***NEW***

FinCEN has published an interim final rule (“IFR”) which takes U.S. reporting companies and U.S. persons out of scope of its beneficial ownership information reporting requirements. Some foreign entities which do not benefit from any exemptions will still have to make filings, but they will no longer have to report U.S. persons as beneficial owners and U.S. persons won’t have to report any beneficial ownership of those non-U.S. entities. It has also amended the deadlines for foreign reporting companies. These are:

• Reporting companies registered to do business in the United States before the date of publication of the IFR must file BOI reports no later than 30 days from that date.
• Reporting companies registered to do business in the United States on or after the date of publication of the IFR have 30 calendar days to file an initial BOI report after receiving notice that their registration is effective.

As an IFR it can be complied with immediately. FinCEN is accepting comments, although with no stated deadline, and It will become a final rule later this year.

***NEW***

FinCEN Beneficial Ownership Information Register reporting is now back in force – the new deadline is March 21, 2025

The suspension of the requirement for in-scope “reporting companies” to file data to the FinCEN Beneficial Ownership Information Register has now been lifted. FinCEN has confirmed that reporting companies who have not done so voluntarily since the suspension began now have until March 21, 2025 to file their initial, updated and/or corrected reports. Reporting companies given longer deadlines because of, for example, disaster relief, are still subject to those existing longer deadlines. It, “also intends to initiate a process this year to revise the BOI reporting rule to reduce burden for lower-risk entities, including many U.S. small businesses.”

Background

On December 23, the United States Court of Appeals for the Fifth Circuit ("the Court") stayed the December 3 preliminary injunction that had prohibited enforcement of the Corporate Transparency Act (“CTA”), which requires reporting companies to file beneficial ownership information (“BOI”) reports with US Department of the Treasury’s Financial Crimes Enforcement Network (“FinCEN”) by 1 January 2025. In lifting the injunction, the court ruled that the decision is in the "public's urgent interest in combating financial crime and protecting our country's national security." Although this action was coupled with a brief extension to related deadlines, it was likely to be a most unwelcome surprise for filers.

A mere three days later on December 26, the Court vacated the stay, reviving the preliminary injunction late in the day. In doing so, it noted that it was doing so “in order to preserve the constitutional status quo while the merits panel considers the parties’ weighty substantive arguments”. FinCEN has since updated its website to advise that CTA filings are voluntary for the time being.

For those who missed all of this activity due to well-earned holiday time off, the net effect is that nothing has changed for reporting obligations since they left. Still, we will continue to watch this matter closely and will update AIMA members accordingly.

***

The US Federal District Court for the Eastern District Texas has issued a preliminary injunction which prevents the Corporate Transparency Act (“CTA”) from being enforced nationally. On December 4, 2024, the court found that the CTA may be unconstitutional and so has issued the injunction. This is currently a temporary measure. This creates immediately uncertainty over in-scope reporting companies’ requirement to submit information to the Financial Crimes Enforcement Network (“FinCEN”) Beneficial Ownership Information register. The CTA provides FinCEN with the legal basis to run the register. Reporting companies in existence before January 1, 2024 had until January 1, 2025 to report certain data to the FinCEN register. This is currently not required.

FinCEN has put a short statement on its website: “In light of a recent federal court order, reporting companies are not currently required to file beneficial ownership information with FinCEN and are not subject to liability if they fail to do so while the order remains in force. However, reporting companies may continue to voluntarily submit beneficial ownership information reports.”

A further update was posted on January 24 with more detail on a further legal decision. But this does not change the position that filings are currently voluntary.

"On January 23, 2025, the Supreme Court granted the government’s motion to stay a nationwide injunction issued by a federal judge in Texas (Texas Top Cop Shop, Inc. v. McHenry—formerly, Texas Top Cop Shop v. Garland). As a separate nationwide order issued by a different federal judge in Texas (Smith v. U.S. Department of the Treasury) still remains in place, reporting companies are not currently required to file beneficial ownership information with FinCEN despite the Supreme Court’s action in Texas Top Cop Shop. Reporting companies also are not subject to liability if they fail to file this information while the Smith order remains in force. However, reporting companies may continue to voluntarily submit beneficial ownership information reports."

 Beneficial Ownership Information Reporting | FinCEN.gov

The National Futures Association and also put out guidance for its member commodity pool operators. Please see: NFA News Center | NFA

The opinion and order are here: TEXAS_TOP_COP_SHOP_INC_ET_AL_v_MERRICK_GARLAND_ATTORNEY_GENERAL_OF_THE_UNITED_STATES_ET_AL.pdf.

***

From January 1, 2024, U.S. and non-U.S. entities will have to comply with the new U.S. Financial Crimes Enforcement Network (“FinCEN”) Beneficial Ownership Information Reporting requirements to send beneficial ownership information to its new register.  This puts into place requirements in the Corporate Transparency Act for what are called “reporting companies” to submit information on their beneficial owners to FinCEN.  There is a complicated set of 20 exemptions to the new reporting requirements, described briefly in AIMA's summary.  While the legislation creating the reporting requirements and register are in place, FinCEN is still working some of the details.  These include, for example, the necessary IT systems and their security, how information is collected, the identifiers that will be used and access arrangements.

Please contact James Hopegood with any questions regarding these proposals.

• 

  James Hopegood

  Director, Asset Management Regulation