The Financial Crimes Enforcement Network (FinCEN) has issued a Notice of Proposed Rulemaking (NPRM) regarding beneficial ownership information reporting provisions via the Corporate Transparency Act (CTA).
The proposed rule is designed to shield the nation’s financial system from illicit use while impeding potential perpetrators from abusing legal entities.
“FinCEN is taking aggressive aim at those who would exploit anonymous shell corporations, front companies, and other loopholes to launder the proceeds of crimes, such as corruption, drug, and arms trafficking, or terrorist financing,” Acting FinCEN Director Himamauli Das said.
NPRM will be accepted for 60 days following publication in the Federal Register. The proposed guidance outlines who must report beneficial ownership information, when they must report and what information they must provide.
The process of gathering the information and providing access to law enforcement, financial institutions, and other users decreases the ability of offenders to benefit from the proceeds of illicit activities.
The CTA established beneficial ownership information reporting requirements for certain types of corporations, limited liability companies, and other similar entities created in or registered to conduct business domestically.
The proposed rule represents prior bipartisan efforts by Congress, the Treasury, national security agencies, and law enforcement to enhance the nation’s corporate transparency dynamic.