In a recent report on the US beneficial ownership rule, journalist Mike LaSusa discussed the potential impact of the rule on Latin American crime groups and the challenges it faces. The report was published by Insight Crime on December 12.
Mike LaSusa, Deputy Director of Content at Insight Crime, has highlighted that the newly implemented US anti-money laundering rule targeting shell companies could significantly affect Latin American crime groups. However, this is contingent upon authorities overcoming resource constraints and other limitations to its effectiveness. The beneficial ownership rule is a key component of the 2021 Corporate Transparency Act. It requires companies operating in the United States to disclose information about their actual owners and controllers, with an aim to combat tax evasion and money laundering by preventing anonymous company establishments. Despite being celebrated as a transformative law, the US has been slow compared to other financial centers in adopting beneficial ownership requirements.
LaSusa pointed out that as a major global financial hub for organized crime, the US sees an estimated $300 billion laundered annually. The absence of a national beneficial ownership registry has been identified as a significant loophole, allowing Latin American criminal organizations to use anonymous shell companies for multimillion-dollar laundering schemes within the country. The new regulation seeks to address this issue by collecting beneficial ownership information in a centralized national database, making it more difficult for money launderers to hide links between criminal actors and their profits.
LaSusa further noted that implementing this rule is expected to face substantial challenges due to resource constraints. The Financial Crimes Enforcement Network (FinCEN) anticipates receiving beneficial ownership filings from over 32 million companies next year while its staff consists of only around 300 people and its total budget is less than $200 million per year. This resource gap raises doubts about FinCEN's ability to handle such a large influx of information effectively. Despite the potential impact on money laundering, questions also persist about data access, privacy concerns, and overall effectiveness of the reporting requirements.
