U.S. Treasury Issues Advisory on Potential Risks of Shell Companies

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Monday, January 1, 2007
Author: 
Bruce Zagaris
Volume: 
23
Issue: 
1
7
Abstract: 
On November 9, 2006, the U.S. Department of Treasury’s Financial Crimes Enforcement Network (FinCEN) issued an advisory to U.S. financial institutions on the potential risks associated with accounts maintained for shell companies. An accompanying report discussed the potential dangers of the use of limited liability companies due to their lack of transparency, both in the formation process and thereafter due to the inability to identify beneficial owners. For practitioners, it is important to note that this report suggests potentially imminent regulatory action.