The US treasury department’s Financial Crimes Enforcement Network (FinCEN) has issued a proposed rule on beneficial ownership information reporting requirements that would implement key provisions of the Corporate Transparency Act, which was enacted earlier this year as part of the Anti-Money Laundering Act of 2020.

These laws are expected to precipitate substantial revisions to the US’ anti-money laundering and counter financing of terrorism (AML/CFT) compliance framework.

Outline and purpose

The proposed rule describes who must file a beneficial ownership information (BOI) report, what information must be reported, and when a report is due.

It specifically requires reporting companies 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 tribal authorities to form the entity or register it to do business.

The notice of proposed rulemaking aims to help stop bad actors from using legal entities to hide illicit funds behind anonymous shell companies or other opaque corporate structures.

Timing

Under the proposed rule, domestic reporting companies created before the effective date of the final regulation would have a year to file their initial BOI reports while reporting companies created or registered after the effective date would have 14 days after their formation to file. The same deadlines would apply to existing and newly registered foreign reporting companies.

Reporting companies would have 30 days to file updates to their previously filed reports, and 14 days to correct inaccurate reports after they discover or should have discovered the reported information is inaccurate.

FinCEN’s Proposed rule on beneficial ownership information reporting requirements can be found here.

Categories: Trade Based Financial crimes News

Tags: AML/CFT, anti-money laundering, beneficial owners, BOI, Corporate Transparency Act, counter financing of terrorism, FinCEN, report