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Those seeking to create a completely anonymous shell company can often do so entirely online, within a few hours or less and with less documentation than it takes to obtain a library card.

Few people would imagine Delaware or Wyoming as potentially key players in the world of international crime and terror. But as a result of some of the most permissive corporate legal codes in the world, that appears to be a strong possibility.

When people want to form a corporation or an LLC, they contact a corporate service provider — often a law firm or a stand-alone enterprise whose main business is to create companies for others. In more than 180 countries, international standards dictate that these providers require customers to furnish notarized photo ID. Ironically, although the U.S. pushed the rest of the world to adopt these standards, U.S.-based incorporation providers almost never follow them. In many states, incorporation providers brag about the level of privacy that they can offer their clients. Those seeking to create a completely anonymous shell company can often do so entirely online, within a few hours or less and with less documentation than it takes to obtain a library card.

This status quo is dangerous. Criminals can easily exploit weaknesses in U.S. law to obtain an anonymous corporation. Once they have these shell companies, they can use them to conduct what they claim are “business transactions” while, in reality, they move and conceal the profits that they receive from crime and corruption. Our laws undermine our safety. Our system may enable banks to provide services to nameless, faceless companies while law enforcement agencies have practically no available means to pursue criminal activity beyond the anonymous shells.

As researchers, we wanted to know just how easy it might be for suspect characters to create a front for their crime, corruption or even terrorism. Posing as 21 different consultancy firms spread throughout the world, we sent 7,400 emails to incorporation providers in 181 countries. The results were alarming: of all countries contacted, incorporation services in the United States made our country second only to Kenya as the easiest jurisdiction for obtaining an illegal, untraceable shell company.

Consider an appalling response we received from Florida, where a shady corporate service provider named a price to look the other way after acknowledging clear red flags for potential terrorism. Even more unnerving is the fact that such blatant noncompliance with international law is not limited to one or two states. We received similar responses from corporate service providers in Montana, Alabama, Nevada, and Delaware, among many others.

Since the publication of our findings, the EU, the UK, New Zealand and the British Virgin Islands have all amended their laws to make it harder to obtain an anonymous shell company. Similar legislation has been introduced in both the U.S. Senate and the U.S. House of Representatives. If passed, the Corporate Transparency Act of 2017 (S. 1717, H.R. 3089) will create a registry of company owners that U.S. law enforcement can use to find and punish those seeking to exploit our current corporate finance system.

The cost of this change is low; those forming companies for legitimate reasons will still be able to obtain them quickly and with relative privacy. The stakes, however, are very high. Illegal acts thrive on anonymity, and allowing anyone to create a shell company with little documentation allows criminals to hide behind a veil of legitimacy. Passing this bill is an integral step toward the U.S. fulfilling its potential as a leading global combatant of corruption, terror and other forms of international venality.

Daniel Nielson is a professor of political science at Brigham Young University. His findings co-authored with Michael Findley and Jason Sharman regarding shell companies are summarized at globalshellgames.com. Eliza Riley and George González are research assistants in the Department of Political Science at Brigham Young University.