The bipartisan bill, ‘Corporate
Transparency Act of 2017’, introduced by Congresswoman Carolyn Maloney, a
Democrat, and co-sponsored by Congressman Peter King, a Republican,
will compel disclosure of beneficial owners “to prevent wrongdoers from
exploiting United States corporations and limited liability companies
for criminal gain”.
Both legislators represent New York, a
city that has been cited in several investigative reports as one of the
prime destinations for illicit financial flow from Nigeria.
The bill enjoys the support of members of
the Financial Services Committee of the U.S. Congress, law enforcement
agencies, 44 anti-corruption advocacy groups, and 27 investors whose
combined asset are in excess of $855 billion.
The bill comes as the Federal Government
Wednesday agreed to a Federal High Court ruling to publish names of
treasury looters in the country.
Attorney General of the Federation,
Abubakar Malami, had told State House correspondents shortly after the
ruling that the Federal Government was aware of its responsiblity of
full disclosure but would follow due process.
He said, “I want to place on record that
we hve in place the Freedom of Information Act and governent is fully
aware of its responsibility arising from that legislation. So,
government will, at the appropriate time, make necessary disclosures,
perhaps intermittently, against the background of the prevailing
conditions relating to the tendency of certain suits and associated
things.”
Nearly two million companies are
registered in the United States every year. The bill will amend current
incorporation law which often demand only basic information from
proprietors and typically does not ask for the names of beneficial
owners.
In her introduction, Congresswoman
Maloney said “criminals have exploited the weaknesses in state formation
procedures to conceal their identities when forming corporations or
limited liability companies in the United States.”
“They then use the newly created entities
to commit crimes affecting interstate and international commerce such
as terrorism, drug trafficking, money laundering, tax evasion,
securities fraud, financial fraud and acts of foreign corruption,” she
added.
Congresswoman Maloney’s speech to U.S.
Congress on June 28 coincides with recent uptick in Nigeria’s campaign
for transparency in the financial sector. Speaking in Abuja on June 5 at
the Conference on Promoting International Co-operation in Combating
Illicit Financial Flows, Acting President Yemi Osinbajo, observed that
the Thabo Mbeki-led High Level Panel on Illicit Financial Flows from
Africa singled out Nigeria as source of most of the illicit fund flows
out of Africa.
“The Thabo Mbeki report shows that most
of the illicit funds flow that comes out of Africa are from Nigeria and
that shows us very clearly especially the security agencies that we
simply have to do more. It is evident that so much money is leaving our
shores.
“There is no way the transfer of this
assets can happen without a handshake between the countries that they
are transferred and the international banking institutions in the
countries in which they are transferred, there is no way it will happen
without some form of connivance,” Mr. Osinbajo said.
While the acting president called for
criminalising financial institutions, Akere Muna of the International
Anti-Corruption Conference Council, who also chaired the conference,
drew attention to Mbeki report’s emphasis on the need for transparency
in all segments of financial transaction as the key to combating all
“aspects of illicit financial flows.”
Speaking at the conference, Nigeria’s
Finance Minister, Kemi Adeosun, stressed the long-term commitment needed
to combat cross-border illicit financial transactions.
“We’re still collaborating with other nations of the world to repatriate funds stolen from Nigeria 20 years ago”, she said.
“Anonymous shell companies have become
the preferred vehicle for money launderers, criminal organisations, and
terrorist groups because they can’t be traced back to their true owners”
she said, adding that “the U.S. is one of the easiest places in the
world to set up an anonymous shell companies.”
“Frankly, it’s an embarrassment. We need
to fix this gaping hole in our national security and listen to law
enforcement who is requesting these changes.”
Ms. Maloney who was joined by Stefanie
Ostfeld, Deputy Head of Global Witness’ U.S. office; Greg Baer,
President of The Clearing House Association; and Rick Fulginiti, retired
Price George’s County detective and Chairman of the Fraternal Order of
Police’s National Legislative Committee, among others however, assured
that once the Corporate Responsibility Law takes effect, criminal
organisations that are infamous for using anonymous shell companies,
both foreign and domestic, to open bank accounts, launder money and will
no longer be able to escape oversight and thwart law enforcement.
The Corporate Transparency Bill 2017 will
empower United States Treasury Department to issue regulations
requiring corporations and limited liability companies to file
information about their beneficial owners.
The bill also stipulates that Treasury
Department will collect beneficial ownership information for
corporations registered in states that choose not ask for such
information.
The bill when it becomes law would also
establish minimum beneficial ownership disclosure requirements, the
beneficial owners’ name, current address, and details of their
non-expired passport or state-issued driver’s license must be recorded
at the time of registration. False, fraudulent or incomplete beneficial
ownership information will attract civil penalties.