Greetings!
The Anti-Money Laundering Act of 2020 (AMLA) contained a provision that requires more transparency in the formation of corporations in the U.S., specifically the collection of data on beneficial owners. The Corporate Transparency Act (CTA), requires companies to report to FinCEN personal information on the beneficial owners to be maintained in a secure and private database that will not be made public but would be available to law enforcement and Financial Institutions under certain conditions. The CTA takes effect on January 1, 2024.
On September 29th, 2022, FinCEN issued the first of three rules to implement the CTA which covered three important questions:
Who must report?
What type of information must be reported?
When must the information be submitted?
On December 15th, 2022, FinCEN issued a Notice of Proposed Rulemaking (NPRM) that covers who may have access to the database that FinCEN is constructing (“Access Rule”):
Federal agencies and state, local, tribal, and foreign governments under certain circumstances
Financial Institutions, for purposes of complying with their CDD obligations, with the express authorization of their customer
The NPRM raised several questions/concerns regarding obligations imposed on Financial Institutions which were raised by FIBA in a comment letter submitted to FinCEN on February 14th which can be accessed through this link.
A special shoutout to Carl Fornaris (Winston & Strawn), Marina Olman (Greenberg Traurig), Daniel Gutierrez (Ocean Bank), and George Arnett (Insigneo) for leading the efforts of the LARA committee in preparing the comment letter.
Regards,
David Schwartz
CEO & President