Even in this new age of terrorism, when one would think that money-laundering and preventing the funding of terrorists would be a national security priority, the United States continues to allow anonymous companies to invest in this country.  According to the U.S. Treasury Department's latest National Money Laundering Risk Assessment, "domestic financial crime, excluding tax evasion, generates approximately $300 billion of proceeds for potential laundering."  The report continues, "Anonymity in transactions and funds transfers is the main risk that facilitates money laundering."  Read the entire report here.  By the way, this is an issue in regard to tax shelters as well!

 

This is absolutely insane.  What in the world is the hold-up here?

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It is imperative that we create public registries of the real owners of companies and/or trusts in order to bring transparency to the complex world of global finance.  Today it is super easy to move and hide money worldwide with little interference.  Shady players can create a web of companies on paper, unconcerned with jurisdictions or country borders.  Of course, not everyone who does this is a criminal, but the current system enables bad actors to run wild and free, undetected, across the global financial system.  You may ask if it really matters if the United States introduces transparency if other countries do not.  The answer is it matters A LOT.  For one, many countries already prohibit anonymous ownership but, even if they didn't, they don't have the breadth and depth that American finance has.  If these guys want to play on a large scale they pretty much have to play with us at some point.

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Adding transparency will work wonders.

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A perfect example is Vladimir Putin.  Putin controls everything in Russia, including governmental institutions, the police, and state companies large and small.  He also controls Russia's money, and steals plenty of it for him and his buddies.  The Panama Papers is one of the biggest leaks and largest collaborative investigations in journalism history.  The Papers are "a massive leak of documents that exposes the offshore holdings of 12 current and former world leaders and reveals how associates of Russian President Vladimir Putin secretly shuffled as much as $2 billion through banks and shadow companies.  The records reveal a pattern of covert maneuvers by banks, companies and people tied to Russian leader Putin.  The records show offshore companies linked to this network moving money in transactions as large as $200 million at a time.  Putin associates disguised payments, backdated documents and gained hidden influence within the country’s media and automotive industries."

 

A report from the National Bureau of Economic Research reveals that "the wealth held offshore by rich Russians is about three times larger than official net foreign reserves, and is comparable in magnitude to total household financial assets held in Russia."  Read the entire report here.  Creating a public registry will go a long way in stopping scoundrels like Putin dead in their tracks.

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One has to look no further than Putin's reaction to the Sergei Magnitsky Rule of Law Accountability Act of 2012 to see that this is true.  He seems rattled, to say the least.  The original Magnitsky Act authorized the U.S. government to sanction Russian human rights offenders by prohibiting them from entering any United States territory and freezing their assets (the Global Magnitsky Act, passed later, extends the sanctions beyond Russia).  This is a great start, but this law can only work if we have the power to identify where those assets are. 

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Evidence:

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United States.  Department of the Treasury.  "National Money Laundering Risk Assessment 2018."

International Consortium of Investigative Journalists.  "The Panama Papers:  Giant Leak Of Offshore Financial Records Exposes Global Array Of Crime And
   Corruption."  

Filip Novokmet, Thomas Piketty and Gabriel Zucman.  "From Soviets to Oligarchs: Inequality and Property in Russia, 1905-2016."  National Bureau of   
   Economic Research.  August 2017

United States.  Congress.  "Sergei Magnitsky Rule of Law Accountability Act of 2012."  H.R.4405.  112th Congress.  14 Dec 2012 

United States.  Congress.  "Global Magnitsky Human Rights Accountability Act."  S.284.  114th Congress.  18 May 2016

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