Explainer: UPDATE - Hold off on reporting under the new FinCen rules
Angie M Grainger
On March 1, 2024, in the case of National Small Business United v. Yellen, No. 5:22-cv-01448 (N.D. Ala.), a federal district court in the Northern District of Alabama, Northeastern Division, ruling that the Corporate Transparency Act exceeds the Constitution’s limits on Congress’s power and prevents FinCen from enforcing the Corporate Transparency Act.
So what do you do?
Don't file anything until after the appeal is ruled on, or further instructions are provided
Don't hire anyone to file a FinCen report for you. Business owners may get letters or emails offering to file these for you for a fee. Don't.
More to come.
______________________________________________
Original Post:
The Financial Crimes Enforcement Network (FinCEN) has introduced significant changes in reporting requirements, starting January 1, 2024.
These changes aim to bolster transparency, combat financial crimes, and enhance the overall integrity of financial transactions.
Benefits of the New FinCEN Reporting Requirements
Increased Transparency: One of the primary advantages of the new FinCEN reporting requirements is the enhanced transparency in beneficial ownership. Businesses will be required to provide detailed information about beneficial owners, thereby shedding light on complex ownership structures and potentially mitigating illicit financial activities.
Better Anti-Money Laundering (AML) Measures: It also underscores more stringent Anti-Money Laundering measures. This is crucial in the fight against money laundering, terrorism financing, and other illicit financial activities, fostering a more secure financial ecosystem.
Improved Compliance and Due Diligence: The updated reporting mandates will likely prompt businesses to bolster their compliance efforts. This includes reporting thresholds, conducting thorough due diligence, and implementing stronger internal controls. Strengthening these measures can fortify businesses against risks and ensure regulatory adherence.
Requirements of the New FinCEN Reporting
Beneficial Ownership Reporting: Businesses will need to provide details about their beneficial owners. This includes information about individuals with significant ownership stakes or control within the company, promoting a clearer understanding of ownership structures.
Revised Thresholds: There might be changes in reporting thresholds, necessitating businesses to reassess and potentially adjust their reporting practices to align with the updated requirements.
Emphasis on Compliance: Strict adherence to the new regulations is vital. Businesses must ensure their compliance with the revised FinCEN reporting requirements to avoid penalties and legal repercussions.
Reporting Opens January 1, 2024: The new FinCEN reporting requirements set to take effect on January 1, 2024. Most businesses will have until January 2025 to get into compliance. While this may be an adjustment, the long-term benefits in terms of increased transparency, strengthened AML measures, and improved compliance standards are invaluable.
Contact us for Assistance with the Reporting
Existing Clients: Contact your Account Manager for help in applying the new reporting requirements or determining if you meet any of the exceptions.
Prospective Clients: Contact us to schedule a time to review your circumtances.
Note: This articles serves as a general overview and its recommended that you verify any updates or changes with official FinCEN sources or legal counsel as of the implementation date in 2024.
Learn more at finCEN: https://www.fincen.gov/sites/default/files/shared/BOI%20Informational%20Brochure%20508C.pdf
Someone you’re thinking of?
Use this button to ‘copy’ the article link and ‘paste’ to your friends!
