The Treasury Department has permanently eliminated a requirement for U.S. companies and individuals to report beneficial ownership information to the Financial Crimes Enforcement Network, or FinCEN, reversing a transparency rule created under the Corporate Transparency Act.
Treasury Secretary Scott Bessent called the move "a victory for common sense and American small businesses," saying the administration was removing a reporting burden for millions of business owners "without compromising our national security."
The final rule, published Tuesday, also exempts Americans with FinCEN identification numbers from updating their information, removes reporting requirements for U.S. individuals who help foreign companies register to do business in the country and directs FinCEN to delete previously submitted information it reasonably believes belongs to U.S. persons.
Foreign companies covered by the law must still report beneficial ownership information for foreign individuals.
The Corporate Transparency Act, passed by Congress in 2020, was designed to make it harder to hide the identities of people who control shell companies. A beneficial owner is generally someone who owns at least 25% of a company or exercises substantial control over it.
Sen. Elizabeth Warren, the top Democrat on the Senate Banking Committee, sharply criticized the rollback, calling it "a gift to cartels, criminals, and U.S. adversaries that exploit shell companies to move millions through our financial system."
Warren argued that the change weakens efforts to combat drug trafficking, fraud and sanctions evasion, and noted that Secretary of State Marco Rubio once praised the Corporate Transparency Act as "the most significant anti-corruption and money laundering law in decades." She called on Bessent to reverse the decision and testify before the committee.
Treasury maintains that keeping reporting requirements for foreign entities will still help law enforcement pursue terrorism financing, transnational crime and other illicit activity.
The Government Accountability Office warned in May that exempting most U.S. companies could create enforcement risks and recommended that Treasury address them. Treasury disagreed with that recommendation.
