The United States is pleased to announce today the publication of our National Action Plan on Preventing the Misuse of Companies and Legal Arrangements. Publication of this plan is a key deliverable of the G-8 summit, along with agreement today on a set of G-8 principles to enhance transparency of company ownership and control. These principals, the G-8 Action Plan Principles to Prevent the Misuse of Companies and Legal Arrangements, by G-8 members are crucial to preventing the misuse of companies by illicit actors.
The U.S. has been working closely with partners around the world to combat the criminal misuse of businesses, shell companies, and front companies. These legal entities are used to access the international financial system and facilitate financial crime, while masking the true identity of illicit actors. These legal entities are also used by individuals and companies to shelter assets and evade taxes. The U.S. National Action Plan demonstrates the U.S. commitment to combating this global problem. It promises to assist law enforcement and tax authorities in understanding who actually owns and controls legal entities (i.e., their beneficial owners) and assist cross-border investigations.
Enabling access to beneficial ownership information to law enforcement and tax authorities is an essential component of U.S. efforts to enhance financial transparency. Other U.S. efforts to enhance financial transparency include global implementation of international standards regarding beneficial ownership through the Financial Action Task Force (FATF). The U.S. played an instrumental role in working to draft the new FATF standards on beneficial ownership and believes the adoption of the principles by the G-8 today is an important step forward. Another U.S. initiative to strengthen financial transparency is a rulemaking proposing to clarify customer due diligence (CDD) requirements for U.S. financial institutions so that institutions collect information on beneficial ownership of legal entity account holders.
Today’s G-8 principles make clear that companies should know who owns and controls them and their beneficial ownership and basic information of the companies should be adequate, accurate, and current. Adoption of these principles is a central deliverable of the UK’s G-8 Presidency, and builds on an Illicit Finance Agenda the UK has recently launched for the G-8. This agenda incorporates three elements: (1) improving transparency of company ownership and control; (2) promoting effective supervision of financial institutions and enforcement of anti-money laundering (AML) obligations; and (3) developing a Sub-Saharan Africa Public-Private Sector Dialogue. The U.S. worked closely with the UK on the agenda and welcomes adoption of the G-8 principles published today, as well as publication by the UK and other countries of their national action plans for preventing the misuse of companies and legal arrangements.
As part of our Action Plan, the U.S. will continue to forcefully advocate for comprehensive legislation to require the disclosure of beneficial ownership information, including a requirement to identify and verify beneficial ownership information at the time a company is formed. We further commit to clarifying and strengthening customer due diligence requirements for U.S. financial institutions, including through publication of a proposed rule for financial institutions to identify the beneficial owners of legal entity customers.
In particular, in our National Action Plan, the United States commits to:
Work to Enhance International Cooperation: The U.S. will continue to advocate for increased mutual legal assistance and other forms of international cooperation designed to enhance the transparency of the international financial system including working with our partners to enhance build a framework for identifying beneficial ownership of companies.