A non-partisan alliance of more than 100 US and international organisations working toward a fair tax system has “applauded” the proposal by the US treasury department’s Financial Crimes Enforcement Network (FinCEN) for revised rules on beneficial ownership information reporting requirements (Trade-based Financial Crime, 30 December 2021).
The positive response from the Financial Accountability and Corporate Transparency (FACT) Coalition contrasts with the response from the American Bankers Association (ABA) which said the proposal was “difficult to assess” while implementing it would be a “major undertaking” that will divert bank resources (Trade-based Financial Crime, 11 February 2022).
Advocates for small businesses meanwhile have also criticised the burdens complying with its requirements would place on companies.
The FACT Coalition submitted detailed comments on the proposed rules that specify the types of information corporations and other covered entities must provide to FinCEN to reveal their true, beneficial owners.
The coalition said the treasury department’s action shows that the US is serious in addressing its role in global money laundering and corruption.
“We commend FinCEN for creating a strong rule that will help tackle corruption and money laundering…[it] represents an historic opportunity to curtail the misuse of anonymous entities for illicit purposes by increasing beneficial ownership transparency,” executive director of the FACT Coalition, Ian Gary, said.
The coalition said the draft rule has attracted strong support from law enforcement groups, small business associations, human rights activists, and other organisations but nevertheless offered several proposals in its submission.
These included a suggestion that FinCEN revise an exemption for subsidiaries to ensure that the exemption applies only to subsidiaries that are wholly controlled or wholly owned by a specified exempt entity.
The FACT Coalition also suggested the new rules should make certain that “FinCEN identifier” provisions improve database efficiency and minimise reporting burdens. It also wanted clarification that the beneficial ownership registry will deploy real-time and automated verification mechanisms to ensure that certain submitted data are consistent with other government held records.
A more detailed overview of the FACT Coalition’s response to the US treasury department’s draft proposals on beneficial ownership reporting requirements can be found here.
The FACT Coalition comments to FinCEN on the US treasury department’s draft proposals on beneficial ownership reporting requirements can be found here.
Categories: Trade Based Financial crimes News