I 
112TH CONGRESS 
1ST SESSION H. R. 3416 
To amend title 31, United States Code, to ensure that persons who form 
corporations or limited liability companies in the United States disclose 
the beneficial owners of those corporations or limited liability companies, 
in order to prevent wrongdoers from exploiting United States corpora-
tions and limited liability companies for criminal gain, to assist law 
enforcement in detecting, preventing, and punishing terrorism, money 
laundering, and other misconduct involving United States corporations 
and limited liability companies, and for other purposes. 
IN THE HOUSE OF REPRESENTATIVES 
NOVEMBER 14, 2011 
Mrs. MALONEY (for herself, Mr. FRANK of Massachusetts, and Mr. LYNCH) 
introduced the following bill; which was referred to the Committee on Fi-
nancial Services 
A BILL 
To amend title 31, United States Code, to ensure that per-
sons who form corporations or limited liability companies 
in the United States disclose the beneficial owners of 
those corporations or limited liability companies, in order 
to prevent wrongdoers from exploiting United States cor-
porations and limited liability companies for criminal 
gain, to assist law enforcement in detecting, preventing, 
and punishing terrorism, money laundering, and other 
misconduct involving United States corporations and lim-
ited liability companies, and for other purposes. 
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Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled, 
SECTION 1. SHORT TITLE. 
This Act may be cited as the ‘‘Incorporation Trans-
parency and Law Enforcement Assistance Act’’. 
SEC. 2. FINDINGS. 
Congress finds the following: 
(1) Nearly 2,000,000 corporations and limited 
liability companies are being formed under the laws 
of the States each year. 
(2) Very few States obtain meaningful informa-
tion about the beneficial owners of the corporations 
and limited liability companies formed under their 
laws. 
(3) A person forming a corporation or limited 
liability company within the United States typically 
provides less information to the State of incorpora-
tion than is needed to obtain a bank account or driv-
er’s license and typically does not name a single ben-
eficial owner. 
(4) Criminals have exploited the weaknesses in 
State formation procedures to conceal their identi-
ties when forming corporations or limited liability 
companies in the United States, and have then used 
the newly created entities to commit crimes affecting 
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interstate and international commerce such as ter-
rorism, drug trafficking, money laundering, tax eva-
sion, securities fraud, financial fraud, and acts of 
foreign corruption. 
(5) Law enforcement efforts to investigate cor-
porations and limited liability companies suspected 
of committing crimes have been impeded by the lack 
of available beneficial ownership information, as doc-
umented in reports and testimony by officials from 
the Department of Justice, the Department of 
Homeland Security, the Financial Crimes Enforce-
ment Network of the Department of the Treasury, 
the Internal Revenue Service, and the Government 
Accountability Office, and others. 
(6) In July 2006, a leading international anti- 
money laundering organization, the Financial Action 
Task Force on Money Laundering (in this section 
referred to as the ‘‘FATF’’), of which the United 
States is a member, issued a report that criticizes 
the United States for failing to comply with a FATF 
standard on the need to collect beneficial ownership 
information and urged the United States to correct 
this deficiency by July 2008. 
(7) In response to the FATF report, the United 
States has repeatedly urged the States to strengthen 
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their incorporation practices by obtaining beneficial 
ownership information for the corporations and lim-
ited liability companies formed under the laws of 
such States. 
(8) Many States have established automated 
procedures that allow a person to form a new cor-
poration or limited liability company within the 
State within 24 hours of filing an online application, 
without any prior review of the application by a 
State official. In exchange for a substantial fee, 2 
States will form a corporation within 1 hour of a re-
quest. 
(9) Dozens of Internet Web sites highlight the 
anonymity of beneficial owners allowed under the in-
corporation practices of some States, point to those 
practices as a reason to incorporate in those States, 
and list those States together with offshore jurisdic-
tions as preferred locations for the formation of new 
corporations, essentially providing an open invitation 
to criminals and other wrongdoers to form entities 
within the United States. 
(10) In contrast to practices in the United 
States, all 27 countries in the European Union are 
required to have formation agents identify the bene-
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ficial owners of the corporations formed under the 
laws of the country. 
(11) To reduce the vulnerability of the United 
States to wrongdoing by United States corporations 
and limited liability companies with hidden owners, 
to protect interstate and international commerce 
from criminals misusing United States corporations 
and limited liability companies, to strengthen law en-
forcement investigations of suspect corporations and 
limited liability companies, to set minimum stand-
ards for and level the playing field among State in-
corporation practices, and to bring the United States 
into compliance with its international anti-money 
laundering standards, Federal legislation is needed 
to require the States to obtain beneficial ownership 
information for the corporations and limited liability 
companies formed under the laws of such States. 
