Today, the U.S. Department of the Treasury’s Financial Crimes Enforcement Network (FinCEN) announced a crucial advancement in combating illicit finance and bolstering corporate transparency. A final rule has been issued, outlining the framework for access to and safeguarding of beneficial ownership information (BOI) in line with the bipartisan Corporate Transparency Act (CTA). The rule dictates the conditions under which BOI, compliant with FinCEN’s September 30, 2022, final BOI Reporting Rule, may be disclosed to federal agencies, state, local, tribal, and foreign governments, as well as financial institutions, and specifies measures for its protection.
FinCEN Director Andrea Gacki highlighted the rule’s significance in fortifying the financial system and combating various criminal activities facilitated by anonymous shell companies, including money laundering, corruption, sanctions and tax evasion, drug trafficking, and fraud.
This final rule represents the second of three planned rulemakings to implement the CTA. The first, the BOI Reporting Rule, mandates certain entities to report beneficial ownership information to FinCEN, with reporting requirements taking effect on January 1, 2024. Concurrently, FinCEN will launch its beneficial ownership information technology system on the same day. A third rulemaking will revise FinCEN’s Customer Due Diligence rule, as mandated by the CTA.
Effective February 20, 2024, the final rule on access to BOI will be implemented. From 2024 onward, FinCEN will gradually provide access to BOI to authorized government agencies and compliant financial institutions, marking a crucial step in strengthening financial safeguards.
By FCCT Editorial Team
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