The Financial Crimes Enforcement Network has received more than 100,000 filings on beneficial ownership information since it began accepting reports last week, Treasury Secretary Janet Yellen said.
Secretary of the Treasury Janet Yellen offered remarks this week on the current status of FinCEN’s Beneficial Ownership Information (BOI) Reporting Initiative. And in addition to dropping that number, she mentioned that the agency’s collection of BOI will protect national security and provide economic benefits, such as protecting the financial system and reducing due diligence costs.
“We’re closing a loophole and sending a clear message: The United States is not a haven for dirty money,” Yellen said.
The reporting rule is part of the 2021 Corporate Transparency Act that went into effect on January 1, 2024. It requires all but certain types of companies to disclose who really controls and benefits from them as part of an effort to help stop criminals and terrorists from using anonymous shell companies to hide their dirty money.
Fighting financial crime
Until now, thousands of companies registered themselves every year under the names of hired corporate agents or attorneys for the actual owners, effectively hiding who truly controlled the businesses.
The new rules will make the registry available to law enforcement to expedite investigations into illicit activities – such as money laundering, drug trafficking and tax evasion.
“Information on beneficial ownership will support our law enforcement colleagues in making arrests, prosecuting offenders, and seizing ill-gotten assets. It will also inform strategic, targeted actions, such as sanctions,” Yellen said.
Small businesses and real estate transactions
Yellen said the agency is also “making reporting as easy as possible for the small businesses at the heart of the American economy so that the benefits for small businesses, and for all of us, will far outweigh what should be a relatively straightforward effort to comply”.
Looking to the near future, she said the agency aims to issue a notice of proposed rulemaking early this year that is designed to bring greater transparency to residential real estate transactions, and is considering next steps to address risks associated with commercial real estate.
“Information on beneficial ownership will support our law enforcement colleagues in making arrests, prosecuting offenders, and seizing ill-gotten assets.”
Janet Yellen, US Treasury Secretary
In November, FinCEN was instrumental in the Treasury’s settlement against Binance Holdings, Ltd., the world’s largest virtual currency exchange. The agency’s $9.68m settlement with the exchange resolved its potential civil liability for 1,667,153 apparent violations of multiple sanctions programs.
“This was the largest enforcement action in the Treasury’s history and it sent a powerful message to the broader virtual currency,” Yellen said.
The penalties meted out included record-breaking civil fines for the Treasury Department and the first monitorship imposed by FinCEN.