US passes anti-corruption law that effectively bans anonymous shell companies
independent.co.uk
independent.co.uk
So it seems that the cost of money laundering has gone from a few thousands dollars for a Delaware C-Corp to running a fake business that employs 20 people and has an office. The minimum to launder under this scheme is $5m per year.
This seems like the government stumping on small money launderers while giving the big guys a tax: employ some people, and rent some real-estate.
There’s nothing about not being allowed to have an anonymous shell company that inflates the costs of legitimate business...
These are the most dangerous words ever. Especially that this requirement is probably ineffective. It is a small paperwork, yes, but it is there. A couple years later, it is reviewed and judged to be ineffective and new requirements are added to this paperwork.
Then we end up with hundreds of paperwork to fill and submit just to be able to run a business.
It's inherently obvious you didn't read the article at all. None of what you state is true. Just do yourself a favor and read the article.
I can state that in practice, in attempting to social engineer my own legally protected information from banks and local government I have had nearly 100% success rate in obtaining it. The only solution is to not give them access to the data in the first place.
If this information is available 'only to law enforcement' as some have suggested here, that often means that essentially any law enforcement anywhere in the country for any reason. If you don't know someone who can look up tags for you, or addresses off drivers licenses ... you need to get out more. That level of protection is better than nothing, but it isn't particularly protected.
?! That’s an interesting perspective, especially on a software development forum :)
Have you ever had any look at how laws actually get passed in the US and pretty much any country with some sort of democratically legitimized government?
Your demand in any of these systems would simply lead to no laws getting passed at all, most of the time, total legislative gridlock. Legislature is an incremental process by nature, and especially so in systems of government where the interests of more than one side are represented, so compromises have to be made at every step of the way.
Though, given people didn't pick up on the sarcasm, at the very least I'm glad it's at least being downvoted instead of upvoted!
It is a little different. Using your numbers, previously $5 million got a big player ~1,000 shell companies, now it gets them 1. The law would make a legal manoeuvrer several orders of magnitude more costly. That is more powerful than a $5 million per business tax.
After this, he has only one choice: Run the fake business.
I did work on this bill (my Congresswoman is its author). Let me defend the thresholds.
The point of this bill is to require beneficial ownership disclosure for shell companies. Legal ownership of an entity is one thing. The beneficial owner is the human who ultimately owns and controls the entity [1].
Tracing the beneficial owners of economically-active entities (i.e. not shell companies [2]) is expensive. Imagine doing this for Apple. You would need to look through every ETF that holds it to its mutual fund owners to their pension fund owners to their holding companies to their pensioners. That is a multimillion dollar exercise, largely useless and reasonably opposed. This expense in its extreme stopped similar legislation in the past. As a result, someone from Russia could create a BVI company that opens a Delaware LLC and gain near-total transactional anonymity.
This bill tries to exempt economically active entities. The thresholds are easy to identify, reducing paperwork, while low with respect to most companies. (Small businesses have simple ownership structures and a small number of beneficial owners.) The bill is not a general anti-money laundering bill. If you have employees and revenues, you are engaging in sophisticated money laundering. If you have a thousand shell entities, you are doing something else (and more common).
A company with 5 emplyees is not active?
You are penalized if you are small, complicated, and anonymous. You aren't penalized _just_ for being small, or complicated, or anonymous.
As someone who went through the BO pain, I think it only added more paperwork load to small business/guys like me.
Note that American compliance is de-centralised. A $5+ million entity attracts a different level of scrutiny from banks, corporate registers and brokers than a no-revenue entity with an overseas signatory.
[1] https://knowledgehub.transparency.org/assets/uploads/helpdes...
[2] https://open.cmi.no/cmi-xmlui/bitstream/handle/11250/2475354...
The more offenses someone commits, the more likely they'll make a mistake committing one of them and get caught. Yeah most money launderers will have no moral qualms about lying on a form, but someone already on the fence might be dissuaded if the risk of getting convicted increases.
Or even if consciously criminal then one would want to minimize risk of getting discovered.
Also, finding an attorney that is willing to lie, is very easy. How do you think all this stuff is already happening illegally now? ;)
If the criminals risk forfeiting their money they may look to other avenues instead of using American shell companies.
