12.11.20

Whitehouse Cheers Passage of Beneficial Ownership Provisions in NDAA

Legislation in must-pass defense bill clamps down on use of American shell corporations to hide the assets of criminals and foreign enemies; Whitehouse has long championed transparency to aid law enforcement in accessing to beneficial ownership information

Washington, DC – Senator Sheldon Whitehouse (D-RI) released the following statement today on provisions included in the National Defense Authorization Act to help prevent criminals and foreign enemies from hiding assets from law enforcement and tax authorities. The defense bill provisions will require reporting of the beneficial owner – the real person – behind U.S. corporations for use by law enforcement, revealing whether criminals, foreign state actors, and terrorists are exploiting American shell corporations to hide money.

“I’m thrilled to see this important legislation included in the must-pass National Defense Authorization Act. It’s far too easy for a domestic criminal or foreign strongman to set up a shell corporation in the United States to hide their ill-gotten gains. I’ve fought to pass legislation to shine a light on who’s actually behind American shell corporations, so law enforcement can take on the abuse of America’s legal and financial institutions more effectively. Now, we’re poised to pass that transparency into law. Thank you to my partners in this work, Senators Grassley, Feinstein, Graham, Crapo and Brown, for making this win possible. This has been a long struggle through a lot of disinformation.”

With Senator Chuck Grassley (R-IA), Whitehouse led the bipartisan TITLE Act to require the collection of information on the real person behind the incorporation of a company in the United States – a goal the NDAA beneficial ownership provisions will achieve. Whitehouse and Grassley’s bill would have required beneficial ownership information to be collected by states for use by law enforcement. Whitehouse agreed to the Senate Banking Committee compromise version of the provisions included in the NDAA, which will collect beneficial ownership information at the Treasury Department’s Financial Crimes Enforcement Network.

In the Senate, Whitehouse has long fought against illegal activity facilitated by shell corporations and other methods of obscuring the flow of illicit funds. In addition to championing the TITLE Act, he has introduced comprehensive legislation to limit foreign influence in our elections, which includes measures to guard against foreign adversaries using shell corporations to carry out their agenda. He has also led hearings in the full Senate Judiciary Committee, the Senate Judiciary Subcommittee on Crime and Terrorism, and the Helsinki Commission to highlight the issue and spur action to address dangers from shell corporations.

Whitehouse is recognized as a leading thinker on the threats to our democracy from kleptocrats and other foreign enemies seeking to exploit America’s laws and democratic system of government. Last year, Whitehouse published an article with General David Petraeus in the Washington Post calling on U.S. leaders to take a more active role globally in defending the rule of law and democratic institutions. He has also spoken at numerous think tanks and forums – such as the Atlantic Council, Sedona Forum, and Hudson Institute – about the dangers of foreign influence and kleptocracy.