The long awaited final rule from FinCEN was issued on Sept. 29, 2022. This solidified the beneficial ownership information (BOI) reporting requirements as well as gave us that starting date for when the rule will begin. As part of the Anti-Money Laundering Act of 2020, FinCen will begin its BOI reporting requirements on Jan. 1, 2024.
The CTA establishes requirements for foreign and domestic entities to submit identifying information regarding its beneficial owners. It also requires said entities to properly store this information so that it can be readily accessible. In hopes of building a strong national database, FinCEN will collect this information with the plans to use said data for combating money laundering efforts across the globe.
According to FinCen, “These requirements are intended to help prevent and combat money laundering, terrorist financing, corruption, tax fraud, and other illicit activity, while minimizing the burden on entities doing business in the United States.”
“U.S. efforts to collect BOI will lend U.S. support to the growing international consensus to enhance beneficial ownership transparency, and will spur similar efforts by foreign jurisdictions. At least 30 countries have already implemented some form of central register of beneficial ownership information, and more than 100 countries, including the United States, have committed to implementing beneficial ownership transparency reforms.”
On this newest document being referenced, they also speculate on the costs involved to file these reports. This is an important answer for many small business owners who are having to add this to the list of legal paperwork to be on top of. According to FinCEN, most reporting companies would be looking at an estimate of $85.14 to prepare and submit the detailed requirements for an initial BOI report.
Why is the CTA Happening
With the amount of rising tensions across nations, it isn’t too surprising to see a rise in shadier business transactions. As many people face crippling inflation and political struggles, money laundering and other illicit financial crimes are seeing a increase. Given the 2024 start date, it may seem like these anti-money laundering efforts are a pure reaction for some. They are actually developing alongside them these days and it seems this may only help the efforts of passing the regulations. Click here to read more about why FinCEN is pushing for these regulations.