Tag: antimoneylaundering

The US bans anonymous shell companies in defense act’s anti-money-laundering reform

If you’re a corrupt foreign official or drug trafficker, there’s a pretty easy way to protect your illicit cash: create an anonymous shell company.

You form a shell company — meaning a business that exists only on paper, with no employees, no products it makes or sells, no revenue, nothing except maybe a bank account and some assets — but you do it without disclosing your (the owner’s) real name, offering a convenient way to launder your money and evade law enforcement in the United States.

Except that might now be a lot harder to do in the US. A provision in the National Defense Authorization Act (NDAA), the $741 billion defense bill, will effectively ban anonymous shell companies.

The NDAA passed with bipartisan support in Congress. Trump vetoed the package, but Congress voted overwhelmingly to override the president’s veto for the first time during Trump’s tenure.

That means