I very much doubt anyone is under the illusion that this will stop criminals trying to launder money through American companies, it just makes it easier to seize assets of potential laundering operations and to investigate sources.
And how this is done - check the provided information against a known-good database (there are plenty of services that you can pay for here). Perform random spot checks. Make sure that the UBO is filing taxes for this entity’s earnings. Etc.
I’m not claiming it’s perfect; fraud detection is a hard problem, and it’s also pretty obscure if you haven’t had to deal with it at your own company.
Someone has to file the paperwork. If you willingly misfile it, then you are an accomplice. The various offices that manage these papers also try to do minimal checks. Also if the filer is a professional agent/attorney they have strict requirements to keep various details about their clients. (Which are protected by attorney-client privilege, but if there's sufficient evidence then a judge can issue a warrant, so the investigation can try to follow the trail. So either the attorney was duped or it was complicit.)
This is already happening and had been for years.
Source; I know people who laundered money for years in the Caribbean. One of the Patsy's is paying a lot of tax debt for the shell that was in his name.
If the beneficial owner is falsified, then if that property comes under investigation, they stand to lose it. There are currently multiple $50m+ homes in places like BelAir or Beverly Hills that are owned by anonymous shell companies and they sit vacant year round. Some, after much investigation were found to be owned by foreign politicians. I suspect a large percentage of these properties are also from ill gotten gains.
If the source of the funds was unlawful, they'd lose it anyways.
Edit: the Washington Post article on this says “ The general public won’t have access to the ownership data, a disappointment to anti-corruption campaigners, who say public scrutiny would help combat criminal activity.”
https://www.washingtonpost.com/us-policy/2020/12/11/anonymou...
The is the problem with "anti-corruption" efforts, is that always hurts people that have legitimate reasons or simply desire to live anonymous lives
My parents and grandparents told me about the days before centralized documentation. A birth certificate was sufficient documentation, and of course those could be changed. One could lie about his birthday and not get caught. These days, no one is a person at all unless the government says he is, and even then, he is only the person the government says he is: I knew someone who was a transgender; she couldn't call herself a woman in many contexts until the government said so. This idea of constantly proving that you are who you claim to be, backed by government verification, strikes me as a bad direction to go.
This was not a tool "only for the wealthy" and since the limits of the law are fairly low before the law no longer applies it is clear this law IS NOT targeting "the wealthy"
Presumably this law still will be easily avoided by the sufficiently wealthy-- some kind of finance structure involving loans and whatever where a nominee is the legal beneficial owner. ... and outright criminals will just break it, because its not like violations of it will be detected quickly and if they are detected the criminals will already have worse problems.
Or just purchase a 'real' business that engages in some unrelated activity to own the property... Which is something just about every money launderer already does! It just has to be over the size threshold in this bill, essentially leaving this avenue open only to the wealthy.
Modern US Society is losing alot of things that used to be a foundation. Privacy is one of them.
In general people today agree with the "if you have nothing to hide you have nothing to fear" rhetoric, generally accepting that "only bad people" want or desire privacy, and the government is only their to "protect good people from bad people"
It is all a lie ofcourse but that is where we are as a society, and I am not seeing anything on the horizon to change this
Largely we (the US) are moving to a more Authoritarian, collectivist society, leaving behind our Individualist libertarian roots
I don't see anything in the bill language that restricts the disclosure, much less makes an unauthorized disclosure a crime.
The purpose of money laundering is to prevent government from getting too curious about where that money is coming from.
Complexity comes into play on the cost calculation. Wealthy people with complicated structures doing little revenue with few or no employees may find this law onerous. Most people, including the wealthy, will be done listing themselves, their spouse and a few outside investors.
If you are wrong and later discover unexpected side-effects, what is the mechanism and cost of fixing or removing this regulation?
https://www.gov.uk/guidance/people-with-significant-control-...
I am a director of a small and mostly inactive company. We had to fill in a form when these rules came in. We have to fill in a form when we change directors or shareholders, which happens every few years. We have to fill in an annual confirmation that the information is up to date. All of this takes a matter of minutes. The cost is negligible.
It is not. It adds stress. When this was added (where I operate), I had to call in an accountant to do the paperwork because the penalty is prison time, and not a fine. This additional stress and paperwork just keeps compounding (there is a new paperwork every one or two years now). Then you have the small fee for that particular paperwork (should have been free?) and the accountant fee. It just keeps adding up, and for a single or very small business it's becoming unsustainable.
