I 
113TH CONGRESS 
1ST SESSION H. R. 3331 
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 
OCTOBER 23, 2013 
Mrs. CAROLYN B. MALONEY of New York (for herself, Ms. WATERS, Ms. 
MOORE, and Mr. CAPUANO) introduced the following bill; which was re-
ferred to the Committee on Financial 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 28 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 2016, 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 residential or busi-
ness street address; and 
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‘‘(III) a unique identifying num-
ber from a non-expired passport 
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 
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by the formation agent as a beneficial 
owner for transfer to another person, the 
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. 
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‘‘(D) 
INFORMATION
REQUESTS.—Bene-
ficial ownership information relating to each 
corporation or limited liability company formed 
under the laws of the State shall be provided by 
the State upon receipt of— 
‘‘(i) a civil or criminal subpoena or 
summons from a State agency, Federal 
agency, or congressional committee or sub-
committee requesting such information; 
‘‘(ii) a written request made by a Fed-
eral agency on behalf of another country 
under an international treaty, agreement, 
or convention, or section 1782 of title 28, 
United States Code; or 
‘‘(iii) a written request made by the 
Financial Crimes Enforcement Network. 
‘‘(E) NO
BEARER
SHARE
CORPORATIONS 
OR
LIMITED
LIABILITY
COMPANIES.—A cor-
poration or limited liability company formed 
under the laws of the State may not issue a cer-
tificate in bearer form evidencing either a whole 
or fractional interest in the corporation or lim-
ited liability company. 
‘‘(2) 
STATES
THAT
LICENSE
FORMATION 
AGENTS.— 
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‘‘(A) IN GENERAL.—Notwithstanding para-
graph (1), a State described in subparagraph 
(B) may permit an applicant to form a corpora-
tion or limited liability company under the laws 
of the State, or a corporation or limited liability 
company formed under the laws of the State, to 
provide the required information to a licensed 
formation agent residing in the State, instead 
of to the State directly, if the application under 
paragraph (1)(A) or the update under para-
graph (1)(B) contains— 
‘‘(i) the name, current business ad-
dress, contact information, and licensing 
number of the licensed formation agent 
that has agreed to maintain the informa-
tion required under this subsection; and 
‘‘(ii) a certification by the licensed 
formation agent that the licensed forma-
tion agent has possession of the informa-
tion required under this subsection and 
will maintain the information in the State 
licensing the licensed formation agent in 
accordance with State law. 
‘‘(B) STATES
DESCRIBED.—A State de-
scribed in this subparagraph is a State that 
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maintains a formal licensing system for forma-
tion agents that requires a formation agent to 
register with the State, meet standards for fit-
ness and honesty, maintain a physical office 
and records within the State, undergo regular 
monitoring, and be subject to sanctions for non-
compliance with State requirements. 
‘‘(C) LICENSED
FORMATION
AGENT
DU-
TIES.—A licensed formation agent that receives 
beneficial ownership information under State 
law in accordance with this paragraph shall— 
‘‘(i) maintain the information in the 
State in which the corporation or limited 
liability company is being or has been 
formed in the same manner as required for 
States under paragraph (1)(C); 
‘‘(ii) provide the information under 
the same circumstances as required for 
States under paragraph (1)(D); and 
‘‘(iii) perform the duties of a forma-
tion agent under paragraph (3). 
‘‘(D) TERMINATION OF RELATIONSHIP.— 
‘‘(i) IN
GENERAL.—Except as pro-
vided in clause (ii), a licensed formation 
agent that receives beneficial ownership in-
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formation relating to a corporation or lim-
ited liability company under State law in 
accordance with this paragraph and that 
resigns, dissolves, or otherwise ends a rela-
tionship with the corporation or limited li-
ability company shall promptly— 
‘‘(I) notify the State in writing 
that the licensed formation agent has 
resigned or ended the relationship; 
and 
‘‘(II) transmit all beneficial own-
ership information relating to the cor-
poration or limited liability company 
in the possession of the licensed for-
mation agent to the licensing State. 
‘‘(ii) EXCEPTION.—If a licensed for-
mation agent receives written instructions 
from a corporation or limited liability com-
pany, the licensed formation agent may 
transmit the beneficial ownership informa-
tion relating to the corporation or limited 
liability company to another licensed for-
mation agent that is within the same State 
and has agreed to maintain the informa-
tion in accordance with this section. 
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‘‘(iii) NOTICE
TO
STATE.—If a li-
censed formation agent provides beneficial 
ownership information to another licensed 
formation agent under clause (ii), the li-
censed formation agent providing the infor-
mation shall promptly notify in writing the 
State under the laws of which the corpora-
tion or limited liability company is formed 
of the identity of the licensed formation 
agent receiving the information. 
