US bans anonymity for shell companies
Aerial view of the US Department of the Treasury.
AP - Patrick Semansky
Text by: RFI Follow
3 min
A new US law requires owners of shell companies to disclose their identity to the Treasury Department, on pain of a fine of $ 10,000 and two years in prison.
This type of company, widely used in certain American states as in tax havens, allows both tax evasion and money laundering.
According to the UN, between 800 and 2000 billion dollars are laundered each year in the world.
Much awaited by organizations fighting against financial crimes, the measure will make it possible to better fight against corruption.
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The front company is to the financial system what the wand is to the magician: a means of distracting and concealing the sleight of hand.
Basically, to hide a financial transaction and escape the prying eyes of the tax authorities or the police, it is often enough to transfer your money to a shell company, located either in a tax haven or in a territory with light taxation.
Tax evasion and money laundering are therefore greatly facilitated by these companies.
The United States, because of the enormous size of its economy, is one of the countries where this practice is most prevalent.
The system works better the more the company is anonymous.
Database not made public
This will no longer be the case in the United States, where owners of shell companies will have to deposit their identity with the US Treasury, in other words with the tax authorities.
This is a major step forward, welcome NGOs like Transparency International.
America tends to be favored by criminal groups concerned with laundering the profits from their illicit activities.
🔵 GREAT NEWS!
The US Corporate Transparency Act became law yesterday!
The bill - that @transparencyUSA helped to craft - will effectively end anonymous companies and is the most important anti-corruption reform in decades.
https://t.co/COyl3kPNYT
- Transparency Int'l (@anticorruption) January 2, 2021
By doing so, Washington is taking a considerable step towards a greater moralization of financial flows.
Even if the NGOs regret that the database is not available to the general public and to whistleblowers.
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