US FinCEN Issues Final Rule for Beneficial Ownership Reporting

On 29th September 2022, the U.S. Department of the Treasury’s Financial Crimes Enforcement Network (FinCEN) has issued a final rule, as required by the Corporate Transparency Act 2019, establishing an information-reporting regime for beneficial ownership.

The rule will come into force on January 1 2024, with entities already in existence before that date having one year to file their reports and those created or registered after that date will have 30 days to comply.

The provision will affect:

  • Domestic companies created by a filing with a secretary of state or similar office;
  • Foreign companies that are registered to do business in any US State through the filing of a document with a secretary of state or similar office.

These will include LLCs, most LLPs and LLLPs, LPs and business trusts, with the consequence that such entities will have to disclose information on their owners or persons with significant control.

This rule was introduced with the aim to address the concerns raised by the Financial Action Task Force (FATF) which lately identifies deficiencies in the US anti-money laundering (AML) regime, with particular reference to the misuse of certain entities for criminal and illicit purposes.

The infrastructure to manage these requirements still has to be ultimated, as FinCEN will have to issue further rulemaking to determine who will have access to the registered information and which measures will be enacted to ensure the safe management of the data.