Kent Nishimura Los Angeles Times Getty images
The Department of the Treasury is scrapped Requirements for American small companies report information about your owners to the federal government. This is the latest twist at the On-Off-Off-Again sagie for the bride’s rule.
The Act on corporate transparency, adopted in 2021, required millions of companies to submit basic information about their “beneficial owners”. By identifying who was the owner of some entities, the legislators tried to limit criminal activities and illegal financing carried out by unwanted coating companies.
The rule was aimed at entering into force on March 21, after months of delays in court. This He was carrying financial penaltiespotentially thousands of dollars, for non -compliance.
However, the financial crime enforcement network – also known as Finnce, which is part of the treasury – released Temporary final rule of March 21 release of all US citizens and American companies from the reporting requirement.
The rule is open to public comments and will be finalized this year.
“It absolutely spills the principle”
If it stands, the principle of Finn would be a significant departure from the purpose of the Act on corporate transparency and offer gaps for criminals to continue washing money through American entities, according to legal experts.
“This is absolutely watering the principle,” said Erin Bryan, a partner and co-chairman of the financial services group at Dorsey & Whitney. “Many Shell companies will now be released from reporting,” she added.
Finnce said that some foreign companies operating in the US will still be required to submit reports.
Finnce estimates that this changed reporting requirement will apply up to about 20,000 entities in the first year – significantly reduced from 32.6 million entities, including some corporations, limited liability companies and others earlier estimated be subject to reporting requirement in the first year.
Bryan said that most of the Western world already has such requirements.
Finnce refused to comment on this story.
Team pushes
The change of policy is in line with the deregulation directive of President Donald Trump, director of Finn, Andrea Gacki, who adopted her position in 2023, according to the final message.
Trump’s administration already had suspended enforcement requirement at the beginning of this month. Civil penalties could amount to up to 591 USD per day, in addition to $ 10,000 in the criminal fine and up to two years in prison.
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The State Treasury “again assessed the balance between the usefulness of collecting [beneficial ownership information] and regulatory charges imposed by the scope of the reporting rule – wrote Gacki.
Officials undertook illegal financial risk, alternative sources of information, “charges” of collecting data and public interest, she wrote.
Potential gaps
Bryan said that reporting requirements apply to some foreign companies created in another country and are registered for conducting business activity.
However, if such entities had a favorable owner based in the USA, they are no longer obliged to report information about this person, added Bryan, Bryan added
“In the world of potential SHELL companies, this is a small subset we are dealing with,” which still has to submit reports about favorable owners, she said.
Some observers believe that the temporary principle would easily allow criminals to detect.
“From that day, criminals can avoid this national security law, simply starting and running these front companies in the United States,” said Scott Grayytak, Director of spokesman of the Transarency International USA, a coalition against corruption.
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