WASHINGTON: The United States needs to do more to crack down on criminal front companies that are undermining the integrity of the nation’s financial system, a senior Treasury official said on Monday.

“Criminals continue to make their way into our financial system,” David Cohen, the Treasury’s undersecretary for terrorism and financial intelligence, told an anti-money laundering conference in Washington.

Criminals remain able to open bank accounts in the names of shell and front companies and never have to reveal who ultimately would benefit from their illicit activities, Cohen said at the event sponsored by the American Bankers Association and the American Bar Association.

“With other countries taking steps to prevent the abuse of shell companies in their jurisdictions, it is simply untenable for the United States to allow this risk to go unaddressed,” he said, according to prepared remarks.

The legal maneuver, which the eastern US state of Delaware has made a specialty, was notably used by Russian arms trafficker Viktor Bout, dubbed the “Merchant of Death”, to hide the criminal origins of his profits.

Cohen said that addressing this issue remained a high priority of President Barack Obama’s administration, which proposed legislation in March that would require newly formed legal companies to provide the Internal Revenue Service with information on the companies’ beneficial owners.

Published in Dawn, November 11th, 2014