[Congressional Record (Bound Edition), Volume 159 (2013), Part 11]
[Extensions of Remarks]
[Pages 16203-16204]
[From the U.S. Government Publishing Office, www.gpo.gov]




  INTRODUCTION OF THE INCORPORATION TRANSPARENCY AND LAW ENFORCEMENT 
                             ASSISTANT ACT

                                  _____
                                 

                        HON. CAROLYN B. MALONEY

                              of new york

                    in the house of representatives

                      Wednesday, October 23, 2013

  Mrs. CAROLYN B. MALONEY of New York. Mr. Speaker, I rise today to 
introduce the Incorporation Transparency and Law Enforcement Assistance 
Act. The bill would require the states to obtain information about the 
true ownership of the corporation, when incorporation papers are filed 
with the state.
  As some have put it, this bill is a ``no-brainer.'' And it is fairly 
straightforward: it would require that the person creating the 
corporation state the ``beneficial owner'' of the corporation and 
provide sonic form of identification.
  Although this is as straightforward as it sounds, the implications 
for law enforcement are broad reaching. Criminal organizations are 
infamous for using shell corporations, both foreign and domestic to 
open bank accounts, launder money, perpetrate fraud, and finance 
terrorism. And it isn't difficult for them to do. Virtually no states 
require people applying to create corporations to provide the identity 
of the corporate owner. As a result, just about anyone can easily 
manipulate the system to fund criminal activity.
  Here is an example from an investigation in New York by the Manhattan 
District Attorney. The office announced investigations involving the 
movement of funds through banks in New York by entities controlled by 
the Iranian Military. In at least two cases, domestic shell companies 
were opened. in two different states to further secret Iranian 
interests. Through a New York shell company, individuals working on 
behalf of the government of Iran were able to move funds to secret 
accounts held in offshore jurisdictions. Shockingly, the offshore 
government was able to give the Manhattan DA more information about the 
ownership of the New York entity than the state of New York could.
  Although the DA does not contend that requiring a declaration of 
beneficial ownership would have stopped this activity, it would have at 
least been a piece of evidence to go on. And if the declaration of 
beneficial ownership had been required but falsified, it would have 
been an extra tool for law enforcement to shut down the entity and 
prosecute the perpetrators.
  The bill I am introducing today will provide the kind of transparency 
that law enforcement needs to investigate financial crimes. However, it 
is narrowly drafted so that it is not overly burdensome on either 
states or incorporating entities. In fact, most corporations would be 
exempt from the bill's requirements including companies that are 
already regulated by federal banking regulators and companies that are 
over 20 employees and $10 million in revenue.
  This bill is meant to capture beneficial ownership information from 
companies that are able to escape regulation and oversight through 
other federal entities.

[[Page 16204]]

  Senator Levin has already introduced a similar bill in the Senate, 
and President Obama was the lead sponsor when he was a U.S. Senator. 
The G-8 countries recently pledged to implement incorporation 
transparency as well.
  As Global Witness has stated, ``Setting a standard for collecting 
information about the true owner of a company would level the playing 
field between the states while preventing terrorists, drug traffickers 
and kleptocrats from hiding behind corporate secrecy.''
  The bill is supported by both Global Witness and Global Financial 
Integrity, as well as numerous law enforcement associations, including 
the Federal Law Enforcement Officers Association, the Fraternal Order 
of Police, the National Association of Assistant United States 
Attorneys, the National Narcotic Officers' Associations Coalition, the 
United States Marshals Service Association, and the Association of 
Former ATF Agents.
  I urge my colleagues to support this important legislation.

                          ____________________