US Treasury proposes new disclosures to fight corruption

The US Treasury Department proposed a new rule Tuesday, as part of its efforts to combat corruption and terrorism, that requires companies to identify who owns and controls them, rather than the names of the people who formed the company.Shell companies have been used to mask peoples identities in ways that can enable illegal activities, causing the federal government to seek greater transparency as part of last years Anti-Money Laundering Act. The Treasury Department estimates that the average costs of compliance will be roughly USD 50 for companies.

The US Treasury Department proposed a new rule Tuesday, as part of its efforts to combat corruption and terrorism, that requires companies to identify who owns and controls them, rather than the names of the people who formed the company.

Shell companies have been used to mask people's identities in ways that can enable illegal activities, causing the federal government to seek greater transparency as part of last year's Anti-Money Laundering Act. The Treasury Department estimates that the average costs of compliance will be roughly USD 50 for companies. The proposal will "help close the loopholes that undermine U.S. national security, bolster economic fairness, and protect the integrity of our financial system," Treasury Secretary Janet Yellen said in a statement. Companies would be required under the proposal to disclose any "beneficial" owners. These people either exercise "substantial control" over the company or own in some form at least 25 per cent of the company, according to a Treasury Department summary. Some trusts would be excluded from having to submit their ownership structures because their creation did not require them to file with state government officials.

There will be a 60-day comment period on the proposed rule.

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