Penalty for what? There is usually a pretty large distinction between misfiling as part of a crime, and misfiling as mere clerical error.
I don’t know where you operate.
Perhaps it’s so corrupt that officials will use any excuse to jail people who don’t pay them, but if this is the kind of locale in which you operate, a regulation like this would seem to be the least of your worries.
If doing something could allow the prosecutor to plausibly charge you with this, even if you wouldn't be convicted, you now have to be counseled in doing it to avoid that possibility, otherwise you could be coerced into pleading guilty to something you didn't do because the alternative is prohibitively expensive legal defense from a questionable charge with a low risk of a high penalty.
Businesses are risk averse with things like this, so now, because of the possible implications, they'll hire a lawyer/accountant to deal with it, increasing compliance costs on many innocent people.
In the UK, they don't, because we don't have plea bargains.
Various UK sources seem to think you do, and cite specific government guidelines for the practice, e.g.:
https://www.inbrief.co.uk/court-proceedings/plea-bargaining/
My point is that if this is all they have then they don’t have a case, so legitimate businesses don’t need to stress about about clerical errors landing them in jail.
There is no if. Everybody is committing a crime all the time. There are laws that prohibit doing things that other laws mandate. There are more pages of laws on the books than anyone could read in a lifetime, so there is no feasible way to know that a given action isn't illegal.
Businesses are engaged in risk management. They try to avoid knowingly breaking the law. Making that process consume more resources, increases compliance costs.
It will also needlessly lead to the disclosure of personal information from people doing nothing wrong, simply because using tax disregarded LLCs has become a widespread practice to patch around just about everything else constantly demanding your personal info and leaking it everywhere.
By demanding the submission of this information, having harsh penalties for avoiding it, and providing apparently zero protection or consequences for disclosing it... that outcome is essentially guaranteed.
Is it? Can you give some examples of how this is used?
I have never seen any reporting on this practice. What makes you think it is widespread?
> the penalty is prison time, and not a fine
You aren't going to prison for an honest mistake. mens rea, innit.
As some solicitors say [1]:
> It is a criminal offence not to:
> * Take reasonable steps to find out if there is anyone who is a PSC and identify them to Companies House
> * Give notice to the registrar of companies of an entry alteration or note in a company’s PSC register within 14 days of any change being made
> The sanctions for such offences are a fine or possible imprisonment.
> In the event that you do not comply with your PSC requirements Companies House will contact your business and give you an opportunity to rectify the position, before proceeding to enforcement action.
https://www.gl.law/insight/news/criminal-effects-psc-regulat...
If there is no crime to point to beyond misfiling, there will be no case for willful intent.
Legitimate businesses don’t have to stress about a clerical error landing them in jail.
>If you have employees and revenues, you are engaging in sophisticated money laundering. If you have a thousand shell entities, you are doing something else (and more common).
Isn't it easier (and more effective to the goal) to query the attorney of record, Articles of Organization filer, registered agent (etc from the Secretary of State), and have a more stringent eye on what they do, rather than taking personal identities to the Treasury?
The fault is not the individual, it's the supporting system that allows for thousands of anonymous LLCs to be coordinated - that only can happen through a support structure - that should be easy to identify through the current data.
Edit: also, yes, as another comment mentioned, thank you for chiming in. Very rarely do people get to speak to decision makers and advisors in these positions - this is real democracy at work.
So, this legislation feels like a break from that consciousness.
Instead of playing cat and mouse with these entities - which the above quote illustrates as the American legislative way - we are going for the jugular of this issue.
Formation documents and registered agents track legal ownership. An attorney may have a line to the beneficial owner. Or it may be to another attorney. Either way, that is protected by attorney-client privilege.
There is nobody logging beneficial ownership. The closest are banks, which started requiring beneficial ownership information only last year. Unbanked entities are dark.
Put another way, this bill is putting that “more stringent eye” on the system.
Also, attaching a bunch of non related stuff to huge bills like defense appropriation is really an annoying to me, but I guess that is how the sausage gets made.
An inspiration for this bill was mitigating circumvention of the Magnitsky Act. Americans using shell companies may evade taxes. Foreign entities using shell companies may evade our counterintelligence.
