In an effort to bring transparency to opaque ownership, the Treasury Department will require company owners to enter personal identification details
National security and law enforcement officials say the rules will be a useful tool in exposing shell companies—firms that exist only on paper—and help prevent and disrupt illegal activities.
Many companies are not currently under any federal obligation to identify the actual beneficiary of their operations. Many state regulations enable owners to hide their identities through shell companies or through agents registering companies on their behalf.
This has allowed fraudsters, fraudsters, drug cartels and others to hide their transactions, making it difficult for banks, law enforcement, and others trying to stop illegal financial activities.
Treasury Secretary Janet Yellen said in a statement that the proposed rules would help fix a problem that has undermined national security and fueled inequality in the US and abroad. He called it “a major step toward addressing the gaps in our corporate transparency framework that allow corruption to flourish and illegal money to flow into the United States.”
Under the proposed rules, primary owners of both foreign and domestic companies registered in the US must provide their name, date of birth, address and a unique identification number from an approved identification document. Law enforcement would then be able to access a federal corporate beneficiary ownership database.
The Biden administration unveiled the proposal this week as part of its broader anti-corruption campaign. The action follows a mandate enacted by Congress last year.
Treasury officials set a public-comment deadline in early February, and officials said the department aims to finalize the rules as a priority.
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