WASHINGTON—The Financial Accountability and Corporate Transparency (FACT) Coalition has submitted detailed comments in response to the Treasury Department’s call for public input on a draft rule to implement the Corporate Transparency Act (CTA).
The FACT Coalition said it “applauded” the “strong” draft rule that seeks to help reduce money laundering and corruption. The rule, which specifies the types of information corporations and other covered entities must provide to the Treasury Department’s Financial Crimes Enforcement Network (FinCEN), which would reveal their true, beneficial owners, the Coalition stated.
“(Treasury) Secretary (Janet) Yellen warned in December that the U.S. may be the ‘best place to hide and launder ill-gotten gains’, and FinCEN is to be commended helping to tackle this problem by proposing a rule that hews closely to the statutory language of the CTA,” said Ian Gary, executive director of the FACT Coalition, in a statement. “We commend FinCEN for creating a strong rule that will help tackle corruption and money laundering. The CTA had bipartisan support and – if implemented effectively — represents an historic opportunity to curtail the misuse of anonymous entities for illicit purposes by increasing beneficial ownership transparency.”
‘Robust Requirements’
According to the FACT Coalition, the draft rule includes many positive provisions, including strong definitions for “beneficial ownership” and “substantial control,” as well as reasonable, robust, and timely requirements for companies and owners to disclose their information to the beneficial ownership registry to be established by FinCEN.
Under the proposed rule, every company must report at least one beneficial owner, “which reflects the reality that entities must be controlled by individuals. Taken together, these aspects of the proposed rule should reduce gaps in coverage and improve the completeness, accuracy, and usefulness of information collected for use by law enforcement agencies and financial institutions,” the FACT Coalition stated.
Added Gary, “Revelations from the Pandora Papers and other investigative reports have made it clear that this reform is urgent. Given President Biden’s stated priority to tackle global corruption, the U.S. must start by cleaning our own house, and establishing a nationwide standard for beneficial ownership disclosure following years of failing to keep up with international standards is a promising start.”
The FACT Coalition is comprised of more than 100 civil society organizations.
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