FinCEN Issues Initial Beneficial Ownership Information Reporting Guidance
March 28, 2023
The Financial Crimes Enforcement Network (FinCEN) on March 24 published its first set of guidance materials to aid the public—and in particular the small business community—in understanding upcoming beneficial ownership information (BOI) reporting requirements.
The new regulations, which go into effect Jan. 1, 2024, require many corporations, limited liability companies and other entities created in or registered to do business in the United States to report information about their beneficial owners—the persons who ultimately own or control the company—to FinCEN.
“The Corporate Transparency Act, through its beneficial ownership reporting requirements, provides the historic opportunity to unmask shell companies and protect the U.S. financial system from abuse by money launderers, drug traffickers, sanctioned oligarchs, and other criminals,” said Himamauli Das, acting director of FinCEN. “We are committed to making this transparency process as simple as possible, particularly for small businesses who may have never heard of or interacted with FinCEN before.”
It's been reported that the initial form proposed by FinCEN has issues because it lets businesses say the ownership information is "unknown." According to reports, a Treasury official said the department will correct the form to ensure its clear that reporting companies must submit all beneficial ownership information.
ALTA submitted a letter in support of the development of the BOI system being created by the Financial Crimes Enforcement Network (FinCEN).
BOI is a critical tool for combatting money laundering through real estate transactions. The Geographic Targeting Orders (GTOs) that many title companies must comply with have shown that BOI is the critical piece of information that has not historically been available commercially or from government data.
“When fully implemented, the BOI system will provide law enforcement with its most valuable source of data about the use of shell companies to launder funds via real estate,” ALTA said.
Currently, FinCEN has proposed to limit access to the BOI system to entities subject to the Customer Due Diligence rule.
ALTA recommended FinCEN broaden the scope of the rule to include facilitating compliance for financial institutions subject to a special measure, GTO or other rule that requires the collection, reporting or review of BOI.
“This should include a title insurance company or its licensed agents that have to comply with any extensions of the real estate GTOs or any other real estate transaction reporting regime,” ALTA said.
The following materials are now available on FinCEN’s beneficial ownership information reporting webpage, www.fincen.gov/boi:
- Answers to Frequently Asked Questions about the reporting requirement.
- One Pagers on Key Filing Dates and Key Questions.
- An Introductory Video and more detailed Informational Video about the reporting requirement.
Additional guidance will be published at www.fincen.gov/boi in the coming months, to include a Small Entity Compliance Guide.
FinCEN will not be accepting any beneficial ownership information before Jan. 1, 2024. Information on how to submit beneficial ownership information to FinCEN will be forthcoming.
Businesses with questions about the upcoming reporting requirements may contact FinCEN at https://www.fincen.gov/contact.
Contact ALTA at 202-296-3671 or email@example.com.