[Congressional Record Volume 169, Number 203 (Monday, December 11, 2023)]
[House]
[Pages H6752-H6753]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]
{time} 1445
PROTECT SMALL BUSINESS AND PREVENT ILLICIT FINANCIAL ACTIVITY ACT
Mr. NUNN of Iowa. Mr. Speaker, I move to suspend the rules and pass
the bill (H.R. 5119) to amend title 31, United States Code, to provide
small businesses with additional time to file beneficial ownership
information, and for other purposes, as amended.
The Clerk read the title of the bill.
The text of the bill is as follows:
H.R. 5119
Be it enacted by the Senate and House of Representatives of
the United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ``Protect Small Business and
Prevent Illicit Financial Activity Act''.
SEC. 2. BENEFICIAL OWNERSHIP INFORMATION REPORTING DEADLINES
FOR SMALL BUSINESSES.
Section 5336(b)(1) of title 31, United States Code, is
amended--
(1) in subparagraph (B)--
(A) by inserting ``(but which may not adjust the report
submission deadline)'' after ``Treasury''; and
(B) by striking ``in a timely manner, and'';
(2) in subparagraph (C)--
(A) by inserting ``(but which may not adjust the report
submission deadline)'' after ``Treasury''; and
(B) by striking ``at the time of'' and inserting ``not
later than 90 days after the date of such'';
(3) in subparagraph (D)--
(A) by inserting ``(but which may not adjust the report
submission deadline)'' after ``Treasury''; and
(B) by striking ``in a timely manner, and not later than 1
year'' and inserting ``not later than 90 days''; and
(4) by adding at the end the following:
``(H) Unable to obtain.--FinCEN may not by rule, guidance,
or otherwise, permit a reporting company from submitting a
report relating to the inability of the reporting company to
obtain or identify information in the alternative to
submitting a report required under this subsection.''.
The SPEAKER pro tempore. Pursuant to the rule, the gentleman from
Iowa (Mr. Nunn) and the gentlewoman from Texas (Ms. Garcia) each will
control 20 minutes.
The Chair recognizes the gentleman from Iowa.
General Leave
Mr. NUNN of Iowa. Mr. Speaker, I ask unanimous consent that all
Members may have 5 legislative days in which to revise and extend their
remarks and include extraneous material on this bill.
The SPEAKER pro tempore. Is there objection to the request of the
gentleman from Iowa?
There was no objection.
Mr. NUNN of Iowa. Mr. Speaker, I yield myself such time as I may
consume.
Mr. Speaker, American small businesses are the backbone of our
economy. There are nearly 32.6 million small businesses operating in
our country, and in my home State of Iowa, that makes up more than one-
half of the businesses, those that are on Main Street in our hometown
communities and right in the storefront where Americans shop and spend
their time each week.
However, these small businesses are under attack from a Federal
bureaucracy in D.C. trying to burden them in red tape, and alarmingly,
also from our adversaries overseas, specifically Chinese Communist
Party entities, that have infiltrated our country with shell companies
that jeopardize our national security, violate our intellectual
property laws, and hurt our economy both locally and globally.
Recent reports suggest that the Chinese Communist Party has more than
40,000 shell companies operating in the United States today. They use
these companies to launder money, peddle drugs, and collect sensitive
information on our people and our Nation. We cannot, we must not, and,
today, we will not allow that to happen.
In 2020, Congress passed the Corporate Transparency Act to shut down
these illegal shell companies, but, right now, foreign-owned entities
use these shell companies and exploit a loophole in this law by
checking a box on the required form claiming that they don't know who
owns the company, which, of course, we all know--both Republican and
Democrat--is completely absurd.
Once enacted, our bipartisan Protect Small Business and Prevent
Illicit Financial Activity Act will finally close this loophole and
will also reduce the burdensome red tape for the legitimate American
businesses who are trying to do that which they have done so well for
so long: serve our hometown communities.
First, these shell companies will no longer be able to exploit the
system by
[[Page H6753]]
selecting ``unable to obtain'' or ``unable to identify,'' basically
saying that we don't know who owns us, when reporting their ownership
information. By removing the option to basically claim absentia when it
comes to ownership, we can crack down on the Chinese Communist Party's
economic incursion into the United States.
Not only will this bipartisan bill help crack down on Communist
China, it will also make it much easier for legitimate American small
businesses to comply with the law, no longer putting them at a
detriment to their overseas competitors.
