US unveils measures to ‘combat tax evasion’, boost beneficial ownership reporting

The US Department of the Treasury unveiled new measures it said were aimed at countering money-laudering, corruption and tax evasion, after months of criticism over its growing status as a defacto “tax haven”.

The plans were unveiled by US Treasury Secretary Jacob J Lew, in a letter to Congress, according to a statement released by the the Treasury.

The beneficial ownership measures are contained in legislation that, according to the statement, “would require companies to know and report adequate and accurate beneficial ownership information at the time of a company’s creation, so that the information can be made available to law enforcement”.

As part o this legislation, “companies formed within the United States would be required to file beneficial ownership information with the Treasury Department, and face penalties for failure to comply”.

“The misuse of companies to hide beneficial ownership is a significant weakness in the US anti-money laundering/counter financing of terrorism regime that can only be resolved by Congressional action,” the Treasury statement continued.

“The new draft legislation is an amended version of an Administration Budget proposal, reflecting discussions with Congress, law enforcement entities, and others.”

Also planned are a so-called Customer Due Diligence (CDD) Final Rule and new regulations relating to “foreign-owned, single-member limited liability companies (LLCs)”.

“Together, these efforts target key points of access to the international financial system – when companies open accounts at financial institutions, when companies are formed or when company ownership is transferred, and when foreign-owned US companies seek to evade their taxes,” the Treasury statement said.

In his letter, Secretary Lew also urged Congress to act on a proposed measure that would provide “full reciprocity with our Foreign Account Tax Compliance Act (FATCA) partners” as well as to go ahead and approve certain bilateral tax treaties he said were currently pending in the Senate.

To read the statement on the Treasury’s website, click here.

To read a copy of Secretary Lew’s letter to Congress, click here.

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