Update, 4:47 p.m., May 6, 2016: A day after the White House announced new proposals to crack down on tax evasion, President Obama himself addressed the Panama Papers during a press conference on Friday.
While speaking to reporters about the economy, Obama said the investigations by the International Consortium of Investigative Journalists bring renewed attention to the issue of financial transparency.
“We saw what happened with the release of the Panama Papers,” Obama said. “And we’ve seen the degree to which both legal practices of tax avoidance that are still unfair and bad for the economy, as well as illegal practices that, in some cases, involve nefarious activities continue to exist and to spread.”
In the wake of the public firestorm sparked by the Panama Papers scandal, the Obama administration unveiled a series of new proposals today that would crack down on offshore secrecy and illicit financial transactions.
In a news conference this afternoon, administration officials announced that the U.S. Treasury Department would send proposed legislation to Congress that would require companies set up in the United States to report their real owners to the agency’s Financial Crimes Enforcement Network. This would for the first time create a national registry that could be used by law enforcement authorities to ferret out the real people behind anonymous companies used in money laundering and other wrongdoing.
The proposal acknowledges the reality that the U.S. itself is a key player in the system of offshore secrecy, through such states as Delaware, Nevada and Wyoming that allow the creation of shell companies that hide their owners’ identities and activities.
Wally Adeyemo, the U.S. deputy national security advisor for international economics, said the Obama administration has been working hard for years to address the issue of offshore-fueled misconduct but that the Panama Papers disclosures “highlight the fact that more needs to be done” to fight money laundering, terrorism financing and tax evasion.
“Our financial system should not provide the rich, the powerful and the corrupt with the opportunity to shield their assets and avoid paying their fair share or with the opportunity to hide any illicit activity,” Adeyemo said. “Nobody should be able to hide in shadows from their legal obligations and nobody should be able to play by a different set of rules.”
Adeyemo noted that U.S. investigations have prompted 80 Swiss banks to admit to “engaging in tax evasion and related criminal conduct” and forced them to pay more than $1.3 billion in penalties. In addition, he said, the U.S. tax amnesty program has prompted more than 54,000 taxpayers “to do the right thing and resolve their past non-compliance,” and has collected more than more than $8 billion in the process.
Treasury Secretary Jacob Lew sent a letter today to U.S. House Speaker Paul Ryan urging Congress to pass the legislation creating a central ownership registry for shell companies.
Lew also asked Senate leaders to take action to approve eight tax treaties that the U.S. has negotiated with other countries, agreements that would allow better sharing of information with other governments about Americans holding assets overseas. He noted that American tax treaties with two well-known tax havens, Switzerland and Luxembourg, have been waiting for Senate approval for more than five years.