Americans use incorporated entities to buy assets to limit their personal or corporate liability in operating businesses. This requires all of those to be queried for beneficial ownership - for what reason?
Anonymous Shell corporations is being used synonymously with legitimate holding companies because it markets the cause well - greater tracking on who owns what.
This is transparently the intent of the bill.
Btw - fun ‘spar.’ I respect your thinking, just disagree slightly
This is a general problem with the tax code. Fix what Apple does, which needs to be done anyway, and you don't have this problem.
> Foreign entities using shell companies may evade our counterintelligence.
Isn't a foreign counterintelligence service just going to list a straw man as the beneficial owner?
There are groups of people who have legitimate safety concerns (victims of domestic violence and stalking, members of law enforcement, victims of abuse from law enforcement, public figures potentially subject to political violence such as the people certifying voting in this recent election, high net worth individuals, corporate officers of companies some people have beef with, activists, LGBT in very religious areas, reporters, whistle blowers, etc) who are using these tools as part of a DIY witness protection program to safeguard themselves against violence and intimidation. This is undermined if people can trivially unmask the beneficiaries of companies used to obfuscate purchases of assets such as a house or car. I agree that this data should be available to law enforcement during an investigation (ie with a subpoena), but allowing bank employees or any member of law enforcement to trivially access it whenever they want opens up the door to abuses and leaks (selling access or granting access to friends, contacts, or others intent on doing the owners harm). It also assumes blanket trust in those with privileged access and there have been many instances in the past of this trust being abused. It should require more than knowing or being a cop or a bank employee with access to be able to DOX or come after someone who is not breaking the law but wants to remain private.
If you need a a commercial company to make money before handing it over, here in the UK it is common to set that up as a subsidiary of the non-profit. Charities do it all the time, a subsidiary company runs the charity shops, and gives the profit to the parent charity. This allows the shops to be run more like a commercial operation, with fewer constraints than a charity is required to follow, then when the money is handed up to the charity those constraints apply to how it is spent or distributed to other charities.
So, sophisticated money laundering is explicitly legally allowed?
What benefit does anonymity provide ? Its not like your phone/address has to be made public. Just a name/id. This transparent system is working here without any issues, why cant it work with you guys?
And btw, this will make no difference for most foreigners doing evil things (the ever-present "Russian"). Russia doesn't participate in information-sharing, money laundering today is largely a problem of govts choosing not to participate in information-sharing (and I think the implication is that this is anti-corruption, this globalist approach to corruption does nothing, it will help no-one).
I feel like this bill doesn't actually change anything. Look at your example: "Someone from Russia could create a BVI company that opens a Delaware LLC and gain near-total transactional anonymity."
Your bill exempts every nominee or person paid to form the business. That is completely common practice, and also benefits the exact people you made this bill for?
Let me be absolutely clear, when I think about MY user experience, nothing has changed? If my registered agent formed the business with one of their employees names, or if my lawyer did that, in both circumstances there would never be a report to the Treasury for them, and there would never be a report for me.
I don't actually want a burdensome regulation, but I also don't feel Congress actually cares about this since this was just a rider into an actually politically charged bill, so I don't mind talking to you about it:
How does this bill accomplish anything if it exempts everything that real people actually do, let alone anyone trying to mask ownership and control.
Yes, we already know who the legal owners of entities are.
Under this bill, if you pay a registered agent to form an LLC you control, your name is recorded. That is not presently done. It’s been pushed back on, particularly by the real estate industry, for decades.
Okay I misread that in the law review documents. So anyone acting on behalf of the beneficial owner is not reported, but the beneficial owner still is.
This is in line with some other countries that are vying for respect by reforming.
I don't mind it being on-file privately with the government, and this bill doesn't change anything with publicly perusable databases, nor create a new one.
Correct. I have seen arguments for such databases, and might support it in limited cases (e.g. for public officials). But I think, personally, beneficial ownership information should be afforded privacy similar to tax returns.
Let's say if I walked to the secretary of state in Wyoming and paid them cash to form a new entity, where is the Treasury report supposed to be done? Is there a notification somewhere?
Does the Federal Government even have a way of knowing when a new entity is created in all of the incorporated states and other semi-autonomous regions? Not all the states have free public databases.
Is this bill going to sanction the states until they give information automatically about newly formed and existing entities?
