On December 16, 2022, the Financial Crimes Enforcement Network (FinCEN) published in the Federal Register the preliminary rules to implement the beneficial ownership information (BOI) access and safeguard provisions of the U.S. Corporate Transparency Act (CTA). The CTA was enacted on January 1, 2021. The new reporting regime will require certain domestic and foreign entities to report on their beneficial ownership.
Rulemaking Plan
FinCEN previously announced three stages of rulemaking to implement the CTA:
Implement the beneficial owner information (BOI) reporting requirements.
BOI Reporting Rule was finalized on September 30, 2022.
Implement the CTA’s protocols for access to and disclosure of BOI.
Written comments on the proposed rule may be submitted on or before February 14, 2023.
The proposed rule also includes amendments to the final reporting rule to specify when reporting companies may report FinCEN identifiers associated with entities.
Revise the existing Customer Due Diligence (CDD) Rule.
This will be implemented no later than one year after the effective date of the BOI Reporting Rule (January 1, 2024).
Proposed Access & Disclosure Rule
The proposed rule establishes the protection standards and access parameters for the non-public database. FinCEN proposes to subject each category of authorized recipients to security and confidentiality protocols that align with the scope of the access and use provisions. FinCEN proposes sharing BOI in the following scenarios:
Federal agencies: when acting in furtherance of national security, intelligence, or law enforcement activity.
State, local, and Tribal law enforcement agencies: after receiving authorization from a court of competent jurisdiction as part of a criminal or civil investigation.
Financial institutions: to facilitate compliance with customer due diligence requirements under applicable law, with the consent of the reporting company.
Financial institution’s regulator: BOI that has been provided to a regulated financial institution for the purpose of performing regulatory oversight that is specific to that financial institution.
Foreign government: foreign law enforcement agencies, prosecutors, and judges in specified circumstances.
U.S. agencies: that meet specific criteria.
U.S. Treasury officers and employees: under certain circumstances.
Link to Proposed Rule
The official 54 page version of the proposed Beneficial Ownership Information Access and Safeguards, and Use of FinCEN Identifiers for Entities can be downloaded using this link.
FinCEN released a Beneficial Ownership Information Access and Safeguards Notice of Proposed Rulemaking Fact Sheet providing an overview of the proposed rule.
FinCEN CTA Resources
On December 6, 2022, FinCEN Acting Director Himamauli Das spoke at the ABA/ABA Financial Crimes Enforcement Conference. He stated FinCEN is developing Frequently Asked Questions (FAQs) to address beneficial ownership issues and is working on a Small Business Compliance Guide to inform small businesses about their responsibilities under the beneficial ownership rules. Once the guidance materials are issued, they will be available on the new beneficial ownership page on FinCEN’s website.
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