In the wake of the Panama Papers leak, the US is mulling introduction of a new rule that would require banks to identify owners of shell companies as part of efforts to plug a major loophole in its banking system, according to a media report.
“The rule is meant to close a major loophole in the American banking system that enables the sorts of secretive financial manoeuvres that were thrust into the spotlight this week with the leak of millions of documents from a law firm in Panama,” The New York Times reported on Wednesday.
Under existing federal regulations, banks with American branches in the US are required to “know their customers” who open accounts in the country. “But those rules have been significantly weakened because banks have not been required to know the identities of customers who set up accounts in names of shell companies,” the daily said.
The proposed Customer Due Diligence rule is an attempt to close that loophole, a senior Treasury official said.
The new rule will require banks to find out the identities of any individual who owns 25 per cent or more of corporate entities that open bank accounts, as well as any individuals exercising control over those entities, the report said.
Source
http://www.business-standard.com/article/international/us-mulls-new-rule-for-banks-to-identify-shell-firm-owners-116040800007_1.html
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