Does this apply to indigenous protectorates? Navajo nation has incorporation statutes, and literally any of other the 560+ tribes could as well.
Out of curiosity, could you explain why? What would be the risks if this information were publicly available?
It's the same reason why i would want my medical data to be private, but available to relevant gov't agencies for public health reasons.
I agree. Not only similar, but exactly the same.
Only I'm Swedish.
Company -> hires lawyer to register Company2 -> Company2 -> hires lawyer to register Company3 -> etc.
Beneficial ownership is an old legal concept. It traces through entities to natural persons. Until one gets to the controlling humans, the search keeps running. It is a powerful and costly tool.
So short answer: no, daisy chaining lawyers and entities wouldn’t hide you.
I'm reminded of the Patriot Act, and the ways the data collected were used (beneficially), and abused (for personal reasons) by people trusted with high-level clearance. How is access being limited and audited to the data collected by this new bill?
I feel the same way about the government grant system relying on the DUNS system (run by a private company) for business registration. I also feel this way about credit agencies like Experian and Equifax being the trusted source of truth on creditworthiness for Fannie Mae loans, and collecting records on essentially all Americans (no consumer choice and limited opt-out) which inevitably gets leaked. The liability of Experian and Equifax should have been their entire businesses, not a few slaps on the wrist and the offer of credit monitoring for just a year.
With all that in mind, I want to know--when this bill is implemented, how is this not inevitably going to result in abuses or harmful massive leaks? Or do you just assume that entities below a certain threshold of activity don't deserve privacy or some level of property obscurity to help people avoid criminal attention?
The kind of info this bill is collecting could be easily be used by identity thieves. Sharing this info with foreign entities makes the problem worse.
Civil forfeiture started off with good intentions, but in many places has a serious lack of recourse and oversight. There have been some reports that it's abused as a quick way for police departments to pad their budgets. Those doing the seizing don't even need to prove guilt of a person, since civil forfeiture is a dispute between police and property, not police and a suspected person. Sure, these policies let police cripple the more clever criminals that they had trouble bringing to justice, but it also gets used all the time in ways against people (I guess against property) that would reasonably argue innocence.
There probably will be abuses and leaks—-I don’t think anyone should trust the government with population-wide data that is catastrophic if compromised. But on the ladder of OPM data and IRS tax records to e.g. potato registries, beneficial ownership data isn’t that sensitive. Many countries make it a matter of public record with few ill effects. (Counterpoint: Sweden makes tax records public record. The IRS being compromised would be a big deal.)
The church, charity and non-profit exemption is the hole of the bulldozer path that had to be left to protect private civic discourse. This will be abused by the wealthy and powerful. But as a result, there will be no comprehensive database of e.g. donors to prison reform or LGBT causes.
It would be a big deal only because it would shatter current expectations. As you've mentioned, society would operate just fine if everyone's tax records were public. The aversion that people feel towards it is largely cultural - if they were brought up in a different western society, they wouldn't feel that way.
What does that even mean?
Thank you for making my point.
https://www.gov.uk/guidance/the-seed-potato-classification-s...
Why should it be? There's no sensible reason why ownership of a company should have to be kept secret, AFAICS. If your company does shit so shady you're ashamed to stand up and admit to it, that shit is probably so shady it already is — or should be — illegal anyway.
Further, in what manner is 'jancsika' authenticated, to anyone, and why do you consider that negative ?
It doesn't matter if the information isn't supposed to be made public, if you hand it over it's easily social engineered out, and if you hand it over it gets sold to data brokers. The only way to be secure is to not actually share the data, and this law-- a rider which bypassed democratic review by being tacked onto a budget bill-- makes doing so a crime.
:(
I think that no law should be passed that requires the collection of personal information without including penalties for abuse of the information at least as severe as the penalties for not providing the information.
Renters have no such disclosure of where they live.
This law could have at least made unauthorized disclosure of the information collected a felony as is the case for tax returns, but it does not.
:-/
In practice it's just a big f you to anyone who's parents live out of state and die owning their home and didn't have the foresight to put it in trust or sign it over to the kid(s) prior to dying.
There is no justifiable purpose for this tax other than revenue. Property out of state has zero cost to the people of the state. It's a pure money grab and it's only affecting the middle class (because anyone who can justify the cost of estate planning will not be subject to this tax).
