05/01/24

US: U.S. Launches a Beneficial Ownership Registry

As published on: occrp.org, Friday 5 January, 2024.

A 2021 law designed to curb illicit financial activities in the United States has come into effect and requires both new and existing companies operating in the country to reveal who owns or ultimately controls them.

The new registry was established by the 2021 Corporate Transparency Act and as of January 1, the U.S. Treasury Department's Financial Crimes Enforcement Network (FinCEN) is accepting reports of beneficial ownership information, as announced by the U.S. Treasury Department.

“The launch of the United States’ beneficial ownership registry marks a historic step forward to protect our economic and national security,” stated Secretary of the Treasury Janet L. Yellen.

“Having a centralized database of beneficial ownership information will eliminate critical vulnerabilities in our financial system and allow us to tackle the scourge of illicit finance enabled by opaque corporate structures.”

U.S. companies created before January 1, 2024, are required to file beneficial ownership information by January 1 of the following year. New companies have 90 calendar days to file the information, right after receiving the notification of the effective creation or registration of the company.

Information for the registry must contain the name, date of birth, address, and an identification document for each beneficial owner. New companies must also provide information on the persons who incorporated the company.

Companies are not required to report beneficial ownership annually. The declarant only has to update or correct the information if needed, as explained by the U.S. Treasury Department.

Beneficial ownership registries are useful for both the state and the general public to detect, prevent, and fight financial crimes. These registries have also proven effective in public procurement, tax justice, and sanction implementation.

Information from the registry also plays a critical role in journalistic investigations around the world, helping to uncover corruption and financial crimes such as money laundering. One example is OCCRP's "OpenLux" project, where beneficial ownership data helped uncover secret companies in Luxembourg that were used by the Italian mafia to hide their money, Serbian politicians doing business with criminals, and children of Russian oligarchs holding real estate.

“With a new focus on information gathering, a central public registry, and the backing of a Biden administration truly committed to cleaning house, consequential change is possible. It's time the U.S. stopped being an attractive home for dubious companies,” stated writer and U.S. businesswoman Ann Marlowe in an opinion piece written for OCCRP in 2021.

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