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Enforcement of BOI and Corporate Transparency Act suspended by Treasury Department, Trump reacts, ‘This Biden rule…’
The Treasury Department has announced that it will no longer enforce the Corporate Transparency Act or the associated BOI reporting requirements.
The Treasury Department has announced that it will no longer enforce the Corporate Transparency Act or the associated Beneficial Ownership Information reporting requirements. The agency asserted that “not only will it not enforce any penalties or fines associated with the beneficial ownership information reporting rule under the existing regulatory deadlines, but it will further not enforce any penalties or fines against U.S. citizens or domestic reporting companies or their beneficial owners after the forthcoming rule changes take effect either.”
The Treasury Department said it will soon issue a proposed rule to narrow the scope of the rule to foreign reporting companies only. “This is a victory for common sense,” said U.S. Secretary of the Treasury Scott Bessent. “Today’s action is part of President Trump’s bold agenda to unleash American prosperity by reining in burdensome regulations, in particular for small businesses that are the backbone of the American economy.”
Donald Trump reacts
President Donald Trump reacted to the Treasury Department’s announcement. He hailed the move and said that the Biden rule was an “absolute disaster.”
Taking to Truth Social, Trump wrote, “Exciting news! The Treasury Department has announced that they are suspending all enforcement of the outrageous and invasive Beneficial Ownership Information (BOI) reporting requirement for U.S. Citizens. This Biden rule has been an absolute disaster for Small Businesses Nationwide. Furthermore, Treasury is now finalizing an Emergency Regulation to formally suspend this rule for American businesses. The economic menace of BOI reporting will soon be no more.”
What is the Corporate Transparency Act?
The Corporate Transparency Act is an anti-money laundering law that requires businesses to report their ownership structures to the Financial Crimes Enforcement Network (FinCEN), which the Treasury Department oversees. The act was signed into law in January 2021.
According to the U.S. Chamber of Commerce, “The CTA was enacted in 2021 to combat illicit activity including tax fraud, money laundering, and financing for terrorism by capturing more ownership information for specific U.S. businesses operating in or accessing the country’s market. Under the new legislation, businesses that meet certain criteria must submit a Beneficial Ownership Information (BOI) Report to the U.S. Department of Treasury’s Financial Crimes Enforcement Network (FinCEN). This report provides details identifying individuals who are associated with the reporting company.”
BOI encompasses details about people who own a company, directly or indirectly. According to Moody’s, “BOI helps you establish trust with legitimate businesses and business owners; contributes to understanding risk exposure in relation to, for example, higher risk jurisdictions, sanctioned individuals, or politically exposed persons; and it can help reveal when an entity sits outside risk-tolerance, so the relationship can be ended. BOI can also direct the level of monitoring required to limit risk and report issues efficiently.”
