The United States is adopting the most sweeping anti-corruption reforms the country has seen in decades – and will do so with remarkably strong bipartisan support and little fanfare.
With veto-proof majorities, Congress recently passed the National Defense Authorization Act, an annual bill typically intended to support U.S. defense spending. This year’s iteration is part of a law known as the Corporate Transparency Act, which targets something specific: anonymous front companies, tools that have enabled criminal networks, perpetrators of human rights violations. man and tax evaders around the world to flourish while hiding their financial tracks.
The bill, which is currently awaiting the president’s signature, will require true human owners of U.S.-formed companies to disclose their identities at the time of their formation and during any changes – indeed. ban anonymous front companies. Currently, the United States is the easiest place in the world to form an anonymous shell corporation that can be used for money laundering, crime, and corruption.
A multi-year infiltration investigation carried out by Global witness as well as numerous reports published by the New York Times denounced the criminal enterprises that anonymous shell companies allow. In every state, it takes more information to get a library card than it does to start a secret society, and the United States is the world’s greatest founder of corporations. Passage of the law will be a blow to those who have long abused the secrecy offered by our financial system.
Many of the issues plaguing our nation and the international community have links to anonymous shell companies, which act as perfect vehicles for a financial getaway. After all, given the efficiency with which anonymous shell companies hide the finances of perpetrators – authorities often see their investigations tarnished as soon as they encounter one of these shell companies – which criminal network would not take full advantage of everything? this secret?
Those who use and abuse anonymous typos to hide in anonymity run the gamut. From tax cheaters hiding their finances and bleeding local coffers to drug cartels flooding America’s streets with opiates turning into anonymous shells to launder their profits, a wide range of criminal forces have used anonymous companies to cover their tracks.
Tackling anonymous shell companies will not solve economic inequalities – most of the very rich are people who take advantage of perfectly legal loopholes in the law – but it will increase fairness by forcing everyone to follow the rules most. honest and hardworking Americans are already working. to follow.
It will also reduce a wide variety of international crime and wrongdoing currently plaguing the U.S. financial system. The people and companies responsible for the continued environmental devastation around the world often hide their environmental crimes behind anonymous front companies, like the European company Norsudtimber, which covers illegal logging activity in the Democratic Republic of the Congo in an anonymous shell network. The same goes for repressive regimes abroad, from Moscow to Pyongyang to Damascus, which use anonymous shell companies to avoid sanctions and fund their authoritarian efforts.
Environmental criminals, authoritarian regimes, tax evaders and financial criminals, drug traffickers, wildlife poachers and gun traffickers – all those responsible for the most heinous crimes have turned to anonymous shell companies. And too often, given America’s outsized role in producing anonymous shell companies, the entities at the heart of these criminal networks are produced here in the United States.
The pending bill to ban anonymous shell companies in the United States will help address these issues. Not only will this prevent criminal actors from abusing America’s tools of financial secrecy to expand their own illicit empires, it will also be the biggest anti-corruption step the United States has taken in decades.
Plus, the bill comes with a wide – and gratifying – array of bipartisan support, with Democratic and Republican lawmakers co-sponsoring anti-corruption legislation. Even in these polarized times, lawmakers from all walks of life are realizing how necessary it is to end the abuses of anonymous shell companies.
The Corporate Transparency Act is a testament to how much patriotic Americans still have in common – and everything the United States can, and should, lead when it comes to global efforts to combat the practices corrupt financials.
Morris Pearl is President of Patriotic millionaires and a former general manager of Black rock.
More opinion of Fortune:
- Uber and Lyft’s broken business model takes a heavy toll on society
- Men named Jo (h) n have written so many of the best business books of 2020 like all women combined
- It’s time for progressive white women to do more for racial equality
- The web must change its economic model if he wants to become truly global and multilingual
- Biden can create better jobs giving workers a place at the board table