Senate Banking Committee Leaders Warn of Federal Override for Shell Companies

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Thursday, June 1, 2006
Author: 
Bruce Zagaris
Volume: 
22
Issue: 
6
220
Abstract: 
On April 4, 2006, Senate Banking Committee Chairman Richard C. Shelby (R-Ala.) and ranking Democrat Paul Sarbanes (Md.) expressed strong concern about the use of state-chartered shell companies to further money laundering and terrorist financing activities. Shelby and Sarbanes explained that, while such companies are creatures of state law, national security concerns will ultimately control oversight of such companies. In this regard, Shelby said “we cannot afford to let the states create a loophole that’s being used to abuse our financial system or to aid and abet money laundering, criminal activity [or] terrorist financing in any way.”