WASHINGTON – U.S. Sen. Mark R. Warner (D-VA) said today that he was optimistic about the chances of passing bipartisan anti-money laundering legislation this Congress after the House voted yesterday to advance a bill that would curb illicit financial activities by requiring companies to disclose their true beneficial owners, and increasing information-sharing between law enforcement, financial institutions, and the Treasury Department.
Last month, Sen. Warner – along with Sens. Tom Cotton (R-AR), Doug Jones (D-AL), Mike Rounds (R-SD), Bob Menendez (D-NJ), John Kennedy (R-LA), Catherine Cortez Masto (D-NV), and Jerry Moran (R-KS) – introduced the Improving Laundering Laws and Increasing Comprehensive Information Tracking of Criminal Activity in Shell Holdings (ILLICIT CASH) Act, which would, for the first time, require shell companies – often used as fronts for criminal activity – to disclose their true owners to the U.S. Department of Treasury.
“Today’s House vote is an encouraging sign of progress on this important issue, and it demonstrates that there is widespread support in Congress for reforming our laws to combat money laundering, fight crime, and improve our national security,” said Sen. Warner following the House vote. “I appreciate the Treasury Department’s willingness to work with Congress on this matter, and am hopeful that the Senate will soon move forward on our bipartisan proposal to crack down on shell companies, while also prioritizing data security and protecting small businesses from unnecessary regulation.”
According to research from the University of Texas and Brigham Young University, the U.S. remains one of the easiest places in the world to set up an anonymous shell company. A recent report by Global Financial Integrity demonstrates that, in all 50 U.S. states, more information is required to obtain a library card than to register a company. Human traffickers, terrorist groups, arms dealers, transnational criminal organizations, kleptocrats, drug cartels, and rogue regimes have all used U.S.-registered shell companies to hide their identities and facilitate illicit activities. Meanwhile, U.S. intelligence and law enforcement agencies find it increasingly difficult to investigate these illicit financial networks without access to information about the beneficial ownership of corporate entities involved.
The ILLICIT CASH Act would crack down on anonymous shell companies by requiring these companies to disclose their true owners to the U.S. Department of Treasury. It would also update decades-old anti-money laundering (AML) and combating the financing of terrorism (CFT) policies by giving Treasury and law enforcement the tools they need to fight criminal networks. A section-by-section analysis of this bill is available here. A one-pager is available here. The full text of the bill is available here.