The Treasury Department, on Tuesday, proposed Rules meant to snuff out Money Laundering through the use of Anonymously Owned Businesses.
The Department's Financial Crimes Enforcement Network (FinCEN) issued a Proposed Set of Regulations that would Force the Controlling Owners, of a wide range of Companies, to Register themselves with the Federal Government.
The Rules are meant to Prevent Individuals from using, Shell Companies and other Opaque Corporate Structures, to evade Taxes and International Finance Laws.
"The proposed rule for beneficial ownership reporting is a major step toward addressing the gaps in our corporate transparency framework that allow corruption to flourish and illicit funds to flow into the United States," Treasury Secretary Janet Yellen said in a Tuesday Statement.
"The beneficial ownership rule will help close the loopholes that undermine U.S. national security, bolster economic fairness, and protect the integrity of our financial system."
The Proposed Rules are intended to ensure that the Federal Government can identify Businesses' "Beneficial Owners," Individuals who Control and have Access to a Company's Assets.
Not All U.S. States and Territories require Beneficial Ownership Information when a Business is Registered, which Experts say can help facilitate Money Laundering and other Financial Crimes.
Under the Proposed Rules, certain Domestic and Foreign Companies would be Forced to Disclose any Individual who "exercises substantial control" over the Firm, or Owns, or Controls, at least 25% of the Firm's Ownership Interests.
Beneficial Owners would be Required to Disclose their Name, Date-of-Birth, a Current Address, and a State Identification Number.
Publicly Traded Companies, which are already subject to Securities and Exchange Commission Transparency Rules, are Not Covered by the Regulations.
Businesses based in the U.S. with more than 20 Employees, a Physical Office, and at least $5 million Gross Revenue, are also Exempted from the Regulations, along with a wide range of Limited Partnerships, and Trusts.
The Proposal is Open for Public Comment until Feb. 7th, 2022. FinCEN did Not specify when the Rules would take effect.
The Rules are the Latest step the Treasury Department has taken to Implement the Corporate Transparency Act, which was included in a Major Defense Policy Bill signed by Trump in 2020.
The Proposal also comes One day after President Biden rolled out the Administration's Strategy on Countering Corruption, a Broader Plan to Crack Down on Money Laundering and Illicit Finance.
The 38-page Plan to Crack-Down on Corruption was released ahead of the Virtual Summit for Democracy, which the Biden Administration is Hosting on Thursday and Friday, and will include over 100 Participants from Governments, Civil Society and the Private Sector.
Five Pillars were announced to Guide the Implementation of the Strategy including: Modernizing the Efforts to Fight Corruption by Prioritizing Intelligence Collection, and Analysis, and Boosting Coordination across Industries; Curbing Illicit Finance through Steps like Issuing Beneficial Ownership Transparency Regulations to Identify Bad Actors; and enacting First-of-their-Kind Regulations surrounding Real Estate Transactions to Reveal when Real Estate is used to Hide Ill-Gotten Cash or to Launder Criminal Proceeds.
The Release on the Strategy follows President Biden in June, declaring the Fight against Corruption a Core U.S. National Security Interest, during which he directed his National Security Team to Lead the Creation of a Comprehensive Strategy.
The Administration plans to hold Corrupt Actors accountable by elevating Diplomatic Efforts and Leveraging Foreign Assistance Resources to achieve Anti-Corruption Policy Goals.
It plans to make Anti-Corruption Work a Priority of Diplomatic Efforts and Re-Evaluate Criteria for Government-to-Government Assistance on Corruption.
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