The U.S. Department of the Treasury’s Financial Crimes Enforcement Network (FinCEN) has initiated a pivotal measure aimed at enhancing financial transparency and limiting illicit finance in the United States. The department is now accepting beneficial ownership information reports from companies conducting business within the country.
This action stems from the bipartisan Corporate Transparency Act, enacted in 2021 with the objective of curbing underhanded financial practices. Under this law, companies are required to disclose information about the individuals who ultimately own or control them.
“The launch of the United States’ beneficial ownership registry marks a historic step forward to protect our economic and national security,” said Secretary of the Treasury Janet L. Yellen. She emphasized that corporate anonymity facilitates various criminal activities, including money laundering, drug trafficking, terrorism, and corruption. It adversely affects American citizens and puts law-abiding small businesses at a disadvantage.
Yellen hailed the creation of a centralized database of beneficial ownership information as a significant move to eliminate critical vulnerabilities in the U.S. financial system. This will equip the nation to tackle illicit finance enabled by opaque corporate structures.
Filing beneficial ownership information is straightforward, secure, and free of charge. Companies obligated to comply must meet specific deadlines for initial reports. Existing companies created or registered before January 1, 2024, have until January 1, 2025, to file. For newly created or registered companies, they have 90 calendar days to file after receiving notice that their company’s creation or registration is effective.
Beneficial ownership reporting is not an annual requirement, but a one-time obligation unless updates or corrections are needed. Generally, reporting companies must provide four pieces of information about each beneficial owner: name, date of birth, address, and identification number and issuer from a non-expired U.S. driver’s license, passport, or state-issued ID. If none of these documents exist, a non-expired foreign passport can be used.
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