Many in the business community celebrated the sudden March announcement that US-based companies would be exempt from reporting under the Corporate Transparency Act. But Jamie A. Schafer of Perkins Coie offers a different perspective: FinCEN could instead make tweaks — rather than wholesale changes — that could help the US maintain its progress on preventing money laundering and other financial crimes.
Business owners and general counsel across the US — and beyond — breathed a sigh of relief when the FinCEN in March exempted all US companies and persons from beneficial ownership information reporting requirements under the Corporate Transparency Act (CTA).
Enacted in 2021 to combat anonymous shell companies and illicit money flows, the CTA requires millions of companies to report their beneficial ownership details, or BOI, to FinCEN. FinCEN’s analysis estimated that the costs across filing entities could total $3.3 billion annually. The CTA also raises conflicting interests between personal privacy and national security, imposing a byzantine reporting scheme that leaves entities with complex ownership structures often struggling to understand who, what, when, how and why they are required to report. For many, the rollout of the CTA over the past year and a half has been an unmitigated mess.
Yet…