Edit: I'd be curious to see why people find this comment so disagreeable? Or is it just ideologically inconvenient to point this stuff out?
Isn’t this the alleged purpose for all taxes?
And to be fair, that last bit is simply the US tax system: If you can lawyers and accountants, you might not pay much tax. Unfortunately, change requires congressional action and folks working together.
The outrage is that it's a trap for the unwary. Billionaires don't pay it but family businesses who didn't realize they had assets in excess of the threshold do, or people who die young before doing the preparation.
If you can avoid it just by hiring an accountant then it shouldn't exist.
Dying is actually subsidized for people with less than that who have unrealized capital gains, unless I understand the system wrong.
There might be some good actors that get caught in this too and have to go out of business. If there is such thing as a good shell company???
You cant catch every drug dealer so you either focus on the big offenders and make them pay or you make drugs legal. I think its better for society if we do the former. Drugs are unhealthy.
From their statement:
"In these divided times, it is encouraging that a broad and politically diverse coalition came together to make these critical reforms a reality. We’d like to especially thank Chairman Crapo (R-ID), Ranking Member Brown (D-OH), Chairwoman Waters (D-CA), Ranking Member McHenry (R-NC), Congresswoman Maloney (D-NY), Congressman King (R-NY), Congressman Luetkemeyer (R-MO), and Congressman Cleaver (D-MO), as well as Senators Warner (D-VA), Cotton (R-AR), Jones (D-AL), Rounds (R-SD), Whitehouse (D-RI), Grassley (R-IA), Wyden (D-OR), and Rubio (R-FL) for their support."
Those seem like extremely non-negligible exemptions. Which is not to say that this law is useless, but it could use more teeth.
You could already sue the anonymous shell company if you wanted to.
It's convenient but it also generates a huge amount of telephone spam and fake invoices fraud attempts. So I could see the argument of keeping that information private.
I still think that it's better to have it public, but it generates some additional problems that needs to be handled.
The law is in practice fairly toothless, Companies House has typically insisted that it simply doesn't have the funding to pursue errors even though it's illegal to make false filings - despite a large volume of obviously bogus information in their system every year.
It did find the money exactly once in recent years, to prosecute one person. That one person was making a point of how toothless it is, by creating bogus data that was embarrassing to named politicians. What an excellent way to make their point for them.
There are actually three levels: A public address available to anybody who knows how to enquire, an address available to a large number of authorised users, including Credit Reference Agencies, numerous government agencies and so on, and finally a home address intended primarily for law enforcement (e.g. if the director is to be arrested it wouldn't do for police to have no idea where they live). You can set them all to be the same, but you don't have to.
The reason for the last extra grade is that in the UK there are businesses which are legal but broadly unpopular. For example, somebody is breeding animals that will be used for medical research. Historically protesters have harassed the directors of firms like that, vandalized their homes and cars, physically attacked them, or threatened their lives. Such directors are entitled to request that their home addresses be suppressed from most uses for this reason.
Edit for clarity: the tenants can't sue, being low income. My original post about suing anonymous shell companies was facetious.
> The information about the true owners would not be publicly available, however. FinCEN could release information only after receiving a proper request from a local, state, tribal or federal law enforcement agency, or a request by a foreign country. That means ownership information would not be publicly available to identify who is actually behind an investment.
https://www.nytimes.com/2019/07/11/business/dealbook/llc-she...
> Tracing the beneficial owners of economically-active entities (i.e. not shell companies [2]) is expensive. Imagine doing this for Apple. You would need to look through every ETF that holds it to its mutual fund owners to their pension fund owners to their holding companies to their pensioners.
The could have done it so any one person can only have "shell" companies up to the point when x million is moved through them in any one given period.
Anyway, the decided this way and so it is.
This law passed because 1. The regulator do not care about small guys; 2. They don't think small guys are moving that much money and are more trouble than profit; and 3. It looks like they are doing something. It also helps employ some people and maintain big cities real-estate by fake restaurants or shops. Ever wondered how some of these joints are able to pay rent and employees with so little customers?
I have always wondered about this. In Manhattan, for example, you fairly frequently hear about restaurants that seem to be popular and busy all the time closing because they couldn't keep up with rent increases. And yet it's also somehow full of corner stores, gift shops, laundromats, pizza places, Chinese restaurants, lunch buffets, etc. etc. that no one ever seems to go into and have 2 stars on Yelp, but are still there year after year.
