January 4, 2020

U.S. Anti-Money-Laundering Official Calls for Beneficial Ownership Registry

Citing Lack of business-ownership information creates a ‘dangerous and widening gap’ in the national security apparatus

By Dylan Tokar Dec. 10, 2019 7:53 pm ET

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WASHINGTON—A lack of information about who owns and controls businesses incorporated in the U.S. is creating a “dangerous and widening gap” in the country’s national security apparatus, the director of Treasury’s anti-money-laundering watchdog said.

“Criminals thrive when they have somewhere to hide,” Kenneth Blanco, the head of Treasury’s Financial Crimes Enforcement Network, said Tuesday at a conference on financial crime enforcement hosted by the American Bankers Association and the American Bar Association. “And the secrecy behind shell companies—businesses that exist only on paper—is a clear and present danger.”

Treasury officials, including Mr. Blanco, have previously endorsed the creation of a beneficial ownership registry, which would give law-enforcement officials and banks access to information on who owns companies incorporated in the U.S.

A bill that would create a registry passed in the House of Representatives in October. Similar legislation has been introduced in the Senate, where Republican Mike Crapo of Idaho, the chairman of the Banking Committee, has indicated he supports more shell-company disclosure.

Changes to the U.S.’s anti-money-laundering regime also have received support from the White House, which in October released a statement commending the passage of the House bill.

The main opponents to the legislation have proven to be groups representing small-business owners. The National Federation of Independent Business, for example, has argued that submitting beneficial ownership information will be overly burdensome to small businesses.

James Ballentine, a lobbyist for the American Bankers Association, which supports beneficial ownership legislation, also spoke at the conference. He said the association wanted to make it easier for banks to comply with existing anti-money-laundering laws. “The goal was not to be a burden on small businesses,” Mr. Ballentine said during a presentation on Monday.

Mr. Blanco on Tuesday said the information currently provided by banks on potentially suspicious transactions helped law-enforcement officials identify possible criminals and terrorists. But for banks to provide accurate reports, they need to know their customers, he said.

The Treasury Department in 2016 issued a rule that required some financial institutions to identify the beneficial owners of certain businesses when an account is opened. The rule came into effect in May 2018.

The next step is collecting beneficial ownership information when corporations are formed, Mr. Blanco said.

Write to Dylan Tokar at

Republished from the Washington Post