FinCEN Issues Notice of Proposed New Beneficial Ownership Information Reporting Requirements Under the Corporate Transparency ActFebruary 4, 2022
The Financial Crimes Enforcement Network (“FinCEN”), a bureau of the United States Department of the Treasury, published a Notice of Proposed Rulemaking (the “Proposed Rules”) on December 8, 2021 in the Federal Register. The Proposed Rules would implement the requirements in the Corporate Transparency Act (“CTA”) that certain domestic and foreign entities submit beneficial ownership information and company applicant information to FinCEN.
The Proposed Rules would impose filing obligations on start-up companies, smaller operating businesses, holding companies and other entities that do not fit into one of the exemptions described below. These entities would need to file certain information with respect to beneficial owners and applicants (individuals who do the filings to form or register the entity).
The information that FinCEN will collect will be held in a non-public database and will be disclosed to certain government agencies for those purposes specified in the CTA as well as to financial institutions to assist them in meeting their customer due diligence requirements. The Proposed Rules are intended to “protect U.S. national security, provide critical information to law enforcement, and promote financial transparency and compliance.”
FinCEN intends to issue three sets of rules to fully implement the requirements of the CTA. The first set of rules – and the subject of this alert – will implement the beneficial ownership information reporting requirements for the applicable reporting companies, the second set of rules will implement the CTA’s protocols for access to, and disclosure of, the collected beneficial ownership information, and the third set of rules will revise the existing Customer Due Diligence rule to align it with the requirements of the CTA. FinCEN is only seeking comment on the first set of rules, which are due by February 7, 2022.
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