Kenneth Blanco, the head of Treasury’s Financial Crimes Enforcement Network, has said lack of information about who owns and controls businesses incorporated in the U.S. is creating a “dangerous and widening gap” in the country’s national security apparatus in the US.

At a conference on financial crime enforcement hosted by the American Bankers Association and the American Bar Association on Tuesday, Blanco said that “Criminals thrive when they have somewhere to hide, and the secrecy behind shell companies—businesses that exist only on paper—is a clear and present danger.”

Treasury officials, including Mr. Blanco, have previously endorsed the creation of a beneficial ownership registry, which would give law-enforcement officials and banks access to information on who owns companies incorporated in the U.S.

A bill that would create a registry passed in the House of Representatives last October. Similar legislation has also been introduced in the Senate, where Republican Mike Crapo of Idaho, the chairman of the Banking Committee, has indicated he supports more shell-company disclosure. Changes to the U.S.’s anti-money-laundering regime also have received support from the White House, which in October released a statement commending the passage of the House bill.

However, there is some opposition to the legislation mainly from groups representing small business owners arguing that submitting beneficial ownership information will be overly burdensome to small businesses.

James Ballentine, a lobbyist for the American Bankers Association, has said that the goal was not to be a burden on small businesses, but to make it easier for banks to comply with existing anti-money-laundering laws.

 

Date: 12 Dec 2019

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