U. S. vows to crack down on shell companies as tax dodges

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Source:   —  April 07, 2016, at 6:28 PM

S. Treasury Dept is near to releasing a map to shine a light on the owners of shell companies. The goal is to crack down on tax dodges and other financial crimes.

U. S. vows to crack down on shell companies as tax dodges

The U. S. Treasury Dept is near to releasing a map to shine a light on the owners of shell companies. The goal is to crack down on tax dodges and other financial crimes.

New rules, long in the works, will require that banks know and reveal who's behind shell companies that have accounts. Currently, shell companies can shield their owners from federal scrutiny, effectively hiding money from authorities.

The news comes in the wake of a leak of more than eleven million documents from a law firm in Panama that allegedly helped set up secret shell companies and offshore accounts for wealthy and powerful clients around the globe.

Portion of the problem is that below U. S. law, some companies can conduct business and banking transactions without disclosure of the people who own and control them.

Related: Panama Papers - Banks dismiss claims they helped cover money

The new regulation will require banks to discover out the identities of any individuals who own twenty-five percent or more of corporate entities that open bank accounts, as well as any individuals exercising control over those entities, according to the NY Times, which reported on the new rules on Wednesday night.

"Clarifying [the banking] industry'south obligations ... will assistance address a significant vulnerability in our ... framework -- the potential for the misuse of valid entities to carry out financial crimes," Deputy Helper Secretary Jennifer Fowler said at an anti-money laundering conference on Wednesday.

Details of the new rules would be published in the "very close future," Fowler said.

Related: Panama Papers firm helped create more than 1.000 U. S. companies

The Treasury Dept was trying to crack down on shell companies long before the so-called Panama Papers leak.

Earlier versions of the rules were proposed by Treasury as distant back as two thousand twelve and two thousand fourteen. But those efforts stalled after opposition from banks and a lack of public pressure to crack down on shell companies. Presently the Panama Papers leak has stirred public attention about the issue.

-- CNNMoney'south Christine Romans contributed to this report.

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