DOVER, Del.—In what analysts have described as a rare move to rein in secretive limited liability companies, Delaware's secretary of state has tweaked a policy that would require the state's 1.3 million business entities to be regularly screened against a federal database of terrorists, international drug traffickers and more.
Last month, Delaware State Department leaders said they reviewed the new standards with some of the state's largest registered agents, who serve as administrative liaisons between Delaware companies and the state, reported The News Journal, which learned of the changes following a Freedom of Information Act request.
The revised procedure will require all commercial agents representing more than 50 business entities to conduct quarterly checks, comparing their lists of existing clients against a federal sanctions list updated by the Treasury Department's Office of Foreign Asset Control. If a match is made, the company is prohibited under federal law from doing business in Delaware or in any other state, The News Journal reported.
For smaller registered agents, the Delaware State Department will handle the checks, as it does now for about 45,000 business entities, Kris Knight, Delaware's deputy secretary of state, told The News Journal.
“The move comes at a time when open-government advocates are pushing for legislation that would require both the Department of State and registered agents to verify that prospective businesses meet a half-dozen federal security mandates, including not appearing on the OFAC sanctions list,” The News Journal said.