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Global Trade & Sanctions LawPublished on:
Implementing the CTA: FinCEN Requires U.S. Companies to Report Beneficial Ownership Information and Protect Against Shell Company Misuse
On September 29, 2022, the U.S. government took an important step in its efforts to increase transparency, combat shell companies, and limit abuse of entities and trusts formed under U.S. state law. The U.S. Treasury Department’s Financial Crimes Enforcement Network (FinCEN) issued a final rule implementing provisions of the Corporate Transparency Act (CTA), which requires entities to report information about their beneficial owners, i.e., individuals who ultimately own or control the company as well as the “company applicant” who created or registered the entity. The rule will go into effect on January 1, 2024, allowing time for industry to familiarize itself with the new requirements. The CTA is an important component of the Anti-Money Laundering Act of 2020, and this final rule will have significant implications for a variety of companies, investors and professionals that organize via U.S. companies and certain trusts.
