On December 7, 2021, the US Financial Crimes Agency published the draft NPRM rules on beneficial ownership reporting.
The law on corporate transparency entered into force by the CTA on January 2, 2020, it obliges the authorized bodies to develop clarifying provisions of the Law by the end of 2021. The deadline for comments related to NPRM expires on February 7, 2022.
FinCEN's draft regulations primarily focus on the CTA's beneficial ownership reporting requirements. Once the regulation is in place, many existing foreign organizations in the United States will be required to report their beneficial ownership to FinCEN.
While recognizing the CTAs' exceptions, the FinCEN rules clarify a number of ambiguities in the CTA as to who should submit applications, when they should be submitted, and which organizations are exempt from doing so. In this regard, NPRM requires prompt filing with FinCEN (within 14 days of creation or registration) by persons ("company applicants") responsible for the creation of newly formed corporations, limited liability companies, limited partnerships, commercial trusts, and also other similar organizations created or registered by submitting documents to a government agency. The 14-day registration requirement will also apply to foreign organizations with an “operational presence in a physical office in the United States” that register for the first time in the United States.
To help the listed organizations, their owners and consultants understand the scope and some of the details of the proposed changes, FinCEN has issued a short newsletter highlighting what FinCEN calls “key elements of the proposed beneficial ownership disclosure regulation.
A thorough review of the beneficial ownership reporting rules and their final version when published is important to better understand the CTA requirements and the information to be sent to the FinCEN CTA beneficial ownership database.
