US Treasury Secretary Janet Yellen lamented that “huge amounts of illicit money” end up flowing into the US financial system, even though small countries are often considered prime havens for hiding money from tax authorities or money laundering.
Yellen said in a speech on the occasion of the Democracy Summit, Thursday, that “there are reasons to believe that the best place at the present time to hide and launder fraudulently acquired money is in fact the United States.”
Switzerland and the Cayman Islands are still a target of tax authorities around the world.
But the US secretary objected to the idea that money derived from corruption or illegal activity is only sent to “countries that have flexible and confidential financial laws,” stressing that it can “pass – or land – in our markets.”
She referred to the anti-corruption strategy launched by the administration of President Joe Biden this week.
She justified this by stressing the need to “shield the spotlight” on the “gray areas” in the United States, referring to US states that allow the establishment of fictitious companies without the knowledge of their true owners.
Last January, Congress passed a law requiring American companies to disclose their actual beneficiaries to the federal government, which represents a major shift in the United States, where legislation in this area can be very flexible in states such as Delaware, the stronghold of President Joe Biden. The proposal provides for the creation of a database to record the “actual owners” of all companies and many trusts, ie anyone who owns 25% of commercial enterprises or can make decisions for the company.
Yellen said similar rules would apply to real estate deals, “because a lot of corrupt people can hide their money in skyscrapers in Miami or Central Park.”
She continued, “The loophole tax system in the United States that allows the highest-paid people and the largest companies to get away with fraud.”
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