National Defense Authorisation Act: ‘Historic’ anti-money laundering provisions introduced

By Walt Finch

ANONYMOUS shell companies are now banned in the US thanks to provisions in this year’s National Defense Authorisation Act (NDAA).

The significant anti-money laundering and transparency provisions, labelled as “historic” by advocacy group Transparency International, are seen as long overdue in one of the world’s most prominent financial secrecy hotspots.

The Corporate Transparency Act includes provisions for a national register of beneficial ownership that make limited liability companies report the identities of the individuals who ultimately own and control them to the Department of the Treasury’s Financial Crimes Enforcement Network (FinCEN).

Anonymous shell companies and the global illicit finance they can enable are considered a threat to US national security by the Biden administration.

On top of being a conduit for criminal money to enter the US financial system, they are a favoured means of authoritarian governments to launder public funds embezzled by corrupt officials and as a strategic tool of influence within the US itself. 

While previously Limited Liability Company (LLC) ownership could list managers, registered agents or even other LLCs, the new register itself will require the name, address, date of birth and an ID number of the real owner.

The registry will not be open to the public but the records will be kept by the Treasury Department.

The result will be that criminals, sanctioned individuals and oligarchs will no longer be able to conduct their business anonymously to the US government.

Paul Massaro of the Helsinki Commission, an independent commission of the US Federal Government, told Redaction Politics: “We’ve provided the vector for foreign influence into our political system through anonymous shell companies.

“Dirty foreign money provides an avenue for influence via finding its way directly into elections, filling the pockets of paid enablers, such as lawyers, consultants, and lobbyists, and finally providing access to elite circles and high society.

“If you own half the real estate in downtown Cleveland through anonymous shell companies, then you’re going to have political influence by definition.This strikes directly at all the threats resulting from dirty money. ”

The annual defence spending bill passed the House on 8 December with a ‘veto-proof majority’ but was vetoed by President Donald Trump anyway on 23 December.

The House voted to override Trump’s veto by 322 to 87 and the Senate followed suit on New Year’s Day by 81-13, meaning that the Corporate Transparency Act was signed into US law on the same day.

Featured Image: Pixabay

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