The Financial Crimes Enforcement Network (FINCEN) on March 21, 2025, announced that it has issued an interim final rule that eliminates the requirement for U.S. companies and persons to report their beneficial ownership information (BOI) as still required by the Corporate Transparency Act (CTA). This means, however, that non-U.S. companies with certain contacts to the U.S. will still have to file the BOI report, though these companies need not report the beneficial ownership of U.S. equity owners and those U.S. equity owners of foreign companies are no longer required to file a separate report.
The CTA allowed the Treasury Department (of which FINCEN is a part) to exempt certain classes of entities for which the Secretary of Treasury had determined that their reporting would not be helpful in meeting the goals of the CTA to fight money laundering, terrorism financing and other ills. The caveat is that the Secretary of Treasury must secure the written concurrence of the U.S. Attorney General and Secretary of Homeland Security, which of course is largely pro forma since they are all part of the same administration.
The bottom line here is that FINCEN is washing its hands of this mess until Congress takes further action to either amend the CTA or to take some other action to force a broader enforcement of that statute. This is not particularly surprising because the previous FINCEN regulations of the previous administration were arguably overbroad and required reporting for various entities that were unlikely to be involved in financial crimes (my favorite example is homeowner associations) or for which the Treasury Department already basically had the BOI information through tax filings (such as the form K-1) and thus another filing was redundant.
On the other hand, one must wonder whether the Treasury Department has now gone too far the other way since there is little doubt that domestic entities of various types are indeed widely used for money laundering and other elicit activities. Somewhere there is a happy medium to be found between the overbroad rules of the previous administration and the complete absence of rules for domestic companies that the present administration has now adopted. Whether this Congress can modify the CTA to better direct Treasury along a more middle road will likely be an interesting issue, but don’t expect it to happen quickly if at all under the current political climate.
Note that the U.S. is under some international pressure to adopt greater transparency rules for entities under the guidance of various international bodies in which the U.S. has long participated, such as the Financial Action Task Force (FATF). Other nation-participants in the FATF maintain databases of their companies and the beneficial owners thereof to which U.S. law enforcement and intelligence agencies currently have access, and they probably do not want to lose that access through non-compliance by the U.S. with the FATF’s directives. So, while this is an interim rule by Treasury, it is probably unlikely in the long term that domestic companies will totally escape FINCEN reporting requirements.
Again, the devil is in the details. But for now, domestic companies and persons can quit worrying about it.
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