FinCEN will issue new rules and suspend all CTA filing obligations.
FinCEN, the U.S. Financial Crimes Enforcement Network, announced on February 19, 2020 that it would extend the deadline for filing beneficial ownership information under the CTA to March 21, 2020. (See Client Alert here). FinCEN announced yesterday that it would not issue fines or penalties, or take any enforcement actions against companies for failing to file or update any reports mandated under the CTA. FinCEN says that “no enforcement action will be taken until a forthcoming final interim rule becomes effective.” FinCEN has stated that the interim rule will not become effective before March 21, 2025. The new rule will set new CTA submission deadlines. For the time being, no entity is required to submit or update any CTA documents. FinCEN announced yesterday that they will be soliciting public comments on “potential changes” to the existing CTA reporting requirements. FinCEN will use these comments to develop a proposed rulemaking that is expected to be released later this year. The goal of the proposal is to reduce the burden
on small businesses, while also ensuring that it is useful for important national security, law enforcement, and intelligence activities. . . should be considered.”
FinCEN reiterated the U.S. Treasury Department’s “commitment to reducing [the] regulatory burden on businesses, as well as prioritizing [beneficial ownership information] for those entities that pose the most significant law enforcement and national security risks.”[as]This is a resounding win and relief for thousands of companies who had been preparing to make filings and navigating complex and confusing rules. All companies can now wait for a reporting regime that will almost certainly be significantly narrower. If you have any questions about this memo, please contact the authors or the regular contacts in the firm.
