One of the biggest new US anti-money laundering reporting regimes has effectively just been dismantled, after FinCEN finalised sweeping changes to the Corporate Transparency Act’s beneficial ownership reporting requirements.
As detailed by Areg Nzsdejan in a recent LinkedIn post, the original regime was designed to require millions of US companies to disclose who ultimately owns and controls them to FinCEN, laying the groundwork for what was billed as a landmark tool in the fight against financial crime.
That obligation has now effectively been erased. US companies are permanently exempt from reporting beneficial ownership information to FinCEN, meaning reporting companies no longer need to disclose details of US-person beneficial owners or company applicants, nor do those individuals need to hand over that information in the first place.
FinCEN has confirmed it will delete previously reported data relating to US persons who now fall outside the regime’s scope. Only certain foreign entities registered to do business in the US remain subject to the requirement, and even then, generally only in relation to non-US persons.
It marks an extraordinary reversal for a regime that only took effect in 2024, having been designed to build a major new federal beneficial ownership database to help combat money laundering, sanctions evasion and wider financial crime.
For compliance teams, the episode is a pointed reminder that regulatory obligations can shift just as sharply in reverse as they can when first introduced. De-regulation, it turns out, demands just as much change management as regulation ever did.
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