Small businesses already face unique challenges in this economy:
brutal inflation, a struggling supply chain, and a bureaucracy based
right here in D.C. that is intent on burying them in red tape, making
them do far more work than adversary-owned entities or what foreign-
owned companies do right now. Not to mention most operate with limited
resources, and that is on a good day.
This bill will reduce government-imposed burdens by ensuring small
businesses have sufficient time to satisfy requests for information
while the government fixes this egregious loophole.
The bottom line, Mr. Speaker, is that the passage of this legislation
is a critical step forward by preventing our adversaries in the Chinese
Communist Party from exploiting our laws and engaging in illicit
activity and will also reduce the burden of red tape on new and
existing small businesses.
In closing, I thank my colleague from Ohio (Mrs. Beatty), who is the
Ranking Member of National Security, Illicit Finance, and International
Financial Institutions Subcommittee, for helping champion this and
being a co-lead on this important legislation, and I also thank my
colleagues on the other side of the aisle.
Mr. Speaker, I urge my colleagues to support this bill, and I reserve
the balance of my time.
Ms. GARCIA of Texas. Mr. Speaker, I yield myself such time as I may
consume.
Mr. Speaker, I rise in support of H.R. 5119, the Protect Small
Business and Prevent Illicit Financial Activity Act sponsored by the
gentleman from Iowa (Mr. Nunn) along with the gentlewoman from Ohio
(Mrs. Beatty).
In 2021, Congress enacted the Corporate Transparency Act, or CTA,
establishing America's national Beneficial Ownership Registry. This
registry will start collecting information from applicable businesses
and their beneficial owners on January 1, 2024, and will crack down on
the anonymous shell companies used by terrorists, drug cartels, and
other financial criminals.
The collection of information on beneficial owners of certain
corporations, limited liability companies, and other entities
registered in the United States will help protect our financial system
from illicit use by making it even more difficult for bad actors to
disguise their financial activities through entities with complex
ownership structures.
This bill would offer reporting businesses additional time to file
their CTA information, pushing back a handful of deadlines in the
September 2022 final rule on this issue. Additional time, especially
for small, newly formed businesses, would improve the accuracy of the
registry and streamline our law enforcement efforts.
I am pleased to support this bill that will assist with the
development of America's sorely needed Beneficial Ownership Registry.
Mr. Speaker, at least 30 countries already have some kind of central
beneficial ownership registry to improve transparency. It is about time
we start our own program, but we need to do it the right way and give
small businesses ample time to file their information accurately.
In closing, Mr. Speaker, the bill will improve the implementation of
a registry that will provide much-needed transparency into business
ownership and ultimately help to deter bad actors from abusing our
financial system. Providing our Nation's small businesses with
sufficient time to comply with the CTA will help FinCEN to develop an
effective and meaningful registry.
I, again, thank Representative Nunn and Mrs. Beatty for championing
this important issue. I urge my colleagues to support this bill, and I
yield back the balance of my time.
Mr. NUNN of Iowa. Mr. Speaker, I yield myself such time as I may
consume.
First, I want to say thank you to Members on both sides of the aisle.
The House Financial Services Committee has led strongly in making sure
that the backbone of our economy, our small businesses, everyday
Americans, and the economy of this country can remain stronger. With
the passage of this bill we not only fight for the Main Street of
America, but we also ask that those who would do business in the United
States be held to the same standard.
As was highlighted by the gentlewoman from Texas, whether you are a
terrorist entity, whether you are a laundering agency from overseas, or
whether you are the Chinese Communist Party, no longer will you be part
of this myriad of 40,000 entities trying to operate with impunity in
the United States. We will hold you accountable. We will move forward
to support those Americans who are doing it the right way, and, most
importantly, we will stand strong for our national security.
Mr. Speaker, it is a privilege to move this bill on a bipartisan path
with this House and the interests of the American people. I urge my
colleagues to support this legislation which I am proud to lead, and I
yield back the balance of my time.
The SPEAKER pro tempore. The question is on the motion offered by the
gentleman from Iowa (Mr. Nunn) that the House suspend the rules and
pass the bill, H.R. 5119, as amended.
The question was taken.
The SPEAKER pro tempore. In the opinion of the Chair, two-thirds
being in the affirmative, the ayes have it.
Ms. GARCIA of Texas. Mr. Speaker, on that I demand the yeas and nays.
The yeas and nays were ordered.
The SPEAKER pro tempore. Pursuant to clause 8 of rule XX, further
proceedings on this motion will be postponed.
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