USA: CTA enforcement and scope set for major rollback
On February 27, 2025, Financial Crimes Enforcement Network (FinCEN) announced on its website that FinCEN would not be issuing any fines or penalties or taking any other enforcement actions against companies that fail to file or update any beneficial ownership information (BOI) reports by the current reporting deadlines. That includes the March 21, 2025 deadline previously announced for most reporting companies.
FinCEN added that there would be no enforcement until an interim final rule on BOI reporting becomes effective on or before March 21, 2025. The new rule will include new due dates for BOI reports. FinCEN stated that this decision was made in furtherance of the U.S. Department of Treasury’s commitment to reducing the burden on lower-risk entities, including many U.S. small businesses, and prioritizing information on entities that “pose the most significant law enforcement and national security risks.”
FinCEN also announced that it intends to solicit public comments on possible modifications to the existing BOI reporting requirements, and that such comments will be considered in the proposed rulemaking to reduce the burden on small businesses, determine the reporting deadlines, and prioritize the aforementioned higher risks.
After the FINCEN announcement, on March 2, 2025, the Department of the Treasury announced that the CTA would not be enforced against US citizens or domestic reporting companies after the FINCEN rule changes take effect.
While FINCEN would need to adopt a formal rule to give effect to the position announced by the Department of the Treasury, it seems that it is highly unlikely that US persons will need to file BOI reports. As the CTA developments continue to evolve, it would be prudent to keep close tabs on the situation, as we will.
