U.S. Treasury eyes new rule to expand company reporting, weed out corruption

Reuters

Published Dec 07, 2021 12:40PM ET

Updated Dec 07, 2021 02:15PM ET

By Andrea Shalal and Daphne Psaledakis

WASHINGTON (Reuters) - The U.S. Treasury Department's crime fighting arm on Tuesday moved to expand reporting requirements for certain domestic and foreign companies as part of a broader push to crack down on corruption and shell companies.

A new rule would implement reporting provisions under the Anti-Money Laundering Act of 2020, aimed at expanding data on who actually owns or controls a company and closing loopholes in existing U.S. law.

The proposed rule would require affected companies to report their identity to the Financial Crimes Enforcement Network (FinCEN), as well as the name, birth date, address and a unique identifying number for each of its owners.

Treasury Secretary Janet Yellen said the rule marked a "major step toward addressing the gaps in our corporate transparency framework that allow corruption to flourish and illicit funds to flow into the United States.

"The rule will help close the loopholes that undermine U.S. national security, bolster economic fairness and protect the integrity of our financial system," she said.

FinCEN said the proposed rule reflected the Biden administration's push to crack down on shell companies used to launder the proceeds from corruption, drug and arms trafficking or terrorist financing.

U.S. officials will highlight these efforts at a Summit of Democracies that President Joe Biden is hosting this week and work closely with foreign countries to enact tougher rules, a Treasury official said.

The agency on Monday unveiled plans to improve authorities' ability to monitor and stem the growing use of all-cash real estate transactions to launder illicit funds.