Reported by Thomas Georges

The bipartisan Corporate Transparency Act (CTA), which requires anonymous companies and other entities registered in the U.S. to report identifying information on their true, “beneficial” owners, is under serious threat of being weakened by a combination of flawed rulemakings and a draft information intake formreleased by Treasury that could make reporting functionally optional under the law.

Last month, FACT and other advocates raised the alarm about Treasury’s second draft rule to implement the Corporate Transparency Act, which establishes burdensome requirements – some without statutory basis – for authorized users seeking to access beneficial ownership information collected under the law. These concerns were echoed by a bipartisan group of five Senators last week, who argued in a letter to Treasury’s Financial Crimes Enforcement Network (FinCEN) that the draft rule’s restrictive nature “strays from congressional intent,” and may “risk undermining the utility of the beneficial ownership directory.”

This week, FACT and 15 other organizations submitted comments to Treasury on a draft form that would be used to collect required information from reporting entities. The form in question allows filers to claim that they are “unable to obtain” fundamental identifying information about their true owners, or otherwise claim that said information is “unknown,” in direct contravention of the mandatory reporting regime established by the text of the CTA. 

These twin threats to the efficacy of one of the foremost anti-money laundering (AML) accomplishments in generations have the potential to seriously undermine the Biden administration’s broader anti-corruption agenda, and leave the U.S. financial system open to abuse by bad actors shielding their identities and investments behind layers of anonymous shell companies.

Read full report: https://thefactcoalition.org/strong-financial-transparency-law-implementation-at-risk-as-treasury-weighs-ownership-information-reporting-forms/