- The Washington Times - Friday, May 6, 2016

The Obama administration is stepping up efforts to combat money laundering, tax evasion and corruption with proposals that will make it harder for businesses to mask their finances and keep secret the identity of their owners.

The massive leak from a Panama-based law firm shined a spotlight on the prominent use of shell companies by world leaders, government officials and their families in order to hide assets and avoid paying taxes.
Among the changes, a rule finalized Thursday would require financial institutions to verify and keep records on the true identity of company owners that they do business with.

The Treasury and Justice departments also proposed new legislation that officials said would increase transparency and provide law enforcement with better tools to pursue money-laundering and corruption cases.

“Nobody should be able to hide in the shadows from their legal obligations, and nobody should be able to play by a different set of rules,” said Wally Adeyemo, U.S. deputy national security advisor for international economics.

Among the proposals put forth by the Treasury Department, one would require a small class of foreign-owned companies that previously had not had any obligation to report information to the Internal Revenue Service, to obtain employer identification numbers from the IRS.

The Justice Department has also proposed legislation that would allow government lawyers to issue administrative subpoenas in money laundering investigations as a means to speed up investigators access to financial records and enhance their access to foreign bank or foreign business records.

Treasury Secretary Jacob J. Lew, in a letter to House Speaker Paul Ryan, advocated for Congress to quickly pass the legislation in addition to a series of pending tax treaties.

“This legislation would build on Treasury’s action by requiring companies to know and disclose the real person behind a company at the time of its creation,” Mr. Lew wrote. “Criminals are currently able to misuse companies to hide this beneficial owner, significantly weakening our ability to fight financial crime.”

Last month’s publication of the so-called “Panama Papers,” the estimated 11.5 million confidential files from a Panamanian law firm, exposed the offshore and potentially illegal financial dealings of dozens of wealthy, famous and powerful people around the world. The International Consortium of Investigative Journalists, which coordinated the worldwide investigation, plans to release a searchable database of more than 200,000 offshore entities next week.



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