A revamped state-lead proposal to create more transparency in how companies incorporate would leave legal gaps that would allow criminal exploitation, say former law enforcement agents. Members of the Chicago-based Uniform Law Commission (ULC) will meet in Washington from February 6-7 to propose a law for all states that would require corporations to have a contact person charged with providing ownership information to law enforcement agents who have a subpoena. The draft, issued Friday, is the fifth proposal on beneficial ownership by the organization, and "is not radically different" in substance from ULC's 2008 proposal, according to a ULC memo....
The exploitation of shell companies by arms traffickers, terrorist financiers and other criminals represents a serious danger to U.S. national security, a high ranking U.S. Treasury Department official said Thursday.
The United Arab Emirates, a key oil producer situated between Iraq and Iran, has failed to adopt a coherent national strategy against money laundering and terrorist financing, despite the country's rapid influx of foreign capital over the past decade, the IMF said Friday.
The National Association of Secretaries of State issued recommendations in July to create more transparency on the beneficial ownership of companies, including amending uniform business entity laws. The association estimated the changes could take almost two years to complete.
U.S. states have been criticized for not requiring corporations to disclose who their beneficial owners are, an issue Congress is tackling with legislation to make company formation agents comply with anti-money laundering regulations.
The reduce the threat of shell companies, banks must ask questions to understand the nature of any business opening an account and should seek proof that the business produces something, says David Caruso, an AML compliance expert.