Reporting of beneficial ownership outlined

(Dec. 10, 2021) A proposed rule designed to “protect the U.S. financial system from illicit use” by addressing who must report corporate beneficial ownership information – including what and when – was unveiled this week by FinCEN.

According to the agency, collecting the information and providing access to law enforcement, financial institutions, and other authorized users will “diminish the ability of malign actors to hide, move, and enjoy the proceeds of illicit activities.”

The proposal implements the beneficial ownership information reporting provisions of the Corporate Transparency Act (CTA). FinCEN said it is taking aggressive aim at “those who would exploit anonymous shell corporations, front companies, and other loopholes to launder the proceeds of crimes, such as corruption, drug and arms trafficking, or terrorist financing.”

The CTA was part of the Anti-Money Laundering Act of 2020, FinCEN said. It established beneficial ownership information reporting requirements for certain types of corporations, limited liability companies, and other similar entities created in or registered to do business in the United States. The proposed rule implements these reporting requirements, the agency noted.

Comments are due in 60 days after the proposal’s publication in the Federal Register.


FinCEN Issues Proposed Rule for Beneficial Ownership Reporting to Counter Illicit Finance and Increase Transparency