The Department of the Treasury’s Financial Crimes Enforcement Network has issued a final rule requiring certain entities to report information about their beneficial owners to the agency to increase transparency in the U.S. financial system.
The final rule will take effect on Jan. 1, 2024, and implement the Corporate Transparency Act, which requires the disclosure of corporate ownership to help prevent money laundering and other illicit financial activities, FinCEN said Thursday.
In a separate statement, Treasury Secretary Janet Yellen said the final rule builds on years of bipartisan work by Congress, the government and other stakeholders to enhance corporate transparency.
“It will help strengthen our national security by making it more difficult for oligarchs, terrorists, and other global threats to use complex legal structures to launder money, traffic humans and drugs, and commit other crimes that threaten harm to the American people,” Yellen said.
Existing companies will have until Jan. 1, 2025, to file their initial reports while companies created or registered after the rule’s implementation will have 30 days after creation or registration to identify and report beneficial owner information.
FinCEN also plans to establish rules to protect beneficial ownership information and revise its customer due diligence rule to implement the CTA.