A new American law requires the owners of shell companies to reveal their identity to the Department of the Treasury, under penalty of a fine of 10,000 dollars and two years in prison. This type of company, widespread in certain American states as well as in tax havens, allows both tax evasion and money laundering. According to the UN, between 800 and 2000 billion dollars are laundered each year in the world. Eagerly awaited by organizations fighting against financial crimes, the measure will make it possible to better fight against corruption.

The front company is to the financial system as the wand is to the magician: a means of diverting attention and hiding the sleight of hand. Basically, to hide a financial transaction and escape the prying eyes of the tax authorities or the police, it is often enough to transfer your money to a shell company, located either in a tax haven or in a territory with low taxation.

Tax evasion and money laundering are therefore greatly facilitated by these companies. The United States, due to the enormous size of its economy, is one of the countries where this practice is most prevalent. The system works all the better if the company is anonymous. Database not made public

This will no longer be the case in the United States where the owners of front companies will have to file their identity with the American Treasury, in other words with the tax authorities. This is a major advance, welcome NGOs like Transparency International. America tends to be favored by criminal groups anxious to launder the profits of their illicit activities. By doing so, Washington is taking a considerable step towards greater moralization of financial flows. Even if NGOs regret that the database is not available to the general public and whistleblowers.

Published by HT Digital Content Services with permission from RFI French.

Published by HT Digital Content Services with permission from Alwihda info. For any queries regarding this article or any other content requirements, please contact Editor-in-Chief at [email protected]