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Treasury Secretary Janet Yellen announced that 100,000 companies have signed up for a new database that collects corporate ownership information aimed at uncovering the identities of shell company owners.
WASHINGTON — Treasury Secretary Janet Yellen said 100,000 companies have joined a new database collecting “beneficial ownership” information on companies as part of the government’s new effort to uncover the identities of shell company owners. Announced.
In prepared remarks for Monday’s announcement, Yellen said the Treasury Department’s new database collecting beneficial ownership information sends a message that “America is not a haven for dirty money.” .
Yellen is scheduled to visit the Treasury Department’s Financial Crimes Enforcement Network (also known as FinCEN) in Vienna, Virginia, to discuss the launch of the database in the new year. He will also detail upcoming real estate regulations aimed at increasing transparency for people and companies buying real estate in the United States.
The visit to Virginia is aimed at demonstrating the Biden administration’s intention to increase corporate transparency and prevent abuse by shell companies.
“A lack of transparency around the world, especially in opaque corporate structures, makes it easier to hide illegal activity,” Yellen said in prepared remarks ahead of her visit to FinCEN headquarters. “Information regarding beneficial ownership will assist our law enforcement colleagues.” Arrest, prosecute criminals, and seize ill-gotten assets. ”
The bipartisan Corporate Transparency Act of 2021 was signed into law, giving the Treasury Department the authority to create new rules regarding beneficial ownership. And starting Jan. 1, most U.S. companies will be required to report certain information about who directly or indirectly owns or controls them.
The rule requires most U.S. businesses with fewer than 20 employees (approximately 32.6 million companies) to register with the government.
In November 2022, the National Small Business Association sued the Treasury Department over the database, saying new reporting rules unfairly burden small businesses, violate privacy and free speech protections, and undermine states’ authority to govern businesses. The lawsuit alleges that it violates the U.S. Constitution. .
The judge is expected to rule on the matter soon.
In addition to the business database, Yellen said the Treasury Department is considering additional measures to address risks associated with commercial real estate.
Real estate is a common vehicle for money laundering. Yellen said in March 2023 that illegal actors laundered at least $2.3 billion through U.S. real estate between 2015 and 2020.
A 2022 Congressional Research Service report suggested that Congress may consider how to balance money laundering risks in the real estate sector with differing views on oversight.
“The benefits of increasing corporate transparency through the collection of beneficiary information simply begin with knowing who owns what and protecting national security,” Yellen said. “Corporate transparency also has economic benefits, including protecting the financial system, reducing due diligence costs, ensuring fair business competition, and increasing tax revenues.”
According to FinCEN’s website, FinCEN’s mission is to protect the financial system from criminal abuse, money laundering, and other illegal activities.
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