BENEFICIAL OWNERSHIP—Final rule issued regarding access to beneficial ownership information - 08 January 2024

The Treasury Department’s Financial Crimes Enforcement Network (FinCEN) has issued a final rule that establishes the framework for access to and protection of beneficial ownership information (BOI). Pursuant to the Corporate Transparency Act (CTA), the final rule outlines the circumstances under which reported BOI may be disclosed to federal agencies; state, local, tribal, and foreign governments; and financial institutions; and how it must be protected. The final rule regarding access to BOI is effective on Feb. 20, 2024.

“This final rule is a significant step forward in our efforts to protect our financial system and curb illicit activities,” said FinCEN Director Andrea Gacki. “BOI can provide essential information to law enforcement, intelligence, and national security professionals as they work to protect the United States from bad actors who exploit anonymous shell companies to engage in money laundering, corruption, sanctions and tax evasion, drug trafficking, fraud, and a host of other criminal offenses with impunity, while legitimate businesses suffer from their misdeeds.”

According to a FinCEN fact sheet, the final rule reflects FinCEN’s “commitment to creating a highly useful database for authorized BOI recipients while protecting this sensitive information from unauthorized disclosure.” Starting in February, FinCEN will begin to provide access to BOI in phases to authorized government agencies and financial institutions that meet the requirements of the final rule.

In conjunction with the final rule, the Office of the Comptroller of the Currency, the Federal Reserve Board, and the Federal Deposit Insurance Corporation issued an interagency statement to provide banks and non-bank financial institutions guidance on how they must comply with the BOI access rule (OCC Bulletin 2023-39, SR 23-11, and FIL-67-2023). The agencies note that the final rule does not create new regulatory requirements for banks to access BOI from the new system or a supervisory expectation that they do so. However, any access to and use of BOI obtained from the system must comply with the requirements of the final rule.

BOI registry accepting reports. On Jan. 1, 2024, FinCEN announced the formal start of collection requirements for the beneficial ownership information (BOI) database. The new reporting requirements encompass virtually all companies, mandating submission of the name, birth date, address, and identifying documents of any owners or beneficiaries in a company by the end of the year. In its announcement, FinCEN noted that information need only be filed once, with subsequent filings needed only with changes in ownership. Existing companies have until Jan. 1, 2025, to file this report. Companies formed after this date will need to submit additional filings identifying the specific founders of the company, due within 90 days of public notice of the company’s formal creation.

© 2021 CCH Incorporated and its affiliates and licensors. All rights reserved.