Protect Small Business and Prevent Illicit Financial Activity Act

Floor Speech

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Mr. NUNN of Iowa. Mr. Speaker, I move to suspend the rules and pass the bill (H.R. 5119) to amend title 31, United States Code, to provide small businesses with additional time to file beneficial ownership information, and for other purposes, as amended.

The Clerk read the title of the bill.

The text of the bill is as follows: H.R. 5119

Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled, SECTION 1. SHORT TITLE.

This Act may be cited as the ``Protect Small Business and Prevent Illicit Financial Activity Act''. SEC. 2. BENEFICIAL OWNERSHIP INFORMATION REPORTING DEADLINES FOR SMALL BUSINESSES.

Section 5336(b)(1) of title 31, United States Code, is amended--

(1) in subparagraph (B)--

(A) by inserting ``(but which may not adjust the report submission deadline)'' after ``Treasury''; and

(B) by striking ``in a timely manner, and'';

(2) in subparagraph (C)--

(A) by inserting ``(but which may not adjust the report submission deadline)'' after ``Treasury''; and

(B) by striking ``at the time of'' and inserting ``not later than 90 days after the date of such'';

(3) in subparagraph (D)--

(A) by inserting ``(but which may not adjust the report submission deadline)'' after ``Treasury''; and

(B) by striking ``in a timely manner, and not later than 1 year'' and inserting ``not later than 90 days''; and

(4) by adding at the end the following:

``(H) Unable to obtain.--FinCEN may not by rule, guidance, or otherwise, permit a reporting company from submitting a report relating to the inability of the reporting company to obtain or identify information in the alternative to submitting a report required under this subsection.''.

Mr. Speaker, American small businesses are the backbone of our economy. There are nearly 32.6 million small businesses operating in our country, and in my home State of Iowa, that makes up more than one- half of the businesses, those that are on Main Street in our hometown communities and right in the storefront where Americans shop and spend their time each week.

However, these small businesses are under attack from a Federal bureaucracy in D.C. trying to burden them in red tape, and alarmingly, also from our adversaries overseas, specifically Chinese Communist Party entities, that have infiltrated our country with shell companies that jeopardize our national security, violate our intellectual property laws, and hurt our economy both locally and globally.

Recent reports suggest that the Chinese Communist Party has more than 40,000 shell companies operating in the United States today. They use these companies to launder money, peddle drugs, and collect sensitive information on our people and our Nation. We cannot, we must not, and, today, we will not allow that to happen.

In 2020, Congress passed the Corporate Transparency Act to shut down these illegal shell companies, but, right now, foreign-owned entities use these shell companies and exploit a loophole in this law by checking a box on the required form claiming that they don't know who owns the company, which, of course, we all know--both Republican and Democrat--is completely absurd.

Once enacted, our bipartisan Protect Small Business and Prevent Illicit Financial Activity Act will finally close this loophole and will also reduce the burdensome red tape for the legitimate American businesses who are trying to do that which they have done so well for so long: serve our hometown communities.

First, these shell companies will no longer be able to exploit the system by selecting ``unable to obtain'' or ``unable to identify,'' basically saying that we don't know who owns us, when reporting their ownership information. By removing the option to basically claim absentia when it comes to ownership, we can crack down on the Chinese Communist Party's economic incursion into the United States.

Not only will this bipartisan bill help crack down on Communist China, it will also make it much easier for legitimate American small businesses to comply with the law, no longer putting them at a detriment to their overseas competitors.

Small businesses already face unique challenges in this economy: brutal inflation, a struggling supply chain, and a bureaucracy based right here in D.C. that is intent on burying them in red tape, making them do far more work than adversary-owned entities or what foreign- owned companies do right now. Not to mention most operate with limited resources, and that is on a good day.

This bill will reduce government-imposed burdens by ensuring small businesses have sufficient time to satisfy requests for information while the government fixes this egregious loophole.

The bottom line, Mr. Speaker, is that the passage of this legislation is a critical step forward by preventing our adversaries in the Chinese Communist Party from exploiting our laws and engaging in illicit activity and will also reduce the burden of red tape on new and existing small businesses.

In closing, I thank my colleague from Ohio (Mrs. Beatty), who is the Ranking Member of National Security, Illicit Finance, and International Financial Institutions Subcommittee, for helping champion this and being a co-lead on this important legislation, and I also thank my colleagues on the other side of the aisle.

Mr. Speaker, I urge my colleagues to support this bill, and I reserve the balance of my time.

First, I want to say thank you to Members on both sides of the aisle. The House Financial Services Committee has led strongly in making sure that the backbone of our economy, our small businesses, everyday Americans, and the economy of this country can remain stronger. With the passage of this bill we not only fight for the Main Street of America, but we also ask that those who would do business in the United States be held to the same standard.

As was highlighted by the gentlewoman from Texas, whether you are a terrorist entity, whether you are a laundering agency from overseas, or whether you are the Chinese Communist Party, no longer will you be part of this myriad of 40,000 entities trying to operate with impunity in the United States. We will hold you accountable. We will move forward to support those Americans who are doing it the right way, and, most importantly, we will stand strong for our national security.

Mr. Speaker, it is a privilege to move this bill on a bipartisan path with this House and the interests of the American people. I urge my colleagues to support this legislation which I am proud to lead, and I yield back the balance of my time.

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