BOI Reporting Rule Will Remain ‘Highly Useful’ After Update, Treasury Says
When the Financial Crimes Enforcement Network revises a rule implementing the Corporate Transparency Act (CTA), it will aim to ensure the regulations are “appropriately tailored to advance the public interest,” a Treasury Department official told lawmakers last week.
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“FinCEN will consider comments to the forthcoming rulemaking with the objective of minimizing burden on small businesses while ensuring that beneficial ownership information (BOI) collected is highly useful to important national security, intelligence, and law enforcement activities,” said Jonathan Blum, Treasury’s principal deputy assistant secretary for legislative affairs.
Blum made his comments in a March 11 letter to Sens. Sheldon Whitehouse, D-R.I., and Chuck Grassley, R-Iowa, who had questioned Treasury’s recently announced plan to narrow the scope of the rule so that it applies only to foreign firms and not U.S. businesses (see 2503030042 and 2503110025). At a March 14 Senate Finance Committee hearing on the nomination of Michael Faulkender to be deputy treasury secretary (see 2503060069), Whitehouse described Blum’s letter as a “cursory response.”
Whitehouse later told Export Compliance Daily that he plans to continue monitoring the matter. “We’re going to follow up on their supposed process for protecting the national security and law enforcement imperatives,” Whitehouse said. “I think that’s a fake but we’ll see.”
The senators asked Treasury March 10 to provide the legal basis for changing the rule and explain how it will still meet the policy goals of the CTA, which was enacted in 2021 to help the government prevent sanctioned parties and others from hiding money or property in the U.S. The lawmakers encouraged Treasury to “fully implement” the CTA.
The Financial Accountability & Corporate Transparency Coalition, an advocacy group that has criticized Treasury's decision, said March 6 that the upcoming rule change will "remove reporting obligations from as many as 99.8% of all covered entities, effectively gutting" the CTA. The group March 11 welcomed the "bipartisan pushback" by Whitehouse and Grassley, saying the department's "move was made without any basis in the statute, which clearly requires Treasury to include domestic companies in its ownership database."