Gatekeepers beware: The new US corporate transparency act could be a game-changer

AS AN anti-money laundering lawyer, I’ve frequently heard it said that the new US Corporate Transparency Act (CTA) – which requires certain corporations, limited liability companies and similar entities to disclose beneficial ownership information to the US Department of the Treasury for the first time – won’t make a difference. The reason? The “Tony Sopranos” of this world aren’t going to report anyway.

But this misunderstands perhaps the most important potential impact of the CTA, which goes into effect on Jan 1: dismantling the infrastructure that enables financial crimes by imposing liability on the corporate service providers or “gatekeepers” (lawyers, trustees, accountants and other corporate service providers) that allow (often unwittingly) the Sopranos to hide and launder billions of dollars. The law will result in substantial new enforcement risk for the organisations and individuals typically involved in supporting or helping to create US entities.

In 2014, an investigator posing as the representative of a corrupt foreign government met 16 Manhattan lawyers to request help moving millions in suspicious funds into the US. All but one in effect provided a road map on how to launder the money through shell corporations.