FinCEN Confirms It Won't Enforce Ownership Reporting Rule Amid Court Injunction
The Financial Crimes Enforcement Network said it won’t be enforcing new reporting requirements under its upcoming beneficial ownership information reporting rule in light of a recent federal court order blocking the rule from taking effect. A statement on FinCEN’s website confirmed that companies are “not subject to liability if they fail to” report while the court order is in force, though those companies can voluntarily submit reports if they wish.
Sign up for a free preview to unlock the rest of this article
Export Compliance Daily combines U.S. export control news, foreign border import regulation and policy developments into a single daily information service that reliably informs its trade professional readers about important current issues affecting their operations.
“While this litigation is ongoing, FinCEN will comply with the order issued by the U.S. District Court for the Eastern District of Texas for as long as it remains in effect,” the agency said. “Therefore, reporting companies are not currently required to file their beneficial ownership information with FinCEN and will not be subject to liability if they fail to do so while the preliminary injunction remains in effect.”
The statement came after a federal court in Texas issued a preliminary injunction on Dec. 3 blocking FinCEN from implementing and enforcing portions of the rule outlined in the Corporate Transparency Act. The rule is designed to help the government prevent sanctioned parties and others from hiding money or property in the U.S., and it had called for most companies to submit reports by Jan. 1.