Hiding money with a shell company? Not for long

Shell company

The US Treasury Department has nearly finalized new rules that will make it harder for banks and clients to hide money and commit other financial crimes with offshore accounts and shell corporations.

Under the agencies new rules, which have long been in the works, banks will now be forced to reveal who is behind shell companies that have accounts.

Under the lack of current rules, shell companies can shield their owners from federal scrutiny, effectively hiding money from authorities.

News of the nearly finalized plans arrive just one week after more than 11 million documents from a law firm in Panama revealed thousands of tax dodgers and shell companies.

The biggest issue in the US is that some companies can conduct business and banking transactions without revealing who owns and controls them.

Under new rules, banks will need to disclose any individuals who own 25% or more of a corporate entity that opens bank accounts.

“Clarifying [the banking] industry’s obligations … will help address a significant vulnerability in our … framework — the potential for the misuse of legal entities to carry out financial crimes,” Deputy Assistant Secretary Jennifer Fowler said at an anti-money laundering conference on Wednesday.

Details of the new rules would be published in the “very near future,” Fowler said.

Similar rules were proposed in 2012 and 2014 but faced strong opposition from banks.