I figured that in some cases it could be a family that owns the building or a sweetheart lease deal or whatever, but there are just so many that it doesn't seem to add up.
Exempting churches was a terrible, terrible mistake.
especially from a country with clear "separation of church and state" rules, except "in god we trust" on the money.
No surprise they granted the churches the exemption, and stronly agree they should NOT have gotten the exemption given their own well documented corruption.
They don't have any owners, so they can't disclose who their owners are.
https://www.washingtonpost.com/us-policy/2020/12/11/anonymou...
FATCA made it impossible for an American to have a bank-account abroad [1]
PFICs made it impossible for an American to invest in non-US funds [2]
Together with world-wide taxation, punitive departure tax when renouncing the citizenship and huge estate tax when finally passing away, seems to me that Americans are becoming prisoners of their own government.
1. https://www.democratsabroad.org/what_is_fatca_what_are_its_i...
2. https://thunfinancial.com/home/american-expat-financial-advi...
I wonder, is the cost worth it? Was there so much laundering and hiding going on that it was worth losing even more freedoms over it?
As an American that lives abroad, I naturally don't support the extra taxation based on citizenship when I'm already taxed in my country of residence. There is paperwork to file to avoid double taxation, but hiring a lawyer to do it will probably cost me more than it saves at this stage in my life.
https://www.tagesanzeiger.ch/die-angst-der-spitaeler-vor-der...
They also tax their citizens worldwide [1]
[1] https://www.taxesforexpats.com/expat-tax-advice/Citizenship-...
I don't view these tools as being much different from VPNs. There are people that have legitimate uses for VPNs to hide ownership of traffic; there are people that have legitimate uses for shell companies to hide ownership of stuff. There are people that abuse VPNs; there are people that abuse shells. The vast majority of legitimate VPN users would be trivially unmasked by having a subpoena dropped on the provider. The vast majority of legitimate shell company users would be trivially unmasked by having a subpoena dropped on the registered agent. VPN users only become "anonymous" with great opsec and layering. Shell company users only become anonymous with great opsec and layering. The purpose of VPNs is to hide from every day people and to force law enforcement to put in work. The purpose of shell companies is to hide from everyday people and to force law enforcement to put in work. The fact that this community of all communities doesn't see these parallels is honestly fairly surprising to me.
As far as I know there is nothing special in the corporate structure that would make it difficult for law enforcement to find, the point is to stay out of public records.
Whether or not it's effective should be pretty easy to check since this is already legal in some states but not others. Or it should be much easier for abuse victims in the US compared to e.g. Nordic countries where corporate ownership information is fully public. Since I find no evidence of such a difference it would seem this is just the usual case of rich people using actually disadvantaged people as a cover for their bullshit.
(Though I feel like there's maybe a more direct solution to this aspect, maybe something with a nice slogan you can chant at marches...)
https://www.fincen.gov/foia-and-privacy-act-guidance https://www.fincen.gov/foia-exemptions-and-exclusions
Just to confirm - am I reading this correctly in that, this massive corporate secrecy legislation does not apply to the vast majority of publicly traded corporations in the US? If they had just not included those exemptions, this would have been extremely beneficial for everyone right?
Why would we want to allow anonymous corporate shell organizations which are deemed to hide funds if they are tied well known US corporations, as opposed to some shady criminals? Isn’t the crime the same either way?
why would anyone go against 'all publicly traded corporations'? do you believe they are inherently evil, and should be taxed?
this law limits the depth of shell-company layers. it's more costly to add shells with this law.
We need more succinct, germane legislation. It's no surprise that the Read The Bills act never passed. These multi-hundred/thousand page laws are bullshit, and usually filled with pork that has nothing to do with the title of the bill.
Congress shouldn't vote on bills they haven't read, period. If a bill wants to pass, it should stand on its own merits, not sneak in with one that can't fail.
[1] https://www.washingtonpost.com/news/wonk/wp/2016/04/12/how-s...
Anti corruption measures like these are exactly what the US needs.
In many cases, hiding the identity of the actors behind a shell corp was sufficient to hide the crime. e.g. a foreign government could donate to a super pac by way of a shell corp. In order to prosecute such behavior one would need.
