BREAKING: US Congress set to approve beneficial ownership system – experts say vote will plug ‘one of the biggest holes’ in American AML efforts - AML Intelligence
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BREAKING: US Congress set to approve beneficial ownership system – experts say vote will plug ‘one of the biggest holes’ in American AML efforts

US looks to set up beneficial ownership system

By Dan Byrne for AMLi

THE US LOOKS SET FOR a major overhaul in its money-laundering defences as a thorough system of beneficial ownership registry looks likely to finally be given the green light.  

The legislation could be voted on in Congress as early as this week – a move confirmed by members of both parties in a joint announcement Thursday.

If approved, the US will become the latest worldwide jurisdiction to implement a beneficial ownership registry – a vital ingredient in any nation’s fight against financial crime, according to experts.

Several have described the move as one which will “plug one of the biggest holes in US anti-money laundering rules,” the Wall Street Journal reports.

At the centre of this overhaul is the new requirement that all US companies report the identities of individuals who ultimately benefit financially from their business.

This data will be made available to federal authorities and other law enforcement officials, however it will not be available to the general public.

Although set to be passed with cross-party backing in a heavily polarised US Congress, experts had previously stressed that any current polarisation wouldn’t harm a topic like beneficial ownership.

“Combatting financial crime is generally a bipartisan issue,” said Financial Integrity Network Vice President Tommy Iverson. “Whichever administration is in power, there’s general support across these issues, which I think is great.”

The move is a milestone for US efforts to stem the flow of dirty money through its borders. While beneficial ownership has long been considered vital to track by experts, implementation in the US has been delayed.  

The biggest factors in this delay have largely been opposition from groups such as the US Chamber of Commerce and the American Bar Association, citing privacy concerns.

Recent negotiations with lawmakers have eased these concerns enough for the Chamber of Commerce to officially change their stance and throw their support behind the new legislation.

Nevertheless, the delay has put the country behind some of the world’s other important financial jurisdictions like the UK and EU – allowing American beneficial owners anonymity in their day-to-day business until now.

Various workarounds including shell companies, “agent” owners registering themselves on behalf of the true owners, or multiple layers of the above to create complex networks – can be legally used under existing US law for launderers to hide their activities.

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