Legislation Is Targeting 'Shell Games'

09.09.2011

, a professor at Griffith University in Brisbane, Australia, illustrates the ease with which an individual can open a shell corporation. For his research for "Shopping for Anonymous Shell Companies," Sharman contacted 54 companies that claimed to provide administration services for shell companies; 45 provided valid responses and said that they did provide these services.

Of those, 28 required official identification. None of the U.S. companies required this, and just four of 13 providers in other OECD countries did. On the other hand, "Attempts to incorporate anonymously with providers in the Bahamas, the British Virgin Islands, the Cayman Islands, Dominica, Nauru, Panama, and the Seychelles all met with failure," Sharman wrote.

While noting that the small size of his study may limit the finding's applicability, Sharman concludes, "these findings cast strong doubt on the proposition that the problem of financial opacity is caused by palm-fringed tropical islands, rather than large high-income economies like the United States and Britain."

The bill has gained a fair number of supporters, including both law enforcement organizations and some small business groups.

However, this is the third time that a version of this bill has been brought forward in the Senate; the two previous bills went nowhere.