The US Treasury is moving to combat corruption, money laundering and tax evasion by shell companies by requiring firms disclose their ownership, according to proposed rules announced Tuesday.
The crackdown comes as President Joe Biden launches a government-wide effort against graft ahead of International Anti-Corruption Day on Thursday.
The proposal would create a database to record "beneficial owners" of all companies and many trusts, meaning anyone who owns 25 percent of a firm or can make decisions for the company, Treasury said.
"The proposed rule for beneficial ownership reporting is a major step toward addressing the gaps in our corporate transparency framework that allow corruption to flourish and illicit funds to flow into the United States," Treasury Secretary Janet Yellen said in a statement.
The rule "will help close the loopholes that undermine US national security, bolster economic fairness and protect the integrity of our financial system."
Treasury's corruption and terrorism watchdog, the Financial Crimes Enforcement Network (FinCEN), will collect public comments on the proposed rule through February 7, but officials could not provide a timeline on when a final rule might be adopted.
The beneficial ownership information reporting provisions are required under the Corporate Transparency Act (CTA) that Congress approved in early January.
Amid rising concern that US state governments are making their own loopholes that allow the creation of trusts that can serve as tax havens, Treasury officials told reporters they will gather information on how different states treat those entities.
While the proposed rule will apply to some business trusts, others likely would be exempt, the documents said.
A congressional subcommittee is due to hold a hearing on Wednesday on the issue of US tax havens following up on the so-called Pandora Papers, an investigation by a global network of investigative journalists on money laundering and tax dodging.
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