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FinCEN Starts Accepting Beneficial Ownership Reports Under Corporate Transparency Law

S.J. Steinhardt
Published Date:
Jan 3, 2024

GettyImages-1134157197 Treasury Department Building

The U.S. Treasury Department's Financial Crimes Enforcement Network (FinCEN) started accepting beneficial ownership information (BOI) reports at a new online registry that opened on Jan. 1, in accordance with the requirements of the Corporate Transparency Act, Accounting Today reported.

Aiming to deter money laundering, corruption and other forms of criminal activity by shell companies, the 2021 law requires companies to disclose who actually owns or controls them. Existing companies will have one year to file, while companies created or registered after Jan. 1 will be required to file within 90 calendar days of their creation or registration.

According to FinCEN's FAQs, a beneficial owner is any individual who directly or indirectly exercises "substantial control" over a reporting company, or who directly or indirectly owns or controls 25 percent or more of the "ownership interests" of a reporting company. Failure to file a report can result in civil or criminal penalties. 

"The launch of the United States' beneficial ownership registry marks a historic step forward to protect our economic and national security," said Treasury Secretary Janet Yellen in a statement. "Corporate anonymity enables money laundering, drug trafficking, terrorism and corruption. It harms American citizens and puts law-abiding small businesses at a disadvantage. Having a centralized database of beneficial ownership information will eliminate critical vulnerabilities in our financial system and allow us to tackle the scourge of illicit finance enabled by opaque corporate structures."

Last month, a group of 80 members of Congress sent a letter to FinCEN urging it to delay the start of the new rule. On Dec. 12, before the congressional recess, the House passed a bipartisan bill called the Protect Small Business and Prevent Illicit Financial Activity Act to delay the start of the rule by one year, Accounting Today reported. The AICPA supported that legislation. The Senate received the legislation on Dec. 13 and referred it to the Committee on Banking, Housing and Urban Affairs.

To become familiar with the guidance for addressing anti-money laundering compliance challenges, attend the Foundation for Accounting Education's Anti-Money Laundering Conference on June 4.

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