FinCEN Eliminates Beneficial Ownership Reporting Requirements for U.S. Companies and U.S. Persons and Sets New Deadlines for Foreign Companies
On March 21, 2025, the Department of Treasury’s Financial Crimes Enforcement Network (“FinCEN”) issued an interim final rule under the Corporate Transparency Act (“CTA”) to eliminate the requirement for U.S. companies and U.S. persons to report any beneficial ownership information (“BOI”) to FinCEN under the CTA.
Under the interim final rule only foreign legal entities formed in a foreign country and registered to do business in the United States by filing with secretaries of state or similar offices (these entities are referred to herein as “foreign reporting companies”) are required to report BOI as reporting companies under the CTA. However, under the interim final rule foreign reporting companies are no longer required to report the BOI of any U.S. persons who are beneficial owners of the foreign reporting company and U.S. persons are exempt from having to provide such information to any foreign reporting company in which they are a beneficial owner. Accordingly, foreign reporting companies that only have beneficial owners that are U.S. persons will be exempt from the requirements to report any beneficial owners.
While the interim final rule does not substantially change the requirement for foreign reporting companies that registered to do business in the United States by filing with secretaries of state or similar offices before March 26, 2025, it does extend the deadline for such entities to file initial BOI reports and to update or correct previously filed BOI to April 25, 2025. In addition, on or after March 26, 2025, a foreign reporting company will be required to file an initial BOI report within 30 calendar days of the date it registered to do business in the United States by filing with secretaries of state or similar offices.
Although the interim rule is still subject to a comment period ending on May 27, 2025, the interim final rule became effective on March 26, 2025.
CTA UPDATE: FinCEN Issues Interim Final Rule Exempting Domestic Companies and US Beneficial Owners From Reporting Requirements
Go-To Guide:
Domestic companies and their beneficial owners are now exempt from the requirement to file beneficial ownership information (BOI) reports, or to update or correct previously filed BOI reports.
Foreign reporting companies that do not qualify for an exemption must report BOI by April 25, 2025, but need not report their U.S. beneficial owners.
The Financial Crimes Enforcement Network (FinCEN) is soliciting public comments on the interim final rule and intends to issue a final rule later this year.
On March 21, 2025, FinCEN issued an interim final rule narrowing the scope of the CTA’s BOI Reporting Rule (Reporting Rule) to foreign reporting companies and foreign beneficial owners. This change follows a series of shifts in the status of the CTA since Dec. 3, 2024,1 when a Texas district court in Texas Top Cop Shop, Inc. v. Bondi preliminarily enjoined the CTA and the Reporting Rule on a nationwide basis.
Going forward, entities formed in the United States (regardless of when) are categorically exempt from CTA reporting requirements and do not have to report BOI to FinCEN, nor update or correct any BOI that may previously have been reported to FinCEN.
Foreign reporting companies (i.e., entities formed in a foreign country that are registered to do business in the United States) that do not qualify for an exemption must file their BOI reports by no later than April 25, 2025. Newly registered foreign reporting companies will have 30 days from their registration in the United States to comply with BOI reporting requirements.
Notably, foreign reporting companies need not report the BOI of any beneficial owners who are U.S. persons (including U.S. persons who are beneficial owners of foreign pooled investment vehicles by virtue of their substantial control). U.S. beneficial owners are likewise exempt from having to report their BOI with respect to foreign reporting companies in which they hold interests.
The Interim Final Rule does not exempt reporting of U.S. persons who serve as company applicants for foreign reporting companies.2
The Interim Final Rule significantly reduces the number of entities subject to BOI reporting. FinCEN now estimates approximately 12,000 reporting companies must comply with the CTA and its implementing regulations—down from the 32.6 million projected under the previous rule.
Looking Ahead
FinCEN is accepting comments on the Interim Final Rule until May 27, 2025. A final rule is expected to be issued later this year. The Interim Final Rule, with its narrower scope of reporting requirements, will be in effect in the meantime.
Foreign reporting companies should prepare to comply with the CTA and the Reporting Rule, as amended by the Interim Final Rule. Interested parties may also consider submitting written comments to FinCEN by the May 27, 2025, deadline. Additionally, all companies should stay updated on FinCEN announcements, including with respect to the final rule.
It remains to be seen whether the Interim Final Rule will be the subject of any legal challenges. In the appeal pending in the Texas Top Cop Shop challenge, the Fifth Circuit has asked for supplemental briefing on whether the dispute remains live in light of the Interim Final Rule.
For additional information regarding the CTA and its reporting requirements, visit GT’s CTA Task Force page.
