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A House committee approved H.R. 2513: Corporate Transparency Act of 2019 June 12, 2019 that would require companies to disclose the identity of their beneficial owners in an effort to unmask anonymous shell companies and help law enforcement combat illicit money laundering and tax evasion.

In a vote of 46-13, the House Committee on Financial Services favorably reported H.R. 2513, the Corporate Transparency Act of 2019, which would require U.S. companies to report the name, date of birth, passport or driver's license number and current address of those who receive the gain from company profits to the U.S. Department of the Treasury's Financial Crimes Enforcement Network. The bill may now be considered by the full chamber.

“Disrupting terrorist financing networks should be one of our top priorities, but right now, terrorist groups can easily hide their money using anonymous shell companies.” said Rep. Carolyn B. Maloney, D-N.Y., one of the original sponsors of the bill.

H.R. 2513 was introduced on May 3, 2019 and is in the first stage of the legislative process. It was introduced into Congress on May 3, 2019.

 

The signees included former military officers, government officials, law enforcement agents and foreign policy specialists.

The letter cited a recent report from Global Financial Integrity, a group that promotes financial transparency, that said U.S.-based shell companies are linked with tax evasion and hidden proceeds from smuggling, weapons dealing and other crimes.

 

The U.S. was the first country to enact reporting requirements for foreign banks holding Investment Accounts for US taxpayers, entitled U.S.the Foreign Account Tax Compliance Act (FATCA) in 2010. Those requirements became the basis for the Organization for Economic Cooperation and Development’s common reporting standard, which encourages countries to exchange information about financial account holders among their tax authorities.

 

However, currently The US is Now the 2nd Largest Tax Haven and is Scheduled to be Blacklisted by the EU!

 

The Bill Has a 12% Chance of Being Enacted.

 

The overall text of the bill does little to affect its chances of being enacted. The bill is assigned to the House Financial Services committee. The bill's primary subject is Finance and financial sector.

 

On November 11, 2015 we posted Finally the Senate Foreign Relations Committee Approves 8 Tax Treaties! where we discussed the lack of progress regarding the U.S.-Switzerland tax treaty remains stuck in the Senate after Sen. Rand Paul (R-Ky.) blocked an effort to propel it forward by Senate Foreign Relations Committee Chairman Robert Menendez (D-N.J.)

Back in 2015 Senator Rand Paul blocked the U.S. Senate from moving toward ratifying five pending tax treaties, saying they would make it easier for foreign governments to invade the privacy of Americans.  

The Treaties with: Chile, Hungary, Poland, Japan, Luxembourg, Spain, Switzerland, and the proposed protocol amending the multilateral Convention on Mutual Administrative Assistance in Tax Matters now have to be amended to reflect changes made by the 2017 TCJA tax act, before they can be brought back to the Senate for consideration. 

Now according to Law360, U.S. Senate Republican leaders have decided to bring several bilateral tax treaties that have languished for years to a vote in the full chamber this year, according to the chairman of the Senate Foreign Relations Committee.

 

Once the committee approves the seven pending bilateral tax treaties, which it should accomplish within the next two weeks or so, the full Senate will likely bring at least some of those agreements to a vote before the August recess, said the committee chairman, Sen. Jim Risch, R-Idaho.

 

Those agreements, however, most likely will be fought in committee and on the floor by Sen. Rand Paul, R-Ky., who was in talks recently with the U.S. Treasury Department to add language to the treaties that would provide greater privacy safeguards for Americans. The Senate has not passed any bilateral tax treaties since Paul joined the chamber in 2011 because of his privacy objections.

Talks to add privacy protections, which occurred in part between Paul and Treasury Secretary Steven Mnuchin, broke down after someone on the GOP leadership team informed the agency that the chamber plans to move forward with votes, regardless of any privacy-oriented concerns, Paul told Law360 on Monday.

“Treasury lost their zeal for compromise once leadership began agitating, saying they were doing it anyway,” Paul said.

Paul said he expects that when the treaties to come to the floor this year, Senate leaders will be forced to pursue their passage with his “kicking and screaming the whole way.”

The seven bilateral tax treaties in question would help prevent companies from being subject to double taxation and include mandatory arbitration agreements in addition to other important provisions. The delay in ratification has likely cost companies billions of dollars.

Walmart Inc. and Google LLC, joined by 83 other companies including Ford Motor Co. and Exxon Mobil Corp., signed on to a letter authored by the National Foreign Trade Council in April urging the Senate to pass pending treaties with Luxembourg, Switzerland, Chile, Spain, Poland, Hungary and Japan. The U.S. is currently party to more than 60 bilateral tax treaties.

Republican leadership in the chamber has “chosen the hard path, not the easy path,” Paul said, adding that he will attempt to amend the treaties in committee.

Still, the treaties already include language meant to safeguard Americans’ privacy rights. The pending U.S. tax treaty with Poland, for instance, states that information received by a state “shall be treated as secret in the same manner as information obtained under the domestic laws” and will not be unnecessarily disclosed, which is standard language in the agreements.