U.S Treasury Secretary, Janet Yellen has affirmed America’s commitment to enhancing corporate transparency along with more than 20 other countries at the Summit for Democracy.
The Biden administration has invited 120 global leaders to the second Summit for Democracy being held in Washington from Wednesday, March 29, 2023 to Thursday, March 30, 2023. The summit will be co-hosted by the governments of Costa Rica, the Netherlands, South Korea and Zambia.
Yellen pledged at the summit that her department would maintain a database, known as the beneficial ownership registry, and would ensure that law enforcement will have access and that individuals’ personal data will be protected.
“The beneficial ownership database will deter dirty money from entering the U.S.,” Yellen averred.
The registry will contain personal information on the owners of at least 32 million U.S. businesses as part of an effort to combat corruption.
Colombia, Malta and Japan are some of the countries included in the commitment.
“Unmasking shell corporations is the single most significant thing we can do to make our financial system inhospitable to corrupt actors.”
Janet Yellen
The U.S Treasury Secretary added that efforts with allies over the last year to track sanctioned Russian assets have “underscored our vulnerability” in tracking business ownership.
The United States is making the push to combat illicit finance, in part, as a response to Russia’s invasion of Ukraine, as the U.S. tries to more easily identify wealthy Russians who are accused of hiding stolen money and assets in the United States and around the world.
Nate Sibley, a research fellow with Hudson Institute’s Kleptocracy Initiative stressed that the “beneficial ownership registry, properly implemented, is an essential and long overdue tool for tackling money laundering and sanctions evasion.”
“It’s absurd that the U.S. promulgates the most aggressive global sanctions and law enforcement campaigns but can’t see who is burying money in its own backyard.”
Nate Sibley
Ian Gary, Executive Director of the Financial Accountability and Corporate Transparency Coalition opined that the Biden administration should also move to “put in place new regulations to tackle the scourge of money laundering in the $50 trillion U.S. real estate sector.”
Pakistan To Skip Summit For Democracy
In other developments, Pakistan announced on Tuesday, March 28, 2023, that it will not participate in this week’s U.S.-led Summit for Democracy.
Pakistan’s Foreign Ministry, in a statement, thanked the United States and its co-hosts for the invitation. Pakistan was also not part of the first and only other summit held in December 2021.
Pakistani Analyst, Imtiaz Gull, Executive Director at the Islamabad-based Center for Research and Security Studies opined that there were multiple factors behind Pakistan’s decision to skip the summit. One of them is Pakistan’s desire to ease concerns from China, which was not invited.
While relations between the U.S. and China have been strained, China has been helping Pakistan’s efforts to overcome its deepening economic crisis.
Gull also noted the growing instability in Pakistan amid a widening crackdown on Former Prime Minister, Imran Khan and his political party as a factor for Pakistan to bow out of the summit.
“It does not happen in democracies what is happening in Pakistan, where the country’s former Premier Khan has been implicated in more than 127 cases, and hundreds of his party workers have been arrested on a range of charges, including terrorism.
“What would you present there if you go to participate in the summit about democracy and democratic values?”
Imtiaz Gull
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