‘‘(3) CERTAIN BENEFICIAL OWNERS.—If an ap-
plicant to form a corporation or limited liability com-
pany or a beneficial owner, officer, director, or simi-
lar agent of a corporation or limited liability com-
pany who is required to provide identification infor-
mation under this subsection does not have a non-
expired passport issued by the United States or a 
nonexpired drivers license or identification card 
issued by a State, each application described in 
paragraph (1)(A) and each update described in 
paragraph (1)(B) shall include a certification by a 
formation agent residing in the State that the for-
mation agent— 
‘‘(A) has obtained for each such person a 
current residential or business street address 
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and a legible and credible copy of the pages of 
a nonexpired passport issued by the government 
of a foreign country bearing a photograph, date 
of birth, and unique identifying information for 
the person; 
‘‘(B) has verified the name, address, and 
identity of each such person; 
‘‘(C) will provide the information described 
in 
subparagraph 
(A) 
and 
the 
proof 
of 
verification described in subparagraph (B) upon 
request under the same circumstances as re-
quired for States under paragraph (1)(D); and 
‘‘(D) will retain the information and proof 
of verification under this paragraph in the 
State in which the corporation or limited liabil-
ity company is being or has been formed until 
the end of the 5-year period beginning on the 
date that the corporation or limited liability 
company terminates under the laws of the 
State. 
‘‘(4) EXEMPT ENTITIES.— 
‘‘(A) IN
GENERAL.—A formation system 
described in paragraph (1) shall require that an 
application for an entity described in subpara-
graph (C) or (D) of subsection (d)(2) that is 
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proposed to be formed under the laws of a 
State and that will be exempt from the bene-
ficial ownership disclosure requirements under 
this subsection shall include in the application 
a certification by the applicant, or a prospective 
officer, director, or similar agent of the entity— 
‘‘(i) identifying the specific provision 
of subsection (d)(2) under which the entity 
proposed to be formed would be exempt 
from the beneficial ownership disclosure re-
quirements under paragraphs (1), (2), and 
(3); 
‘‘(ii) stating that the entity proposed 
to be formed meets the requirements for 
an entity described under such provision of 
subsection (d)(2); and 
‘‘(iii) providing identification informa-
tion for the applicant or prospective offi-
cer, director, or similar agent making the 
certification in the same manner as pro-
vided under paragraph (1) or (3). 
‘‘(B) EXISTING ENTITIES.—On and after 
the date that is 2 years after the effective date 
of the amendments to the formation system of 
a State made to comply with this section, an 
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entity formed under the laws of the State be-
fore such effective date shall be considered to 
be a corporation or limited liability company for 
purposes of, and shall be subject to the require-
ments of, this subsection unless an officer, di-
rector, or similar agent of the entity submits to 
the State a certification— 
‘‘(i) identifying the specific provision 
of subsection (d)(2) under which the entity 
is exempt from the requirements under 
paragraphs (1), (2), and (3); 
‘‘(ii) stating that the entity meets the 
requirements for an entity described under 
such provision of subsection (d)(2); and 
‘‘(iii) providing identification informa-
tion for the officer, director, or similar 
agent making the certification in the same 
manner as provided under paragraph (1) 
or (3). 
‘‘(C) EXEMPT ENTITIES HAVING OWNER-
SHIP INTEREST.—If an entity described in sub-
paragraph (C) or (D) of subsection (d)(2) has 
or will have an ownership interest in a corpora-
tion or limited liability company formed or to be 
formed under the laws of a State, the applicant, 
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corporation, or limited liability company in 
which the entity has or will have the ownership 
interest shall provide the information required 
under this subsection relating to the entity, ex-
cept that the entity shall not be required to pro-
vide information regarding any natural person 
who has an ownership interest in, exercises sub-
stantial control over, or receives substantial eco-
nomic benefits from the entity. 
‘‘(c) PENALTIES.— 
‘‘(1) IN GENERAL.—It shall be unlawful for— 
‘‘(A) any person to affect interstate or for-
eign commerce by— 
‘‘(i) knowingly providing, or attempt-
ing to provide, false or fraudulent bene-
ficial ownership information, including a 
false or fraudulent identifying photograph, 
to a State or licensed formation agent 
under State law in accordance with this 
section; 
‘‘(ii) willfully failing to provide com-
plete or updated beneficial ownership infor-
mation to a State or licensed formation 
agent under State law in accordance with 
this section; or 
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