illic­it funds around the world.

Our draft bill makes it eas­i­er for law enforce­ment to track ill-got­ten gains with­out bur­den­ing legit­i­mate busi­ness­es,” Cotton said.

One key pro­vi­sion of the pro­posed Senate leg­is­la­tion would be to cre­ate fed­er­al report­ing require­ments that “all ben­e­fi­cial own­er­ship infor­ma­tion” of U.S. reg­is­tered cor­po­ra­tions would be main­tained in a “com­pre­hen­sive fed­er­al data­base” acces­si­ble to both fed­er­al and local inves­ti­ga­tors, the sen­a­tors said.

The bill also con­tains pro­vi­sions to improve the effec­tive­ness of the Financial Crimes Enforcement Network, the Treasury agency which is cur­rent­ly sup­posed to take the lead in mon­i­tor­ing sus­pi­cious finan­cial trans­ac­tions. It also would com­pel for­eign banks to com­ply with U.S. agen­cies’ sub­poe­nas and autho­rize con­tempt sanc­tions against banks which fail to comply.

Reporting By Mark Hosenball ;
Editing by Chris Reese

Original source: REUTERS