Interim rule to limit BOI collection to foreign entities set to kick in Wednesday

U.S. companies and persons will no longer have to report beneficial ownership information (BOI) to Treasury’s Financial Crimes Enforcement Network (FinCEN) under an interim final rule poised to take effect Wednesday.

The interim final rule is being issued with a 60-day comment period attached.

BOI is collected under the Corporate Transparency Act (CTA) to support FinCEN’s efforts to enforce Bank Secrecy Act (BSA) reporting of suspicious monetary transactions. The reports are aimed at helping law enforcement monitor transactions moving through the U.S. financial system that may be related to activities like illegal money laundering and funding of terrorism.

For purposes of BOI reporting, the FinCEN interim rule will revise the definition of “reporting company” to mean only those entities that are formed under the law of a foreign country and that have registered to do business in any U.S. state or tribal jurisdiction by the filing of a document with a secretary of state or similar office, FinCEN said. It also exempts entities previously known as “domestic reporting companies” from BOI reporting requirements, the agency said.

FinCEN noted that all entities created in the United States — including those previously known as “domestic reporting companies” — and their beneficial owners will be exempt from the requirement to report BOI to FinCEN.

It said foreign entities that meet the new definition of a “reporting company” and do not qualify for an exemption from the reporting requirements must report their BOI to FinCEN under new deadlines. These foreign entities, however, will not be required to report any U.S. persons as beneficial owners, and U.S. persons will not be required to report BOI with respect to any such entity for which they are a beneficial owner.

Treasury on March 2 announced the suspension of enforcement of the CTA’s BOI requirements against U.S. citizens or domestic reporting companies, or their beneficial owners. It also said it would issue a proposed rulemaking to narrow the rule’s scope to foreign reporting companies only.

FinCEN Removes Beneficial Ownership Reporting Requirements for U.S. Companies and U.S. Persons, Sets New Deadlines for Foreign Companies

Federal Register notice