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The so-called Corporate Transparency Act was included in the U.S. Defense Allowances Bill passed by Congress on Friday night.
The United States removed an important channel for money laundering and tax evasion through a new law that now requires the disclosure of the names of ghost business owners, widely used to hide from the tax thousands of millions of dollars.
The so-called Corporate Transparency Act was included in the U.S. Defense Allowances Bill passed by Congress on Friday night, bypassing President Donald Trump’s veto.
“This is the most important step we could take to better protect our financial system from abuse,” stressed Ian Gary, executive director of the FACT Coalition, which pushed for approval of the regulations.
Facade business owners must, in accordance with this law, give their identity to an agency of the U.S. Treasury Department, the Financial Crimes Enforcement Network (FinCEN).
“For years, experts routinely ranked joint-stock ghost companies (…) as the biggest weakness in our money laundering safeguards,” Gary said.
Only the Treasury Department and the police will have access to this information, so it will always be protected from the general public. But for transparency advocates, this is already a big step forward against corruption, organized crime and tax evasion.
While much attention has been paid to tax havens such as Panama or the Cayman Islands, experts argue that the size of the U.S. economy and therefore its ability to absorb billions of dollars relatively unnoticed , became a central element in transforming illicit funds into net money.
In early 2020, the Tax Justice Network ranked the Cayman Islands and the United States as the champions in allowing the concealment of finances from the eyes of the law and tax collection.
The United Nations estimates that between $ 800 billion and $ 2 trillion are laundered each year through the global financial system.