Panama Papers: Jubilee USA calls for US legislation on shell companies

Financial reforms NGO Jubilee USA Network says the Panama Papers leak highlights once again, the need for the United States of America to enact legislation against anonymous companies.

The Panama Papers, a great leak of over 11 million documents from a Panama based law firm Mossack Fonseca, show how politicians and public officials, and their associates, hide their wealth and avoid taxes through anonymous companies in tax havens.

In February 2016, America’s Congress introduced the Incorporation Transparency and Law Enforcement Assistance Act (HR 4450, S 2489) to collect ownership records for companies incorporated in the US and give law enforcement agencies access to that information.

While the law would make it harder to set up anonymous companies in the United States, and while the American government has pledged on several fora to increase transparency of companies formed in the US, the global anti-corruption body Transparency International says “meaningful progress in the U.S. remains elusive.”

A statement issued by Washington-based Jubilee USA Network, said the Panama Papers is “a blueprint for how the most vulnerable people in the world are harmed by financial secrecy” and highlights the need for US legislation on shell companies.

“Congress should pass legislation to make it more difficult to set up anonymous companies here in the US. These companies fuel corruption, poverty, human trafficking and armed conflict,” Eric LeCompte, Executive Director of Jubilee USA was quoted as saying.

The United States offers significant room for incorporation of anonymous companies and highly secretive states such as Delaware and Nevada are among the top destinations for incorporation of shell companies.

Over a million businesses are reported to have been incorporated in Delaware and the state was widely voted as one of the top cases in Transparency International’s “Unmask the Corrupt” campaign.

By Emmanuel Odonkor