Sec. 431. Findings on transparency and disclosure; sense of Congress
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/bill/116/s/4629/is/section-431·A research copy — for the controlling text, always check the official state or federal source. Not legal advice.
Congress finds the following: More than 2,000,000 corporations and limited liability companies are formed under the laws of the States each year and some of those entities are formed by persons outside of the United States, including by persons in the People’s Republic of China. Most or all States do not require information about the beneficial owners of the corporations, limited liability companies, or other similar entities formed under the laws of the State. Malign actors seek to conceal their ownership of corporations, limited liability companies, or other similar entities in the United States to facilitate illicit activity, including money laundering, the financing of terrorism, proliferation financing, serious tax fraud, human and drug trafficking, counterfeiting, piracy, securities fraud, financial fraud, economic espionage, theft of intellectual property, and acts of foreign corruption, which harm the national security interests of the United States and allies of the United States.
National security, intelligence, and law enforcement investigations have consistently been impeded by an inability to reliably and promptly obtain information identifying the persons that ultimately own corporations, limited liability companies, or other similar entities suspected of engaging in illicit activity, as documented in reports and testimony by officials from the Department of Justice, the Department of Homeland Security, the Department of the Treasury, the Government Accountability Office, and other agencies.
In the National Strategy for Combating Terrorist and Other Illicit Financing, issued in 2020, the Department of the Treasury found the following: Misuse of legal entities to hide a criminal beneficial owner or illegal source of funds continues to be a common, if not the dominant, feature of illicit finance schemes, especially those involving money laundering, predicate offences, tax evasion, and proliferation financing. . Federal legislation providing for the collection of beneficial ownership information by the Financial Crimes Enforcement Network of the Department of the Treasury (referred to in this section as FinCEN ) with respect to corporations, limited liability companies, or other similar entities formed under the laws of the States is needed to— set a clear, Federal standard for incorporation practices; protect vital United States national security interests; protect interstate and foreign commerce; better enable critical national security, intelligence, and law enforcement efforts to identify and counter money laundering, the financing of terrorism, and other illicit activity; and bring the United States into compliance with international standards with respect to anti-money laundering and countering the financing of terrorism.
Providing beneficial ownership information to FinCEN is especially important in cases in which— foreign firms, including those in the People’s Republic of China or subject to the jurisdiction of the People’s Republic of China, seek to acquire United States firms and the valuable intellectual property of those firms; and the acquisitions described in subparagraph
(A)pose a threat to the economic or national security of the United States. It is the sense of Congress that, before the end of the 116th Congress, Congress should enact comprehensive beneficial ownership legislation that includes strong transparency and disclosure requirements ensuring that complete beneficial ownership information is provided by all domestic and foreign corporations, limited liability companies, and similar entities formed in the United States.