Treasury Secretary Janet Yellen on Tuesday reaffirmed the U.S. commitment to corporate transparency, along with more than 20 other countries participating in this week’s Democracy Summit.
While the U.S. government is already working to create a database on small businesses, Yellen pledged Tuesday that her department will maintain that database, known as the beneficial ownership registry, to which law enforcement agencies will have access and that individuals’ data will be protected.
“The beneficial ownership registry will prevent dirty money from entering the United States,” Yellen said in a speech before the start of the summit.
The registry will contain the personal information of the owners of at least 32 million companies, part of an effort to fight corruption.
Colombia, Malta and Japan are among the countries included in the agreement.
“Unmasking shell companies is the most important thing we can do to make our financial system inhospitable to corrupt actors,” Yellen said. She added that efforts with other countries in recent months to track sanctioned Russian assets have “revealed our vulnerabilities” in tracking business owners.
The U.S. is trying to combat illicit financing – partly in response to Russia’s invasion of Ukraine – in order to identify wealthy Russians accused of hiding money and property in the U.S. and elsewhere around the world.
The Democracy Summit kicks off on Wednesday. The United States is co-hosting the event along with the governments of Costa Rica, the Netherlands, South Korea and Zambia.
In September of last year, the Treasury Department began drafting the rules to create the small business database. The rule requires most U.S. businesses with fewer than 20 employees to register with the government by Jan. 1, 2024.
“We have seen corrupt foreign officials hide stolen funds in shell companies in the United States; we have seen kleptocrats launder bribes through anonymous real estate purchases overseas; and we have seen elites transfer corrupt money through complicit or ignorant intermediaries such as lawyers or financial advisors,” Yellen said in a statement.