As the official overseeing the U.S. government’s efforts to track terrorist and illicit money flows, I’m often asked about the novel or obscure ways that criminals or terrorists move money. In the years after the 9/11 attacks, questions often focused on hawala transfers. Today, people ask me about virtual currencies like bitcoin and the dark net.

But there is a money laundering method that is less exotic yet every bit as dangerous: shell companies incorporated in the United States.

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It does not need to be this way. Congress could close this loophole by passing a simple, two-page law requiring the beneficial owner of a company to be identified whenever a U.S. company is formed. Treasury submitted a legislative proposal to Congress last month that provides a framework for closing this loophole once and for all.

With every threat that we track, be it foreign terrorists, narcotics cartels, sanctioned regimes or cyber hackers, our investigators encounter American shell companies used to hide and move money. Consider the notorious arms dealer Viktor Bout, the alleged model for the movie “Lord of War,” who sold weapons to butchers and terrorists from Africa to the Balkans. Bout didn’t move his arms here, but this Soviet arms merchant moved his blood money through companies established in Florida, Texas and Delaware. A loophole in our financial system allowed for this secrecy, and it took years to uncover the full money trail.

Delaware is well-known for its incorporation businesses, but it’s no worse than any other state in this regard. With about $100 and 20 minutes, you can go to a U.S. state’s website and form a company without disclosing the name of the person who will own or control it. Professional incorporation agents set up hundreds or even thousands of these companies and then sell them, in some cases to those looking to move money surreptitiously. Criminals have learned that American companies have an easier time obtaining bank accounts, and so they incorporate here in large numbers. The result is that our financial investigators often come across U.S. shell companies in their money hunts — and that may be where the trail ends.

Anonymity isn’t sold by a back-alley check casher or hawaladar in these cases; it’s provided in the open by state incorporation offices. This gives U.S. shell companies the dubious distinction of being the only money laundering method where secrecy is provided by a government entity.

Stopping terrorist financing and money laundering are bipartisan issues, and Congress’s support for the work of my office is broad and deep. But when legislators have tried over the years to pass laws similar to the one recently proposed by Treasury, interested stakeholders have defeated the bills every time. This is simply unacceptable.

In the meantime, to mitigate the threat, the Treasury Department issued a rule that will require U.S. banks opening accounts for a company to obtain and verify the identity of the company’s beneficial owner. That will help with companies that choose to bank here, but it won’t stop criminals who use U.S. front and shell companies to open bank accounts abroad. And the burden for disclosing the true owners of companies should fall primarily on those incorporating the companies in the first place. To set this right will take an act of Congress.

In most respects, the U.S. is the envy of the world when it comes to our anti-money laundering system. By fixing our shell company problem, Congress would close a loophole that has allowed billions of dollars to flow with anonymity and safeguard the reputation of the United States as the best and safest place to do business on Earth.

Szubin is acting undersecretary for terrorism and financial intelligence at the Department of the Treasury.