Consistent with its announcement of February 27, 2025, and the Department of the Treasury’s announcement of March 2, 2025, the Financial Crimes Enforcement Network (FinCEN) issued an interim final rule on March 21 which is effective immediately upon publication in the Federal Register.
In the interim final rule, the definition of “reporting company” is limited to mean only those entities that are formed under the law of a foreign country and that have registered to do business in any U.S. State or Tribal jurisdiction by the filing of a document with a secretary of state or similar office (formerly known as “foreign reporting companies”). These foreign companies will not, however, be required to report any U.S. persons as beneficial owners and U.S. persons will not be required to report BOI with respect to any such entity. Accordingly, foreign reporting companies that only have beneficial owners that are U.S. persons will be exempt from the requirement to report any beneficial owners. Also, all entities created in the United States (those previously defined as “domestic reporting companies”) are exempt from any BOI reporting requirement, including of any non-U.S. person.
Foreign reporting companies that do not qualify for an exemption from the reporting requirements must report their BOI to FinCEN no later than 30 days from the date the interim final rule is published in the federal register for companies already registered to do business in the U.S. or 30 days from the date of receiving notice that they are registered to do business in the United States.
The CTA allows the Department of the Treasury (of which FinCEN is a part) to exempt any entity or class of entities from reporting requirements if the Secretary of the Treasury determines, with the written concurrence of the Attorney General and the Secretary of Homeland Security, that requiring such beneficial ownership information would not serve the public interest and would not be highly useful in national security, intelligence, and law enforcement agency efforts. FinCEN notes that the Secretary’s determination, with the concurrence of the Attorney General and Secretary of Homeland Security, is also consistent with the direction of the President, including as set forth in E.O. 14192, Unleashing Prosperity Through Deregulation.
FinCEN is accepting comments on this interim final rule and intends to finalize the rule this year.
Based on this complete reversal by the Department of the Treasury with regards to the enforcement of the CTA against U.S. companies and U.S. persons, it would not be unreasonable to assume that the CTA is indeed “dead” for all domestic entities and persons. It would, it seems, take an act of Congress to amend and revive it again but given the current political environment that is unlikely to happen any time soon.
Meet the Author
Mohineet Khosla received her J.D. from New York University School of Law in 2001. Following law school, Mohineet practiced for over a decade at Milbank LLP in NYC.
Her practice included providing sophisticated estate planning advice to high net worth families, both domestic and international. Mohineet has also represented clients in audits before the Internal Revenue Service and fiduciaries on complex estate and trust administration matters.
