Compliance » Corporate Transparency Act Announced

Corporate Transparency Act Announced

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October 21, 2022

On Sept. 29, Secretary of the Treasury Janet L. Yellen released a statement after the announcement of a new rule on beneficial ownership reporting under the Corporate Transparency Act. She said it will give law enforcement and national security agencies “the information they need to crack down on criminals, corrupt individuals, and other bad actors who seek to take advantage of America’s financial system for illicit purposes,” and emphasized that it will bolster corporate transparency while minimizing the impact of compliance on honest businesses. The rule goes into effect on Jan. 1, 2024. O’Melveny partner AnnaLou Tirol, former deputy director of FinCEN, which issued the rule, notes that two more rules will follow, all arising out of the Anti-Money Laundering Act of 2020. She says it creates “a new requirement for millions of corporations, LLCs, and other entities.” They will have to gather names, addresses, birth dates, and other identifying information on their true owners, “a simple process for some, a much more complex assessment for others.” The Treasury Dept. estimates that approximately 32.6 million companies will have to report their beneficial owners to the U.S. government.

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