1. The list of all donations 2. The ownership information of all donations
I can't exactly send out a mass lawsuit against all donors asking them to prove that they are in fact American.
Considering almost everyone this bill targets is a non-US citizen, this punishment doesn't seem like much of a deterrent. I'm skeptical that we'll see a string of executive extradition cases over this.
It probably does make large scale civil forfeiture easier though.
This law requires providing some accurate information when forming a company in the US. A shell company in any other country would never violate this law.
All these issues are too complicated for >99% of the population to actually understand well enough to say if it's "good" or "bad" _in the final analysis_.
Read the Wikipedia on the organization and tell me if these seem like transparent people.
The US (and indeed UK and EU) has the power to squash tax havens. The big countries are not hostage to the little ones, things are the way they are because of who it benefits.
All three of those are good things, but they also all step on each others toes.
Here's a taste: Back in the 1960s, Swiss banks held money for Nazi war criminals, but they also held money for tax dodgers and for refugees. These groups of people all sought secrecy/privacy/confidentiality (delete as applicable), meaning the evil money washed around with the naughty money, which washed around with the scared money. All three groups of people benefited from those first eurobonds, because they provided an income on money that had previously been static, but not all three were advertised equally prominently.
Swiss banks loved to claim that their bank secrecy had been designed to protect Jewish wealth from Nazi confiscation, and kept quiet about all the dictators whose money they also hoarded, or the tax dodging they facilitated. In effect, the refugees were being used to run interference for the others, and to make the Swiss banks look high-minded, rather than like the criminogenic institutions that they were.
Swiss banks insisted that the reason they didn't want to reveal the details on their clients was because that would endanger the legitimate interests of people seeking protection from rapacious governments.
Ho long before few smarties pool together and form rich enough criminal enterprise that can act on behalf and serve smaller fish for some extra fee. This law is most likely just for show.
That isn't the advantage you think it is. It's like getting all your criminals together to coordinate into a mutually assured destruction pact. Now you can't prosecute even low-level crime because the potential for it to affect the big fish makes it economical for the organization to respond to that with bribery, corruption, murder, infiltration of law enforcement agencies etc.
It's supposed to be divide and conquer, not solidarity and mutual self-interest for all the crime.
Just like Independent did when they wrote “Donald Trump had originally vetoed the $740bn defence bill containing the anti-corruption measures”... but asking for integrity when there is a chance to dig at Trump is just apparently asking too much.
Don’t you find it all so tiring? Don’t you want to be better than what you accuse “the other side” of?
Because otherwise... it’s just projecting a fault where there is no evidence of one as revenge for some hurt feelings you have, after all, any think bad directed at a bad man is a good thing right?
So what if you are making it up, it’s “always ok to punch a Nazi”, right?
It’s perfectly reasonable to speculate on reasons when someone does something weird, and risky (ultimately, he was overridden) for no obvious reason.
Because they refer to buying real estate as a way to avoid this law, so forming a limited liability company wouldn't work.
Suppose jurisdiction X has a tax on real estate transfers and there's a lovely castle there, Castle Y which Person A owns.
Person A transfers the ownership of Castle Y to a holding corporation HoldCorp. There might be a tax for this, but there might well be some exemption, especially if Person A is willing to wait a while before...
Person A wants to sell Person B the castle. Instead they sell HoldCorp. The castle never changed ownership, and no tax is paid.
Later person C wants to buy the castle. They now buy HoldCorp from person B. The castle still didn't change owners and no tax is paid.
If jurisdiction X tweaks their law you might need to tweak your procedure slightly. Maybe Person A must stay as non-beneficial owner for 5 years after the sale, or maybe you must use a two lawyer shell corporation in Bermuda to properly insulate HoldCorp from the taxes. A lawyer will sort this out for far less than the taxes, all of which goes in their pocket and isn't used on government services for ghastly poor people.
Nothing about this act specifies that a judicial order is required for the publication of the information. AFAICT, fincen can just give or sell it to whomever they want, and there is no consequence for unauthorized disclosure.
I agree completely about the inevitable consequences.
People have been way too hyped up by TV shows. In the US there is a lot more activity conducted via companies with obscure ownership for entirely lawful asset protection, personal security, and just basic privacy then there is in money laundering.