US House approves bill exposing shell company owners

WASHINGTON (AFP) – The United States (US) House of Representatives on Tuesday approved a bill that would expose the owners of shell companies to help curb money laundering and other crimes such as bribery.

The bill requires that people “who form corporations or limited liability companies in the United States” report the names of the owners and anyone with a large financial stake in the company “in order to prevent wrongdoers from exploiting (them)… for criminal gain”.

It will also help law enforcement “in detecting, preventing, and punishing terrorism, money laundering, and other misconduct” involving US corporations and limited liability companies, the bill said. The measure was approved in the House by a 249-173 vote and now goes to the Senate, where similar legislation is being considered although its fate is unclear.

Known as the Bipartisan Corporate Transparency Act, it was introduced by Democrats Carolyn Maloney and Tom Malinowski, and Republican Peter King.

“Anonymous shell companies have become the preferred vehicle for money launderers, criminal organisations, and terrorist groups and we’re letting these bad actors get away with criminal actions,” said Maloney when she introduced the measure, stating that the bill “will change that”. King added that the approved bill requires “a company that has the characteristics of a shell corporation to disclose who benefits from the company’s operations and makes that information available only to law enforcement”.

According to United Nations Finance Expert and Head of the Religious Development group Jubilee USA Eric LeCompte, the bill also “stops human traffickers, corrupt government officials and revenue loss in the developing world”.