Yellen says 100,000 firms have joined a business database aimed at unmasking shell company owners

U.S. Secretary of the Treasury Janet Yellen speaks, Sept. 20, 2023, in New York. Yellen is announcing that 100,000 businesses have signed up for a new database that collects ownership information on firms intended to help unmask shell company owners. Yellen says the database will send the message that “the United States is not a haven for dirty money.” (AP Photo/Julia Nikhinson, File)

U.S. Treasury Secretary Janet Yellen tours the work area during a visit to the Financial Crimes Enforcement Network (FinCEN) in Vienna, Va., Monday, Jan. 8, 2024. Yellen announced that 100,000 businesses have joined a new database that collects "beneficial ownership" information on firms as part of a new government effort to unmask shell company owners. (AP Photo/Susan Walsh)

U.S. Treasury Secretary Janet Yellen tours the work area during a visit to the Financial Crimes Enforcement Network (FinCEN) in Vienna, Va., Monday, Jan. 8, 2024. Yellen announced that 100,000 businesses have joined a new database that collects "beneficial ownership" information on firms as part of a new government effort to unmask shell company owners. (AP Photo/Susan Walsh)

U.S. Treasury Secretary Janet Yellen tours the work area during a visit to the Financial Crimes Enforcement Network (FinCEN) in Vienna, Va., Monday, Jan. 8, 2024. Yellen announced that 100,000 businesses have joined a new database that collects "beneficial ownership" information on firms as part of a new government effort to unmask shell company owners. (AP Photo/Susan Walsh)

Treasury Secretary Janet Yellen, right, and Treasury Undersecretary for Terrorism and Financial Intelligence Brian Nelson, receive a briefing during a visit to the Financial Crimes Enforcement Network (FinCEN) in Vienna, Va., Monday, Jan. 8, 2024. Yellen announced that 100,000 businesses have joined a new database that collects "beneficial ownership" information on firms as part of a new government effort to unmask shell company owners. (AP Photo/Susan Walsh)

Treasury Secretary Janet Yellen asks a question during a visit to the Financial Crimes Enforcement Network (FinCEN) in Vienna, Va., Monday, Jan. 8, 2024. Yellen announced that 100,000 businesses have joined a new database that collects "beneficial ownership" information on firms as part of a new government effort to unmask shell company owners. (AP Photo/Susan Walsh)

Treasury Secretary Janet Yellen listens during a visit to the Financial Crimes Enforcement Network (FinCEN) in Vienna, Va., Monday, Jan. 8, 2024. Yellen announced that 100,000 businesses have joined a new database that collects "beneficial ownership" information on firms as part of a new government effort to unmask shell company owners. (AP Photo/Susan Walsh)

Treasury Secretary Janet Yellen, top right, and Treasury Undersecretary for Terrorism and Financial Intelligence Brian Nelson, left, receive a briefing during a visit to the Financial Crimes Enforcement Network (FinCEN) in Vienna, Va., Monday, Jan. 8, 2024. Yellen announced that 100,000 businesses have joined a new database that collects "beneficial ownership" information on firms as part of a new government effort to unmask shell company owners. (AP Photo/Susan Walsh)

Treasury Secretary Janet Yellen receives a briefing during a visit to the Financial Crimes Enforcement Network (FinCEN) in Vienna, Va., Monday, Jan. 8, 2024. Yellen announced that 100,000 businesses have joined a new database that collects "beneficial ownership" information on firms as part of a new government effort to unmask shell company owners. (AP Photo/Susan Walsh)

Treasury Secretary Janet Yellen listens during a visit to the Financial Crimes Enforcement Network (FinCEN) in Vienna, Va., Monday, Jan. 8, 2024. Yellen announced that 100,000 businesses have joined a new database that collects "beneficial ownership" information on firms as part of a new government effort to unmask shell company owners. (AP Photo/Susan Walsh)

Treasury Secretary Janet Yellen, right, and Treasury Undersecretary for Terrorism and Financial Intelligence Brian Nelson receive a briefing during a visit to the Financial Crimes Enforcement Network (FinCEN) in Vienna, Va., Monday, Jan. 8, 2024. Yellen announced that 100,000 businesses have joined a new database that collects "beneficial ownership" information on firms as part of a new government effort to unmask shell company owners. (AP Photo/Susan Walsh)

VIENNA, Va. (AP) — Treasury Secretary Janet Yellen announced that 100,000 businesses have joined a new database that collects “beneficial ownership” information on firms as part of a new government effort to unmask shell company owners.

Yellen said in remarks Monday that the new Treasury database that is collecting beneficial ownership information sends the message that "the United States is not a haven for dirty money.”

Yellen visited Treasury's Financial Crimes Enforcement Network — known as FinCEN— in Vienna, Virginia to discuss the launch of the database with the new year. She also spoke about upcoming real estate rules meant to increase transparency about the people and companies buying up property in the U.S.

The Virginia visit is meant to showcase the Biden administration's intent to increase corporate transparency and prevent the misuse of shell companies.

“Around the world, lack of transparency, specifically due to opaque corporate structures, makes it easier to conceal illicit activity," Yellen said during her visit to FinCEN headquarters. “Information on beneficial ownership will support our law enforcement colleagues in making arrests, prosecuting offenders, and seizing ill-gotten assets."

In 2021, the bipartisan Corporate Transparency Act was signed into law, giving Treasury the authority to write new rules on beneficial ownership. And as of Jan. 1, most U.S. firms must report identifying information about who directly or indirectly owns or controls them.

The rule requires most American businesses with fewer than 20 employees — roughly 32.6 million companies — to register with the government.

In November 2022, the National Small Business Association sued Treasury over the database and argued that the new reporting rule violates the U.S. Constitution, saying it is unduly burdensome on small firms, violates privacy and free speech protections and infringes on states’ powers to govern businesses.

A judge is expected to decide on the matter imminently.

Along with the business database, Yellen said Treasury is considering additional steps to address risks associated with commercial real estate.

Real estate is a commonly used vehicle for money laundering. Yellen said in March 2023 that illicit actors laundered at least $2.3 billion through U.S. real estate between 2015 and 2020.

A 2022 Congressional Research Service report suggested that Congress could consider how to balance money-laundering risks in the real estate sector against differing views on oversight.

“The benefits of increasing corporate transparency through gathering beneficial ownership information —put simply, knowing who owns what — start with protecting our national security,” Yellen said. “Corporate transparency can bring economic benefits as well: protecting our financial system, reducing due diligence costs, enabling fair business competition, and increasing tax revenue.”

FinCEN’s mission is to safeguard the financial system from criminal abuse, money laundering and other illicit activity, according to its website.