The US Department of Treasure plans to issue a policy that will force banks to seek the identities of people behind shell-company account holders, following the leak of the unprecedented "Panama Papers" which started a worldwide uproar over hiding wealth via offshore banks.
The spokesman of the treasury department said the long-delayed rule would soon be turned over to the White House for evaluation and issuance, reports The Economic Times. However, the department made no confirmation yet as to when will the initiative be issued.
Mossack Fonseca, a Panama law firm whose internal records were hacked and leaked worldwide, allegedly helped political leaders, rich companies, and powerful individuals hide assets in offshore accounts. The United States itself was exceedingly troubled tracing the location and names of these accounts. The law firm had an office in Miami, dubbed as the Gateway to the Americas, and have virtually disappeared after the leak of what is now known as "Panama Papers".
USA Today reported that over 11.5 million documents have exposed world leaders, their associates, and their relatives. The governments across the world launched an investigation into possible financial wrongdoings. Mossack Fonseca claimed that it was the victim of a computer hack and that it has constantly acted appropriately.
Chip Poncy, a former Treasury official, said the documents offered validation for those who have been "screaming for a decade" about the need for financial institutions in the US and around the globe to address the risks of terror finance, money laundering, and other crime by identifying individuals who secretly control legal entities. Poncy added that the leaked files may give banks a glimpse into the kind of information on true or beneficial owners that they should be obtaining to better comprehend the flow of money they are facilitating.
According to Financial Times, the US government has the authority to take action, with Section 311 of the Patriot Act, providing the Treasury Department the power to impose fines or penalties on entire jurisdictions. Another former Treasury official Elizabeth Rosenberg claimed the leaked documents would be extremely useful to the US authorities as they try to map out the key associates of targeted individuals.
In 2014, the Treasury's anti-money laundering team, the Financial Crimes enforcement Network, issued a proposed policy on beneficial ownership, but the processes slowed down due to differences of opinion between financial regulators.
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