To protect the U.S. financial system from malicious actors abusing legal entities, including shell companies, to hide dubious proceeds or money laundering, the Financial Crimes Enforcement Network (FinCEN) has created provisions for compliance with the Corporate Transparency Act (CTA) to allow certain U.S. state agencies and departments access to beneficial ownership information.
On September 29, 2022, FinCEN issued the Final Rule establishing a reporting requirement called BOI of beneficial ownership information pursuant to the CTA (Corporate Transparency Act), where it requires corporations, limited liability companies (LLCs), and other entities created or registered to do business in the United States to report information about their beneficial owners who are individuals owning at least 25% of an entity’s interest.
This regulation becomes effective on January 1, 2024.
FinCEN is authorized to disclose BOI in certain circumstances to six types of requesters:
– U.S. federal agencies involved in national security, intelligence, and law enforcement activities.
– State, local, and tribal law enforcement agencies with judicial clearance
– The U.S. Department of the Treasury
– Financial institutions use beneficial ownership information to conduct legally required customer due diligence, provided the financial institutions have the customer’s consent to retrieve the data.
– Federal and state regulators that evaluate financial institutions for compliance with legally required customer due diligence obligations.
– Foreign law enforcement agencies and certain other foreign authorities that submit qualified requests for information through a U.S. federal agency.
The BOI report requires four pieces of information about each beneficiary: name, date of birth, address, and identification number.
Some official links to FinCEN’s BOI report website are:
– Beneficial Ownership Report: Key Questions
– Beneficial Ownership Report: Report Dates
– Informative Video: Beneficial Ownership Report
At ACMM Consulting, we are already working with our clients to comply with this new regulation. If you need our assistance, please do not hesitate to contact us.