Obama administration officials on Thursday announced new actions designed to fight money laundering, corruption and tax evasion.
The initiatives include final and proposed rules from the Treasury Department, as well as administration calls for congressional action.
“Nobody should be able to hide in the shadows of their legal obligations,” Wally Adeyemo, deputy national security adviser for international economics, said in a call with reporters.
{mosads}The issues of money laundering and tax evasion have been brought to the forefront recently as a result of the “Panama Papers,” documents from a Panama-based law firm that sets up anonymous shell companies for its clients. While having a shell company is itself not illegal, they can be used for illegal purposes, such as money laundering and tax evasion.
Administration officials said the executive branch’s latest actions have been in the works for a while. But, “the Panama Papers underscore the importance of the efforts the United States has taken domestically, and the efforts we have undertaken with our international partners, to address these shared challenges,” the White House said in a fact sheet.
One of the new actions is a final rule from Treasury that requires financial institutions to know and verify the identities of the actual people who own and control companies or of the “beneficial owners” when the entities open accounts. The rule also helps make information available to law enforcement officers that could help them disrupt illicit financial networks, according to the fact sheet.
Treasury and the Internal Revenue Service are also proposing regulations on Friday that would close a loophole that enables the shielding of foreign assets through U.S.–based anonymous companies.
A narrow class of foreign-owned U.S. companies currently has no requirement to report tax information to the IRS. But the rule requires these companies to obtain IRS-issued employer identification numbers.
The Obama administration is also urging Congress to pass legislation and ratify treaties that would help the U.S. fight financial crimes.
Treasury on Friday will send draft legislation to Congress that would require companies to report information on their beneficial owners to the department.
The Justice Department announced that it is also sending Congress legislative proposals that concern the illegal proceeds of transnational corruption and substantive corruption offenses.
Treasury Secretary Jack Lew on Thursday sent a letter to members of Congress urging the Senate to approve eight tax treaties that have been awaiting action for several years. The treaties would help the U.S. enforce tax laws, Lew said.
Lew also urged Congress to pass an administration proposal that would allow the U.S. to provide its partner countries under the Foreign Account Tax Compliance Act with the same information that the partners provide to the IRS.
“Additional statutory authority is necessary to put the United States in the strongest position to combat bad actors who seek to hide their financial dealings and evade their tax responsibilities,” Lew said in the letter. “That is why I am urging legislative action on these important issues.”