Sunday, December 3, 2023


The new rule of the Financial Crimes Enforcement Network [31CFR Part 1010] which becomes effective on January 1, and is further strengthened on January 1, 2025, will not work to eliminate the information gap on Beneficial Ownership that allows money launderers and financial criminals to take full advantage of the Black Hole that is zero information on Ultimate Beneficial Ownership of corps.

USE IT, ABUSE IT & LOSE IT; That's the laundryman's Standard Operating Practice. I would have one of the corporate service providers in Delaware form a company, and then (1) fly to Philadelphia (2) take a taxi across the state line/border, (3) register a vessel at an obscure bait and tackle shop, using aliases whose signature were authenticated by a cooperating Notary Public  and (4) Fly back the same day and deliver the corporate records AND the vessel registration & Delaware hull number to clients.*

This long (and in 2025 shorter) lag time in requiring registration of beneficial ownership is too little, and far too late. Enterprising laundrymen have already used the corp for the illicit purposes therein intended. They will let the company expire for lack of filing Annual Report with the Secretary of State, but the damage has already been done.

Money launderers do not work at the pace of normal business; they are on overdrive 24/7. Do not expect them to (a) comply with this slow filing requirement and (2) even have that corporation active and operating at the time of the filing deadline. They will have already moved money, drugs, or something else in support of illicit activity, long before ANY deadline. Only if compliance with beneficial ownership was to be at corporate formation, with actual punishment teeth to enforce it, would it ever be effective. Nice try, FinCEN, but you have unfortunately not thought through the problem sufficiently to solve it.


* Alternatively, I would form a bearer share corporation in a Caribbean tax haven jurisdiction, fly in a maritime surveyor from the Cayman Islands to create the necessary inspection, and register the vessel remotely in the United Kingdom from Anguilla. By the time the files got to Cardiff, where vessel documentation was kept, the boat had already gone on a narcotics trafficking journey, and was due to be re-registered in Delaware all over again, and so it goes. Aircraft used for smuggling drugs or bulk cash is a story for another day.

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