A corporate
transparency bill introduced in the U.S. Congress last week will force
disclosure of Nigerians and other nationals who run shell companies registered
in the
United States.
The
bipartisan bill, ‘Corporate Transparency Act of 2017’, introduced by
Congresswoman Carolyn Maloney, a Democrat, and co-sponsored by Congressman
Peter King, a Republican, will compel disclosure of beneficial owners “to
prevent wrongdoers from exploiting United States corporations and limited
liability companies for criminal gain”.
Both
legislators represent New York, a city that has been cited in several
investigative reports as one of the prime destinations for illicit financial
flow from Nigeria.
The bill
enjoys the support of members of the Financial Services Committee of the U.S.
Congress, law enforcement agencies, 44 anti-corruption advocacy groups, and 27
investors whose combined asset are in excess of $855 billion.
Nearly two
million companies are registered in the United States every year. The bill will
amend current incorporation law which often demand only basic information from
proprietors and typically does not ask for the names of beneficial owners.
Accoding to saharareporters, in her
introduction, Congresswoman Maloney said “criminals have exploited the
weaknesses in state formation procedures to conceal their identities when
forming corporations or limited liability companies in the United States.”
“They then
use the newly created entities to commit crimes affecting interstate and
international commerce such as terrorism, drug trafficking, money laundering,
tax evasion, securities fraud, financial fraud and acts of foreign corruption,”
she added.
Congresswoman
Maloney’s speech to U.S. Congress on June 28 coincides with recent uptick in
Nigeria’s campaign for transparency in the financial sector. Speaking in Abuja
on June 5 at the Conference on Promoting International Co-operation in
Combating Illicit Financial Flows, Acting President Yemi Osinbajo observed that
the Thabo Mbeki-led High Level Panel on Illicit Financial Flows from Africa
singled out Nigeria as source of most of the illicit fund flow out of Africa.
“The Thabo
Mbeki report shows that most of the illicit funds flow that comes out of Africa
are from Nigeria and that shows us very clearly especially the security
agencies that we simply have to do more. It is evident that so much money is
leaving our shores.
“There is no
way the transfer of this assets can happen without a handshake between the
countries that they are transferred and the international banking institutions
in the countries in which they are transferred, there is no way it will happen
without some form of connivance,” Mr. Osinbajo said.
While the
acting president called for criminalising financial institutions, Akere Muna of
the International Anti-Corruption Conference Council, who also chaired the
conference, drew attention to Mbeki report’s emphasis on the need for
transparency in all segments of financial transaction as the key to combating
all “aspects of illicit financial flows.”
“New and
innovative means of generating illicit financial flows are emerging; more
effort is needed in asset recovery and repatriation; Weak national and regional
capacities impede efforts to curb illicit financial flows; Financial secrecy
jurisdictions must come under closer scrutiny,” he said.
Speaking at
the conference, Nigeria’s Finance Minister, Kemi Adeosun, stressed the
long-term commitment needed to combat cross-border illicit financial
transactions.
“We’re still
collaborating with other nations of the world to repatriate funds stolen from
Nigeria 20 years ago”, she said.
Ms. Maloney
similarly called for international collaboration on corporate transparency.
“Anonymous shell companies have become the preferred vehicle for money
launderers, criminal organisations, and terrorist groups because they can’t be
traced back to their true owners” she said, adding that “the U.S. is one of the
easiest places in the world to set up an anonymous shell companies.”
“Frankly,
it’s an embarrassment. We need to fix this gaping hole in our national security
and listen to law enforcement who is requesting these changes.”
Ms. Maloney
who was joined by Stefanie Ostfeld, Deputy Head of Global Witness’ U.S. office;
Greg Baer, President of The Clearing House Association; and Rick Fulginiti,
retired Price George’s County detective and Chairman of the Fraternal Order of
Police’s National Legislative Committee, among others however, assured that
once the Corporate Responsibility Law takes effect, criminal organisations that
are infamous for using anonymous shell companies, both foreign and domestic, to
open bank accounts, launder money and will no longer be able to escape
oversight and thwart law enforcement.
The
Corporate Transparency Bill 2017 will empower United States Treasury Department
to issue regulations requiring corporations and limited liability companies to
file information about their beneficial owners.
The bill
also stipulates that Treasury Department will collect beneficial ownership
information for corporations registered in states that choose not ask for such
information.
The bill
when it becomes law would also establish minimum beneficial ownership
disclosure requirements, the beneficial owners’ name, current address, and
details of their non-expired passport or state-issued driver’s license must be
recorded at the time of registration. False, fraudulent or incomplete
beneficial ownership information will attract civil penalties.
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