U.S. Treasury Enhances Transparency: Removing the “Unknown” Option on the Beneficiary Register

Transparency laws in the US have caused serious discontent among both human rights organisations and professional legal, trust and financial associations. Despite numerous attempts to prevent the passage of a beneficiary registry law, opponents of the initiative sought to achieve the ability to simply list “unknown” in reporting, and they seemed to have succeeded. Details of the draft can be found here.

However, the U.S. Treasury Department tightened the reporting rules for the registry of business owners at the last minute, closing a loophole that experts argue could have seriously undermined pending federal transparency reforms.

The revised version of the form no longer allows reporting entities to indicate that they are “unable to obtain” information or to refuse to provide owner names, addresses and other identifying information by marking them as “unknown.”

This mandatory disclosure form will be the tool FinCEN will use to collect data on owners of limited liability companies, corporations, and other entities in order to populate the database. This is intended to strengthen financial regulators’ oversight and prevent abuse through anonymous intermediary companies.

Reporting is to begin from 1 January 2024. Companies established on or after this date will have 90 days to provide beneficial ownership information. Existing companies have until the end of next year to comply.

 

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