It's not like they are rolling back the incredibly expensive and privacy invading "Know-Your-Customer" rules across banking as a whole.
That might be the end goal. And if it is, I narrowly support it. (Yes, KYC makes cartels’ business more complicated. But it’s also a privately-administered tax on commerce and an uncloaking of NGOs and media organisations, the latter being my areas of concern with this administration.)
But it’s incoherent with launching an origin-based tariff war, or purporting to be fighting e.g. cartel finances (or even illegal immigration). If a Chinese entity can sock themselves inside two Nevada corporations and purport to be American, you’re not going to collect your tariffs or enforce purchase restrictions, e.g. on chips. (Particularly for digital goods.)
The beneficial ownership registration was a massive privacy invasion with little hope of providing more than an incidental benefit to the claimed applications. Those cartels would just fail to register ownership or stick patsy proxies in place.
> It's not like they are rolling back the incredibly expensive and privacy invading "Know-Your-Customer" rules across banking as a whole.
One step at a time.
I don’t think I understand your comment.
To use a silly example, we could also cut down on cartel activity (and many other serious crimes) if every internet connected device were required to stream room audio back to the government for keyword matching and surveillance. We don't do this because of principles, because of the risk of enabling other crimes, and because it would be a bad tradeoff-- a lot of invasion when we have less invasive tools available.
I'm arguing the same applies here.
> We don't do this because of principles, because of the risk of enabling other crimes, and because it would be a bad tradeoff
Really the only reason we don't do this is because of the Constitution. The Constitution could prevent us from capturing beneficial ownership data from corporations, but indeed it does not. Of course one can make this argument in front of SCOTUS (and perhaps will some day) but there's a reason you're not making that argument now, which is that it's a bit silly on its face.
Corporations are fundamentally legal objects of the state, which is why they're registered at all. You can operate whatever business you want without incorporating (and without the legal affordances thereof) and then you don't need to disclose any information to anyone.
I'd love to read more on this position.
> Really the only reason we don't do this is because of the Constitution.
While the US is better about privacy than many other places, most of the developed world still manages to not be a surveillance hellscape without strong constitutional protections. Besides, the constitution does very little directly to protect privacy because the framers failed to anticipate technological advancement and the size of the future bureaucratic state... we have what we have largely because of jurisprudence that has read the constitution rather expansively-- which it's done so for the same reason that nations without constitutional civil liberties still largely respect individual privacy: it's a human right which we implicitly recognize.
It actually does, in numerous parts of it (the 9th Amendment comes to mind pretty easily).
This is a bad law, with the usual bad excuse to harm innocent Americans. Point me to all the situations where this would have helped, and now compare that to the amount of time and money spent complying. Then we can have a fair debate.
A corporation is a legal entity granted by a state for the express purpose of generating commerce and benefiting society. The idea that you have a right a corporation and responsibilities for its fiduciary government but not have to report its controlling interests is silly.
And yes, it probably matters. Cartels are buying guns and cars and paying thugs in US dollars that they get out of the US. Even if you force them to use exclusively cash, it becomes a lot harder to move that much cash across the border without detection.
This is an off-piste philosophical take. It overwrites a corporation’s management’s fiduciary duty to its owners with one closer to a charity’s.
I don't deny a corporation's fiduciary duty to its owners. But the state issuing the corporation isn't bound to the same duty when establishing the legal terms of corporations.
The states forming corporations aren’t the ones requiring BOI.
My point is that these definitions and requirements do not come from some sort of divine law. A government can always amend the terms of incorporating and it would still be completely within the function of modern capitalism, just as different governments around the world offer different terms when incorporating.
For tax purposes, yes. For almost everything else, no. State law controls.
Yes, because that's a made up scenario. What are they doing in the forest if they're not doing something to make money? If they aren't doing anything illegal, they're a business, not a cartel.
Ultimately they want money in the same system as everyone else. If you let people set up companies where the owner can't be discovered in some way, businesses set up for laundering money become an expected cost. Shut one down, another pops up. The only way you stop that is to find the people facilitating it.
Having billionaires is bad enough. Anonymous billionaires is a nightmare.
The only reason drug cartels exist is because of the insatiable US demand for drugs.
I would consider myself a proponent of legalized marijuana, but hard drugs are a completely different scenario.
If you end up with addicts either way and taxes only one, that seems to imply an obvious better choice?
If it were possible to calculate, it would be easy to decide which solution is best. My opinion is that things feel like they've gotten worse in Canada as we've softened drug enforcement. It's a feeling, not a fact because I can't factor out all things that cause an increase in drug use, so it's hard to say if we've seen things get worse because of softer policing or in spite of it.
Every single person I know that works in a related field tells me that stuff like safe injection sites and soft on drugs policies have had a negative collateral effect on homelessness, the need for medical services, the need for police, etc.. That makes me hesitant to buy into the idea that making access to drugs easier will improve things.
Yes and no.
Drugs are the market that cartels currently serve, but they also thrive because of weak local governments. Keep in mind the mafia has existed for literally centuries in some places before drugs and alcohol - on nothing more than violence and protection rackets.
We've seen the newer cartels willing to diversify into other criminal activities like taking hostages or even avocado rackets. Legalization may shrink the resources of the cartels, but you would probably see an increase in other unsavory activities that would still create refugees and trade problems for us.
Did that work?
Our entire AML regime has scant evidence of efficacy [1].
Scrapping KYC and AML and creating a public beneficial-owner database (like the SEC’s EDGAR) for entities doing business in America would frankly be more effective.
[1] https://scholarship.law.nd.edu/cgi/viewcontent.cgi?article=1...
Beneficial ownership information is/was a new component of anti-money laundering. The previous AML had scant evidence of working. BOI was never mandated, so of course we have no evidence either way. But my priors are grim given the framework it emerges from, AML, hasn’t been particularly successful.
Combine this with Trump announcing that the US is gonna buy cryptocurrency as part of the US Sovereign Wealth fund and you've got a stew going.