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Proyecto Senador Levin: Conozca A Su Cliente


The first time Senator Levin presented this Project was in 2006, after the overwhelming GAO report against the corporations and LLCs in the USA.  The GAO report unveiled the true reality that the USA didn’t require the client´s identity or the beneficiary owner of legal entities.    This legislation wasn’t approved then and it was later revived in 2008, 2009 and 2011 but wasn´t approved either.

The main reason is the opposition of Senators from states like Delaware and Nevada, whose income depends on the sales of corporations and LLC´s abroad.   Even to this date, the USA doesn´t practice or require the “Know Your Client” Policy on legal entities.



To ensure that persons who form corporations in the United States disclose the beneficial owners of those corporations, in order to prevent wrongdoers from exploiting United States corporations in ways that threaten homeland security, to assist law enforcement in detecting, preventing, and punishing terrorism, money laundering, and other misconduct involving United States corporations, and for other purposes.

Levin, Grassley Introduce Bill to Combat U.S. Corporations with Hidden Owners

Tuesday, August 2, 2011

WASHINGTON – Sen. Carl Levin, D-Mich., chairman of the Permanent Subcommittee on Investigations, and Sen. Chuck Grassley, R-Iowa, ranking member of the Senate Judiciary Committee, this week introduced the Incorporation Transparency and Law Enforcement Assistance Act to combat acts of terrorism, money laundering, tax evasion, and other wrongdoing facilitated by U.S. corporations with hidden owners. The bill would end the practice of the 50 States forming corporations for unidentified persons, and instead require the States to obtain the identities of the persons behind the corporations.


Congress finds the following:

(1) Nearly 2,000,000 corporations and limited liability companies are being formed under the laws of the States each year.

(2) Very few States obtain meaningful information about the beneficial owners of the corporations and limited liability companies formed under their laws.

(3) A person forming a corporation or limited liability company within the United States typically provides less information to the State of incorporation than is needed to obtain a bank account or driver’s license and typically does not name a single beneficial owner.

(4) Terrorists and other criminals have exploited the weaknesses in State formation procedures to conceal their identities when forming corporations or limited liability companies in the United States, and have then used the newly created entities to support terrorist organizations, drug trafficking organizations, and international organized crime groups, as well as commit misconduct affecting interstate and international commerce such as trafficking in illicit drugs, illegal arms trafficking, money laundering, tax evasion, Internet-based fraud, securities fraud, financial fraud, intellectual property crimes, and acts of foreign corruption.

(5) Among those who have abused State incorporation procedures, Victor Bout, a Russian arms dealer now in United States custody on terrorism-related charges, used at least 12 companies incorporated in Texas, Florida, and Delaware to carry out his activities, and has been indicted, in part, for conspiring to sell weapons to a terrorist organization trying to kill citizens of the United States and Federal officers and employees.

(6) Law enforcement efforts to investigate corporations and limited liability companies suspected of wrongdoing that threatens homeland security have been impeded by the lack of available beneficial ownership information, as documented in reports and testimony by officials from the Department of Homeland Security, the Department of Justice, the Financial Crimes Enforcement Network of the Department of the Treasury, the Internal Revenue Service, the Government Accountability Office, and others.

(7) In July 2006, a leading international antimoney laundering and anti-terrorist financing organization, the Financial Action Task Force on Money Laundering (in this section referred to as the ‘‘FATF’’), of which the United States is a member, issued a report that criticized the United States for failing to comply with a FATF standard on the need to collect beneficial ownership information and urged the United States to correct this deficiency by July 10 2008.

(8) In response to the FATF report and to strengthen measures to protect homeland security, Federal officials have repeatedly urged the States to improve their formation practices by obtaining beneficial ownership information for the corporations and limited liability companies formed under the laws of such States. But the States continue to form millions of corporations with hidden owners.

(9) Many States have established automated procedures that allow a person to form a new corporation or limited liability company within the State within 24 hours of filing an online application, without any prior review of the application by a State official. In exchange for a substantial fee, 2 States will form a corporation within 1 hour of a request.

(10) Dozens of Internet websites highlight the anonymity of beneficial owners allowed under the formation practices of some States, point to those practices as a reason to incorporate in those States, and list those States together with offshore jurisdictions as preferred locations for the formation of new corporations, essentially providing an open invitation to terrorists and other wrongdoers to form entities within the United States.

(11) In contrast to practices in the United 13 States, all 27 countries in the European Union are already required to have formation agents identify the beneficial owners of the corporations formed by those agents under the laws of those countries.

(12) To protect homeland security, reduce the vulnerability of the United States to wrongdoing by United States corporations and limited liability companies with hidden owners, protect interstate and international commerce from terrorists and other criminals misusing United States corporations and limited liability companies, strengthen law enforcement investigations of suspect corporations and limited liability companies, set minimum standards for and level the playing field among State formation practices, and bring the United States into compliance with international anti-money laundering and anti-terrorist financing standards, Federal legislation is needed to require the States to obtain beneficial ownership information for the corporations and limited liability companies formed under the laws of such States.

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