Figuring out who owns these shell companies has been a long-running challenge. The release of the Panama Papers in 2016 showed that a Panamanian law firm had helped to hide the flow of money worldwide by setting up thousands of shell companies under the laws in Delaware, Nevada and Wyoming. As far back as 2006, the Senate Permanent Subcommittee on Investigations held a hearing on how the failure to identify the owners of shell companies impeded efforts to combat money laundering and foreign corruption.
But the new rules will increase compliance costs for financial companies. Tougher requirements to combat money laundering have proved to be a thorn in the side of banks, and failure to follow the rules has triggered numerous enforcement actions in recent years. They have ranged from HSBC’s $1.3 billion settlement with the Justice Department in 2012 to recent regulatory