1 On Dec. 3, 2024, the CTA and its Reporting Rule were preliminarily enjoined on a nationwide basis, approximately four weeks ahead of a key Jan. 1, 2025, deadline. FinCEN appealed that ruling, and on Dec. 23, 2024, a motions panel of the U.S. Court of Appeal for the Fifth Circuit stayed the injunction, allowing the CTA to go back into effect. Three days later, on Dec. 26, 2024, a merits panel of the Fifth Circuit vacated the motion panel’s stay, effectively reinstating the nationwide preliminary injunction against the CTA and Reporting Rule. On Dec. 31, 2024, the government filed an emergency application with the U.S. Supreme Court to stay that preliminary injunction. On Jan. 23, 2025, the Supreme Court granted that application (SCOTUS Order), staying the nationwide preliminary injunction in Texas Top Cop Shop, Inc. v. Bondi. See McHenry v. Texas Top Cop Shop, Inc., 145 S. Ct. (2025). Then, notwithstanding the SCOTUS Order staying the injunction in Texas Top Cop Shop, on Jan. 24, 2025, FinCEN confirmed that reporting companies were not required to file BOI Reports with FinCEN due to the separate nationwide relief entered in Smith v. U.S. Department of the Treasury (and while the order in Smith remained in effect). No. 6:24-CV-336-JDK, 2025 WL 41924 (E.D. Tex. Jan. 7, 2025). On Feb. 5, 2025, the government appealed the ruling in Smith to the U.S. Court of Appeals for the Fifth Circuit and asked the District Court to stay relief pending that appeal. On Feb. 18, 2025, the District Court in Smith granted a stay of its preliminary injunction pending appeal, thereby reinstating BOI reporting requirements once again. In response, on Feb. 19, 2025, FinCEN announced that the new filing deadline to file an initial, updated, and/or corrected BOI report was generally March 21, 2025. On March 2, the U.S. Department of the Treasury issued a press release announcing that it will not enforce any penalties or fines under the CTA against U.S. citizens, domestic reporting companies, or their beneficial owners under the current Reporting Rule or after the forthcoming rule changes take effect.
2 A company applicant, in this context, would be (a) the person who directly files the document that registers the company in a U.S. state; and (b) if more than one person is involved with the document’s filing, the person who is primarily responsible for directing or controlling the filing.
US Treasury Issues Interim Final Rule That Removes the Requirement for US Companies and US Persons To Report Beneficial Ownership Information to Fincen Under the Corporate Transparency Act
The Financial Crimes Enforcement Network (FinCEN) announced on March 21, 2025, that FinCEN had issued its Interim Final Rule that provides that FinCEN will not require US companies and US persons to report beneficial ownership information (BOI) to FinCEN under the Corporate Transparency Act (CTA).
In the Interim Final Rule, FinCEN revised the definition of “reporting company” in its implementing regulations to mean only those entities that are formed under the law of a foreign country and that have registered to do business in any US State or Tribal jurisdiction by the filing of a document with a secretary of state or similar office (formerly known as “foreign reporting companies”). FinCEN also exempts entities previously known as “domestic reporting companies” from BOI reporting requirements.
Thus, through this Interim Final Rule, all entities created in the United States — including those previously known as “domestic reporting companies” — and their beneficial owners will be exempt from the requirement to report BOI to FinCEN. Foreign entities that meet the new definition of a “reporting company” and do not qualify for an exemption from the reporting requirements must report their BOI to FinCEN under new deadlines, to be determined following receipt of comments from the public and publication in the Federal Register. These foreign entities, however, will not be required to report any US persons as beneficial owners, and US persons will not be required to report BOI with respect to any such entity for which they are a beneficial owner.
The Interim Final Rule will be effective immediately. In accordance with the Congressional Review Act, FinCEN has determined that “FinCEN for good cause finds that providing public notice or allowing for public comment before this Interim Final Rule takes effect is impracticable, unnecessary, and contrary to the public interest.”
The Interim Final Rule may be reviewed here.
While the March 21st, 2025, Interim Final Rule eliminates the CTA’s reporting requirements for “domestic reporting companies” and US persons, FinCEN could conceivably reverse or further revise such modifications with limited or no prior notice or comment. While this is not anticipated at this time under the current administration, companies and practitioners should continue to monitor CTA developments. The CTA also remains subject to various legal challenges.
For more information, click here.
Alexander Lovrine contributed to this post.
Global Focus on Anti-Corruption Increases
While the United States has announced a pause on Foreign Corrupt Practices Act enforcement, the rest of the world is increasing its focus on prosecuting corrupt activities. This is a reminder to companies with a global footprint, including those headquartered in the U.S. that may not have physical operations overseas, that foreign activities likely fall under jurisdictions where foreign bribery and corruption are still enforcement priorities with sizeable penalties.
