Treasury’s Yellen unveils international pact to boost legal entities’ transparency

U.S. Treasury Secretary Janet Yellen takes questions on the Biden administration’s plans following the collapse of three U.S. lenders including Silicon Valley Bank and Signature Bank, as she testifies before a Senate Finance Committee hearing on U.S. President Joe Biden’s proposed budget request for fiscal year 2024, on Capitol Hill in Washington, U.S., March 16, 2023.REUTERS/Mary F. Calvert/File photo

WASHINGTON – U.S. Treasury Secretary Janet Yellen on Tuesday said she was launching a commitment between the United States and more than 20 foreign governments to create a registry of beneficial ownership of legal entities to help them more effectively fight corruption.

Yellen announced the new initiative, which includes steps to implement the Financial Action Task Force’s standards on transparency and beneficial ownership of legal entities, at the U.S. State Department’s Summit for Democracy.

The commitment requires signing countries to update legal and regulatory frameworks to ensure that law enforcement agencies and other authorities have efficient access to beneficial ownership information. This is aimed at making it more difficult for corrupt actors to conceal identities, assets and criminal activities through opaque corporate structures and legal entities.

“This commitment is in line with the revised FATF standard, which requires countries to improve the transparency of legal persons, like shell companies, and to prevent their misuse,” Yellen said in prepared remarks. “And it reaffirms the broad support that the United States and its democratic partners share for enhancing financial transparency, fighting corruption, and upholding the rule of law.”

Yellen said the signatories also were committing to prioritize the financial, personnel, and technical resources necessary to implement the ownership transparency measures as a core element of anti-money laundering and anti-terrorist financing network.