Treasury repeals ownership reporting rules for US companies
The US Treasury has finalised a rule exempting American companies and people from reporting beneficial ownership information to its financial crimes unit. The latest ruling from the Financial Crimes Enforcement Network repeals reporting requirements that were previously under the Corporate Transparency Act, which was signed by former president Joe Biden in 2021 to battle illicit activity…
The US Treasury has finalized a rule that exempts American companies and individuals from reporting beneficial ownership information to its financial crimes unit. The Financial Crimes Enforcement Network's latest decision repeals reporting requirements from the Corporate Transparency Act, which was signed by former President Joe Biden in 2021 to combat illicit activities like money laundering and terrorism financing.
Beneficial owners are defined as those who own or control at least 25% of a legal entity, or who have ultimate effective control over a legal person or arrangement. While foreign companies and pooled investment vehicles, such as hedge funds, will still report information on foreign owners, the updated rule exempts them from reporting Americans who assisted them in registering to do business in the US.
The Corporate Transparency Act, enacted as part of the Anti-Money Laundering Act of 2020, aimed to update US anti-money laundering laws. This decision marks a permanent implementation of an interim rule announced in March 2025, which suspended reporting requirements for US businesses and owners of foreign companies. Treasury officials stated that the final rule took into account the availability of alternative sources of information to mitigate risks associated with domestic entities.
Law enforcement and other authorities continue to have various tools to obtain information on domestic companies when investigating potential illicit activity. This move is part of broader deregulatory efforts by the Trump administration, with Treasury Secretary Scott Bessent noting that President Trump promised to cut red tape and that the final rule delivers.
The move has received mixed reactions, with the Republican-controlled US Senate banking committee praising Trump for standing up for job creators, while Senator Elizabeth Warren, the top Democrat on the committee, criticized the ruling as a "gift to cartels, criminals, and US adversaries that exploit shell companies."
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