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Terrorism, INC. How shell companies aid terrorism, crime and corruption

Added 20 Dec 2013
Report by Open Society Foundations

WHAT’S THE PROBLEM? 

Terrorists are creating fake companies in the United States and Europe to launder money and finance their activities. And it’s not just terrorists. Drug lords, human traffickers, sanctions busters, and 
corrupt officials also move their money around using shell companies that are registered in countries with highly developed legal and banking systems. 

Unlike regular people, who must prove their identity when applying for a driver’s license, opening a bank account, or registering to vote, companies generally are not required to say who owns, controls, and profits from the company in order to receive the advantages and protections of our laws. Even law enforcement authorities have great difficulty in tracking down this information about who owns what. 

The dangers of allowing such secrecy are well known. According to UK Prime Minister David Cameron, "A lack of knowledge about who ultimately controls, owns and profits from companies leads to aggressive tax avoidance, tax evasion and money laundering, undermining tax bases and fuelling corruption across the world."

“Shells are the No. 1 vehicle for laundering illicit money and criminal proceeds,” said Lanny Breuer, who headed the criminal division of the U.S. Department of Justice. Most importantly, there are no legitimate reasons for companies to hide their identities. 

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