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USA: Civil society & business leaders express support for legislation to end use of anonymous companies

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6 May 2019

Civic leaders & CEOs from The B Team urge US Congress to support legislation to curb use of anonymous companies

Author: 12 civic leaders & CEOs from The B Team

"US government action on anonymous companies is crucial in global effort to fight corruption," 30 April 2019

We are writing to express our support for the Corporate Transparency Act of 2019 recently proposed in the 116th Congress... The significant benefits of disclosing [beneficial ownership] information far outweigh any incremental cost... In its current form, the bill provides a much needed basic level of accountability regarding corporate ownership without creating a costly burden on business... Beneficial ownership information will provide greater assurance for companies when entering business relationships, offer a tool for mitigating risk throughout our supply chains and give management and our investors more certainty when addressing risk and allocating capital... The collection of beneficial ownership information in the United States would contribute to ending the anonymous companies that make it so hard to follow the money when it comes to corruption, fraud, and tax evasion.

... We write to urge you to support this legislation to require the collection of beneficial ownership information. As business leaders, we believe that clarity on company ownership is critical. It makes the United States and US firms competitive, helps law enforcement prevent, detect and prosecute financial crime and builds the transparency and trust that benefit both society and business. [Refers to Allianz, Chobani, Danone, Engie, Kering, Natura & Co, Safaricom Plc, Unilever & Virgin Group]

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6 May 2019

Joint letter from 108 groups supporting corporate transparency act of 2019

Author: Global Witness, ICAR & 106 other groups

[T]he undersigned organizations, write to express our strong support for your bipartisan Corporate Transparency Act of 2019 (H.R. 2513), which would require companies to disclose information about the real people who own or control them... at the time they are created. We support increased corporate transparency because it would: (a) curb corruption and fraud, which robs taxpayers of resources designated for infrastructure, healthcare, and other vital needs; (b) fight tax evasion, both domestically and abroad; (c) inhibit wildlife trafficking and other environmental crimes; (d) protect human rights and combat human trafficking; (e) curtail the financing of drug cartels that fuel the opioid epidemic; (f) promote sound corporate governance and financial stability; and (g) help ensure a fair and level playing field for honest businesses.

... Some examples include: Environmental Crimes: Norsudtimber, a European company that is the largest single owner of logging concessions in the Democratic Republic of Congo, is allegedly operating illegally on 90 percent of its sites in the country and used a global web of anonymous shell companies to facilitate the illegal international trade in timber [See reponse from Norsudtimber to these allegations on pages 22-25 in this report.]... A 2014 study...  found that the United States was the easiest place for criminals and kleptocrats to open an anonymous company to launder their proceeds with impunity... Congress should pass legislation, like the Corporate Transparency Act, that requires all companies to disclose their ultimate owners to the government when they incorporate and to keep that information up to date. 

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