Anti-corruption campaigners have lobbied for years to close loopholes that allow criminals to hide money in the US. Last year, the US overtook Switzerland in a global ranking of financial secrecy hotspots. It currently ranks second in the world in the Tax Justice Network’s Financial Secrecy Index 2020, behind only the Cayman Islands.
Corporate secrecy rules have previously made it possible for anyone to create an anonymous shell company, into which they could hide enormous sums of money without being identifiable. Corrupt foreign leaders, cartel bosses, and criminals have all made use of lax US laws to hide their ill-gotten gains.
That will now change. The new Corporate Transparency Act, passed with bipartisan support, requires anyone forming a company in the US to provide their name, date of birth and unique identification number. That information can be shared with law enforcement —including those acting on behalf of a foreign law enforcement agency — as well as for national security and intelligence purposes.
The act also makes “deliberate false statements or willful evasion of its requirements” a federal crime, punishable by up to three years in jail.
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