The Director of the Delaware Division of Corporations is working to identify corporate shell entities tied to illegal activity, such as money laundering.
Delaware LLCs have been mentioned in coverage of drug cartels and most recently activities of former Trump campaign chief Paul Manifort, with one legislator pushing for added disclosure.
“The Department of State works in close cooperation with law enforcement authorities at all levels when it comes to identifying bad actors and bringing them to justice. The U.S. Treasury’s Office of Foreign Assets Control is a key partner in those efforts,” stated Kris Knight, deputy secretary of state and director of the Division of Corporations.
“Delaware’s registered agent community plays a big part in preventing OFAC-sanctioned persons and entities from domiciling here. The biggest registered agent firms, representing 70-80 percent of all Delaware business entities, regularly check their client lists against the OFAC list to ensure compliance,” Knight stated. “The Department of State historically has advised Delaware registered agents to adhere to these best practices and consult the OFAC list with regularity. In order to ensure consistency among registered agents large and small, the Department will issue a formal directive to all Commercial Registered Agents (those who represent 50 or more entities) to check the OFAC list at least quarterly. The Department of State will run quarterly OFAC checks for the approximately 40,000 entities not represented by a CRA.”
The News Journal reported last week that state had tweaked its stance toward LLCs, a revelation the newspaper claimed came out of a Freedom of Information request.
State Rep. John Kowalko, D-Newark, has pushed for legislation that would require that state to require more disclosure of the activities of LLCs.
So far, his efforts have gone nowhere, with Delaware suggesting national legislation on disclosure. Otherwise, LLCs would simply move their state of incorporation to South Dakota, Nevada or other jurisdictions, the state claims.
