The US is the world’s second greatest contributor to global financial secrecy, according to the Tax Justice Network’s Financial Secrecy Index, only faring better than Switzerland in complicity in enabling financial secrecy schemes that foster tax abuse, money laundering and the financing of terrorism.
With all of the US’s major transparency shortcomings – eg no participation in global automatic exchange of banking information and lack of registered ownership information for legal vehicles – the US’s saving grace was that it didn’t permit private foundations to be created – this in part gave the US a lower secrecy score on the Financial Secrecy Index than Switzerland.
However, thanks to New Hampshire, private foundations can now be set up without needing to disclose the identity of their founders and beneficiaries, let alone their beneficial owners. But won’t the primary reason for setting up a private foundation be to make the world a better place, the way most people use trusts in places like the UK? No. This blog will show why trusts (and private foundations) should equally be required to disclose their beneficial owners in public registries.