S.1483 Would Require Public Disclosure of Private Company Information
ACG has been monitoring the progress of S.1483 - The Incorporation Transparency and Law Enforcement Assistance Act, introduced by Senator Carl Levin (D-Michigan). While intended to combat money laundering by having non-public companies disclose all of their beneficial owners, the bill fails to achieve that purpose and instead creates a new regulatory system that would require every U.S. business entity or firm – both public and private - to report any person or company with a beneficial (shareholders, lenders, etc.). This information would be reported to each state, and would then be made public in the 35 states that have “right to know” statutes.
These regulatory filings would have to be constantly updated; failure to do so or file would constitute a federal crime with the possibility of a prison term and/or fine. This is a new and onerous burden that would create new costs upon businesses. The bill also ignores existing systems that would allow law enforcement to access the needed information without placing new regulatory burdens on businesses.
In addition, the bill uses an overly broad definition of beneficial owner that includes entities such as trusts, venture capital interests, lien holders, accounts receivable, any entity that has an economic interest in the business. The bill creates an undue burden upon new entrepreneurs and start-ups since venture capital and angel investors often do not want to disclose their investments.
Senator Levin may attempt to attach this bill onto an existing legislative vehicle, such as the defense authorization bill, possibly as early as next week.
ACG has joined the US Chamber of Commerce and many other leading associations in voicing concerns about S. 1483 in a letter to the chairman and co-chairman of the Senate Homeland Security and Governmental Affairs Committee, which has jurisdiction over the bill.
ACG will be alerting members to this issue. To contact your Senator, click "Take Action" above.
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