SEC. 3. TRANSPARENT INCORPORATION PRACTICES. 
(a) TRANSPARENT INCORPORATION PRACTICES.— 
(1) IN
GENERAL.—Chapter 53 of title 31, 
United States Code, is amended by inserting after 
section 5332 the following new section: 
‘‘§ 5333. Transparent incorporation practices 
‘‘(a) REPORTING REQUIREMENTS.— 
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‘‘(1) IN GENERAL.—Not later than the begin-
ning of fiscal year 2014, the Secretary of the Treas-
ury shall issue regulations requiring each corpora-
tion and limited liability company formed in a State 
that does not have a formation system described 
under subsection (b) to file with the Secretary such 
information as the corporation or limited liability 
company would be required to provide the State if 
such State had a formation system described under 
subsection (b). 
‘‘(2) DISCLOSURE OF BENEFICIAL OWNERSHIP 
INFORMATION.—Beneficial ownership information 
reported to the Secretary of the Treasury pursuant 
to paragraph (1) shall be provided by the Secretary 
of the Treasury upon receipt of— 
‘‘(A) a civil or criminal subpoena or sum-
mons from a State agency, Federal agency, or 
congressional committee or subcommittee re-
questing such information; 
‘‘(B) a written request made by a Federal 
agency on behalf of another country under an 
international treaty, agreement, or convention, 
or an order under section 3512 of title 18, 
United States Code, or section 1782 of title 28, 
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United States Code, issued in response to a re-
quest for assistance from a foreign country; or 
‘‘(C) a written request made by the Finan-
cial Crimes Enforcement Network of the De-
partment of the Treasury. 
‘‘(b) FORMATION SYSTEM.— 
‘‘(1) IN GENERAL.—With respect to a State, a 
formation system is described under this subsection 
if it meets the following requirements: 
‘‘(A) IDENTIFICATION
OF
BENEFICIAL 
OWNERS.—Except as provided in paragraphs 
(2) and (4), and subject to paragraph (3), each 
applicant to form a corporation or limited liabil-
ity company under the laws of the State is re-
quired to provide to the State during the forma-
tion process a list of the beneficial owners of 
the corporation or limited liability company 
that— 
‘‘(i) except as provided in subpara-
graph (F), identifies each beneficial owner 
by— 
‘‘(I) name; 
‘‘(II) current street address; and 
‘‘(III) a unique identifying num-
ber from a non-expired passport 
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issued by the United States or a non- 
expired drivers license issued by a 
State; and 
‘‘(ii) if the applicant is not the bene-
ficial owner, provides the identification in-
formation described in clause (i) relating 
to the applicant. 
‘‘(B) UPDATED INFORMATION.—For each 
corporation or limited liability company formed 
under the laws of the State— 
‘‘(i) the corporation or limited liability 
company is required by the State to update 
the list of the beneficial owners of the cor-
poration or limited liability company by 
providing the information described in sub-
paragraph (A) to the State not later than 
60 days after the date of any change in the 
list of beneficial owners or the information 
required to be provided relating to each 
beneficial owner; 
‘‘(ii) in the case of a corporation or 
limited liability company formed or ac-
quired by a formation agent and retained 
by the formation agent as a beneficial 
owner for transfer to another person, the 
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formation agent is required by the State to 
submit to the State an updated list of the 
beneficial owners and the information de-
scribed in subparagraph (A) for each such 
beneficial owner not later than 10 days 
after date on which the formation agent 
transfers the corporation or limited liabil-
ity company to another person; and 
‘‘(iii) the corporation or limited liabil-
ity company is required by the State to 
submit to the State an annual filing con-
taining the list of the beneficial owners of 
the corporation or limited liability company 
and the information described in subpara-
graph (A) for each such beneficial owner. 
‘‘(C) RETENTION OF INFORMATION.—Ben-
eficial ownership information relating to each 
corporation or limited liability company formed 
under the laws of the State is required to be 
maintained by the State until the end of the 5- 
year period beginning on the date that the cor-
poration or limited liability company terminates 
under the laws of the State. 
‘‘(D) 
INFORMATION
REQUESTS.—Bene-
ficial ownership information relating to each 
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