On December 7, 2021, the Financial Crimes Enforcement Network (FinCEN) issued a Notice of Proposed Rulemaking that would require certain companies to report beneficial ownership information (BOI) to FinCEN and provide timely access of BOI to law enforcement, financial institutions and others authorities in an effort to combat corruption, money laundering, terrorist financing, and other financial crimes. This action is part of the Treasury Department’s strategy to combat corruption by preventing corrupt actors, criminals, and terrorists from remaining anonymous in the event that they engage in illegal activity through legal entities in the US. The BOI reporting provisions are being implemented by FinCEN under the Corporate Transparency Act, which was enacted as part of the Anti-Money Laundering Act of 2020 within the National Defense Authorization Act for Fiscal Year 2021.
According to FinCEN, the proposed rule would apply to certain corporations, limited liability companies and similar entities that are formed or registered to do business in the US. FinCEN proposes that all reporting companies be required to identify two categories of individuals – the company’s beneficial owners and company applicants who are the individuals that filed the applications related to the entity’s formation or its registration to do business. FinCEN also recommends that these requirements apply to both foreign and domestic companies that are registered to do business in the US.
Under the proposed rule, reporting companies would be required to provide the following information from each of its beneficial owners and company applicants: name, birthdate, address and a unique identifying number from an acceptable form of identification. According to FinCEN, both domestic and foreign companies would have 14 days after their formation or registration to file their BOI report with FinCEN, and all companies created or registered before the effective date would be given a year to file their initial reports.
The public has 60 days, or until February 7, 2022, to review and comment on the proposed rule. FinCEN strongly encourages all parties that might be affected by the proposed rule to submit written comments for consideration before the deadline.