The Financial Crimes Enforcement Network (FinCEN) has issued a Notice of Proposed Rulemaking (NPRM) that would implement the beneficial ownership information provisions of the Corporate Transparency Act (CTA) that govern access to and protection of beneficial ownership information. The proposed regulations address the circumstances under which beneficial ownership information may be disclosed to certain governmental authorities and financial institutions, and how that information must be protected.
The proposed regulations would—
- specify how government officials would access beneficial ownership information in support of law enforcement, national security, and intelligence activities;
- describe how certain financial institutions and their regulators would access that information to fulfill customer due diligence requirements and conduct supervision; and
- set high standards for protecting this sensitive information, consistent with CTA goals and requirements.
The NPRM also proposes amendments to the final reporting rule issued on September 30, 2022, effective January 1, 2024, to specify when reporting companies may report FinCEN identifiers associated with entities.
Limiting Access to Beneficial Ownership Information
The NPRM follows the final reporting rule which requires most corporations, limited liability companies, and other similar entities created in or registered to do business in the United States, to report information about their beneficial owners to FinCEN. Per CTA requirements, the proposed regulations limit access to beneficial ownership information to—
- federal agencies engaged in national security, intelligence, or law enforcement activities;
- state, local, and Tribal law enforcement agencies, if authorized by a court of competent jurisdiction;
- financial institutions with customer due diligence requirements, and federal regulators supervising them for compliance with those requirements;
- foreign law enforcement agencies, judges, prosecutors, central authorities, and other agencies that meet specific criteria, and whose requests are made under an international treaty, agreement, or convention, or via law enforcement, judicial, or prosecutorial authorities in a trusted foreign country; and
- U.S. Treasury officers and employees whose official duties require beneficial ownership information inspection or disclosure, or for tax administration.
The proposed regulation would subject each authorized recipient category to unique security and confidentiality protocols that align with the scope of the access and use provisions.
Proposed Effective Date
FinCEN is proposing an effective date of January 1, 2024, to align with the date when the final beneficial ownership information reporting rule becomes effective.
Request for Comments
Interested parties can submit written comments on the NPRM by or before February 14, 2023 (60 days following publication in the Federal Register). Comments may be submitted by the Federal E-rulemaking Portal ( regulations.gov), or by mail to Policy Division, Financial Crimes Enforcement Network, P.O. Box 39, Vienna, VA 22183. Refer to Docket Number FINCEN-2021-0005 and RIN 1506-AB49/AB59.