Landmark transparency act passed to thwart creation of shell companies

Society of Corporate Compliance and Ethics (SCCE)
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Society of Corporate Compliance and Ethics (SCCE)

CEP Magazine (March 2021)

On January 1, the United States Congress passed the Corporate Transparency Act (CTA) as part of the National Defense Authorization Act for Fiscal Year 2021. According to Transparency International, the act “requires businesses to provide ‘beneficial ownership’ information to the U.S. Department of [the] Treasury’s Financial Crimes Enforcement Network.”[1] The CTA came about after a decade-long campaign by transparency advocates to make the formation of anonymous shell companies much harder to accomplish in the US—an effort that is part of the larger fight against money laundering.[2]

The director of Transparency International’s US office said of the CTA:[3]

Ending the abuse of anonymous shell companies is a tremendous victory for all who are concerned about the harmful impacts of corruption. It’s a huge step forward in fighting illicit finance at home and around the globe. Simply put, corporate transparency means it will be harder for corrupt leaders and other criminals to hide and move stolen money through secretly-owned corporations.

1 “Historic Anti-Corruption Measures Become Law,” Transparency International, news release, January 1, 2021, http://bit.ly/3s2nSFD.
2 “Landmark Bill Ending Anonymous U.S. Companies Is Enacted,” FACT Coalition, news release, January 1, 2021, http://bit.ly/3nsB5UH.
3 “Historic Anti-Corruption Measures Become Law,” Transparency International.

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