July 5, 2017
STATEMENT BY FINANCIAL SERVICES SUPERINTENDENT MARIA T. VULLO IN SUPPORT OF PROPOSED FEDERAL BENEFICIAL OWNERSHIP LEGISLATION
The New York State Department of Financial Services ("DFS") supports the renewed effort of U.S. lawmakers to require disclosure of beneficial ownership of U.S. companies before they are permitted to engage in financial transactions, including opening bank accounts, transmitting funds and purchasing real estate.
DFS believes that disclosure of beneficial ownership is necessary to ensure that banking institutions are not utilized for illicit activity. Terrorists, cyber-criminals and kleptocrats use anonymity to hide, transfer and use money for a variety of illegal purposes. By using an anonymously-owned U.S. company, these bad actors can easily conceal their identity, and sources and uses of funds, making it difficult for regulators and law enforcement authorities to track them down. Requiring full transparency and disclosure of beneficial ownership when a company is established or incorporated in the U.S. would enhance the ability of state and federal enforcement and regulatory authorities to combat financial crime, terrorist financing and money laundering. These illicit activities constitute a major threat to the national safety and security of the United States. Terrorists, drug traffickers, human traffickers and other criminals, by using U.S. shell companies, are able to access cash in New York and other states through a variety of transactions, including purchasing real estate and then selling it, to finance criminal activities. Any measure that would assist financial institutions in ascertaining beneficial ownership of their corporate clients in conducting customer due diligence, as required by anti-money laundering laws and regulations, would be an important step towards fighting financial crime.