On September 29, 2022, the Financial Crimes Enforcement Network (FinCEN) issued a final rule to implement Section 6403 of the Corporate Transparency Act (CTA) and require certain entities to file reports with FinCEN identifying and providing information about their beneficial owners and applicants (Final Rule).1 FinCEN previously issued a notice of proposed rulemaking on the topic in December 2021 (NPRM).2 The Final Rule adopts the concepts from the NPRM largely as proposed but with certain modifications that are responsive to comments received by FinCEN and intended to minimize unnecessary burdens on reporting companies. This unprecedented collection of information by the federal government is intended to curtail the deliberate misuse of legal entities and deter illicit financial activity and national security threats that result therefrom.
- The practical result of the Final Rule is that any company created or registered in the United States that is not already subject to federal or state regulation, otherwise required to disclose its beneficial ownership information to a government authority, or not otherwise exempt will be required to report such information to FinCEN.
- The Final Rule requires each reporting company to file with FinCEN reports with information on the reporting company itself, every individual who is a beneficial owner of such reporting company, and every individual who is a company applicant with respect to such reporting company.
- The Final Rule requires companies in existence before January 1, 2024, to file a report no later than January 1, 2025, and companies that are formed or registered, as applicable, on or after January 1, 2024, to file a report within 30 days of the date on which the formation or registration becomes effective under applicable law.
- The Final Rule also requires a reporting company to update a report if there are changes concerning the reporting company or its beneficial owners and to correct inaccurately filed information.
Industry leaders around the world regularly rely on Sidley’s anti-money laundering (AML) team for legal and regulatory advice regarding compliance with domestic and international laws and regulations. We regularly counsel clients on a broad range of issues related to AML and combating the financing of terrorism (AML/CFT) compliance, as well as the economic sanctions regimes administered by the Office of Foreign Assets Control (OFAC). We also advise on the Bank Secrecy Act and the AML/CFT aspects of the USA PATRIOT Act, and provide advice on the role of blockchain in AML to leading U.S. and global financial institutions.
If you have questions regarding this Update, please contact the Sidley lawyer with whom you work, or a member of our AML team:
- Banking Regulatory
- Joel D. Feinberg, firstname.lastname@example.org
- Rachpal K. Thind, email@example.com
- Michael D. Lewis, firstname.lastname@example.org
- Stanley J. Boris, email@example.com
- Cybersecurity, FinTech, and Cryptocurrency
- David E. Teitelbaum, firstname.lastname@example.org
- Lilya Tessler, email@example.com
- Kristin S. Teager, firstname.lastname@example.org
- Corporate Finance
- David C. Buck, email@example.com
- Compliance, Investigations, and Enforcement
- Timothy J. Treanor, firstname.lastname@example.org
- Colleen M. Lauerman, email@example.com
- Michael D. Mann, firstname.lastname@example.org
- Brian P. Morrissey, email@example.com
- Doreen M. Rachal, firstname.lastname@example.org
- Alexa Poletto, email@example.com
- Brian C. Earl, firstname.lastname@example.org
- Securities Enforcement and Regulatory
- Paul M. Tyrrell, email@example.com
- Sara George, firstname.lastname@example.org
Sidley Austin LLP provides this information as a service to clients and other friends for educational purposes only. It should not be construed or relied on as legal advice or to create a lawyer-client relationship. Readers should not act upon this information without seeking advice from professional advisers.
Attorney Advertising—Sidley Austin LLP, One South Dearborn, Chicago, IL 60603. +1 312 853 7000. Sidley and Sidley Austin refer to Sidley Austin LLP and affiliated partnerships, as explained at www.sidley.com/disclaimer.
© Sidley Austin LLP