On December 8, 2021, the Financial Crimes Enforcement Network (FinCEN) proposed regulations to require certain entities to file reports with FinCEN that identify two categories of individuals:
- The beneficial owners of the entity; and
- Individuals who have filed an application with specified governmental authorities to form the entity or register it to do business.
The proposed regulations would implement Section 6403 of the Corporate Transparency Act (CTA), enacted into law as part of the National Defense Authorization Act for Fiscal Year 2021 (NDAA), and describe who must file a report, what information must be provided, and when a report is due.
- Requiring entities to submit beneficial ownership and company applicant information to FinCEN is intended to help prevent and combat money laundering, terrorist financing, tax fraud, and other illicit activity.
- Once finalized, these proposed regulations will affect a large number of entities doing business in the United States.
This document also invites comments from the public regarding all aspects of the proposed regulations as well as comments in response to specific questions. Written comments on this proposed rule may be submitted on or before February 7, 2022.
FinCEN will engage in additional rulemakings to:
- Establish rules for who may access beneficial ownership information, for what purposes, and what safeguards will be required to ensure that the information is secured and protected; and
- Revise FinCEN’s customer due diligence rule following the promulgation of the BOI reporting final rule.
FinCEN is also developing the infrastructure to administer these requirements, such as the beneficial ownership information technology system.