On December 8, the Financial Crimes Enforcement Network (“FinCEN”), within the U.S. Department of the Treasury, published proposed regulations, Beneficial Ownership Information Reporting Requirements (the “Proposed Rule”),1 to implement the beneficial ownership information reporting provisions of the Corporate Transparency Act (“CTA”).
The CTA, enacted as part of the Anti-Money Laundering Act of 2020, is intended to expand and modernize the U.S. government’s ability to collect beneficial ownership information (“BOI”) to deter money laundering, corruption, tax evasion and fraud, and other financial crime. The CTA requires FinCEN to, inter alia, (1) implement rules for the reporting of BOI of legal entities organized or registered to conduct business in the United States; (2) develop protocols for access to, and the sharing of, reported BOI; and (3) amend the current Customer Due Diligence (“CDD”) Rule applicable to financial institutions to account for the new requirements of the CTA. The Proposed Rule addresses only the reporting of BOI, with the remaining requirements to be addressed through future rulemaking.
The Proposed Rule would require “reporting companies” to file reports with FinCEN that (1) identify themselves; and (2) provide BOI of their “beneficial owners” and “company applicants,” each as discussed in greater detail below. FinCEN has solicited further public comment on the Proposed Rule until February 7, 2022, but there is currently no firm timeline for final implementation.
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