On March 20, 2025, the United Kingdom’s Serious Fraud Office, France’s Parquet National Financier and the Office of the Attorney General of Switzerland announced a new anti-corruption alliance, the International Anti-Corruption Prosecutorial Taskforce, affirming their shared commitment to addressing international bribery and corruption and strengthen cross-border collaboration. The announcement noted that all three countries have wide-reaching anti-bribery legislation with jurisdiction to prosecute criminal conduct, even if that activity occurs overseas, provided there is a link to the prosecuting country. The Taskforce’s founding statement may be found here.
What Every Multinational Company Needs to Know About … Criminal Enforcement of Trade, Import, and Tariff Rules: A Growing Risk for Businesses
In less than 100 days, the Trump administration has implemented a dizzying array of new tariffs, significantly increasing costs and complexity for U.S. importers. The administration is keenly aware that companies operating in this high-tariff environment may attempt creative, or even fraudulent, strategies to minimize tariff payments. Consequently, enforcement agencies have been directed to closely monitor and vigorously prosecute efforts at improper tariff engineering and duty evasion.
Historically, U.S. Customs and Border Protection (CBP) has relied heavily on its administrative remedies to enforce the customs and tariff laws. The Department of Justice (DOJ), however, has been steadily escalating enforcement intensity, notably through the False Claims Act (FCA), leveraging its treble damages and civil penalties to pursue false statements about imports. For a more detailed explanation of how the FCA has been used in this area, please see our recent blog post, “What Every Multinational Company Should Know About … The Rising Risk of Customs False Claims Act Actions in the Trump Administration.”
DOJ also has demonstrated a growing willingness to pursue criminal charges against companies and individuals involved in customs fraud schemes such as the purposeful misclassification of goods, falsifying country-of-origin declarations, and intentionally shipping goods through low-tariff countries. Importers of goods into the U.S. should expect criminal enforcement to accelerate in the coming months and years.
Potential Criminal Charges for Violating Customs Rules
DOJ has several available charging options in pursuing criminal cases against companies and individuals who violate customs rules by making false statements about customs requirements such as classification, country of origin, valuation, assists, and free trade preferences. Commonly used federal criminal statutes that could apply to tariff underpayments include:
Smuggling (18 U.S.C. § 545), which criminalizes knowingly and willfully importing merchandise into the U.S., contrary to law (e.g., misclassification or mislabeling to evade duties), and is typically used when importers intentionally misrepresent goods’ classification or origin to avoid or lower tariffs, often proven through seized documents or intercepted communications. This provision already has been applied in United States v. Esquijerosa, where an importer was charged with routing Chinese-origin goods through third countries to avoid tariffs, resulting in a December 6, 2024, guilty plea under the general conspiracy statute.
False Claims (18 U.S.C. § 287), which criminalizes knowingly making false, fictitious, or fraudulent claims to federal authorities and is used where importers knowingly provide false documentation or declarations to CBP concerning country-of-origin, valuation, related parties, or classification while paying improperly low customs or anti-dumping duties.
False Statements (18 U.S.C. § 1001), which criminalizes knowingly making materially false, fictitious, or fraudulent statements or representations to federal authorities and is frequently applied where importers intentionally provide false documentation or declarations to CBP concerning country-of-origin, valuation, related parties, or classification.
Wire Fraud (18 U.S.C. §§ 1343 & 1349), which criminalizes schemes to defraud involving interstate or foreign wire communications (such as emails or wire transfers) and can be applied to customs violations due to the prevalent use of electronic communications and financial transfers in import transactions, providing prosecutors leverage in complex schemes.
International Emergency Economic Powers Act (IEEPA) (50 U.S.C. § 1701), which criminalizes the willful evasion or violation of regulations issued under national emergency declarations concerning international commerce and could apply where importers deliberately evade tariffs or restrictions enacted under presidential authority during declared emergencies, such as recent trade actions involving China.
Conspiracy (18 U.S.C. § 371), which criminalizes any agreement between two or more persons to commit any of the above crimes.
Examples of Past Customs-Related Criminal Cases Brought by DOJ
Criminal prosecutions based on violations of customs rules do not require DOJ to break new ground. Here are a few significant criminal trade cases:
Plywood Tariff Evasion Case (2024): A Florida couple was charged under the Lacey Act and received 57-month prison sentences for evading approximately $42.4 million in customs duties. They fraudulently declared Chinese plywood as originating from Malaysia or Sri Lanka, avoiding anti-dumping duties exceeding 200%.[1]
Stargate Apparel (2019): DOJ filed criminal and civil charges against the CEO of a children’s apparel company, Stargate Apparel, Inc. The CEO was charged with participating in a years-long scheme to defraud CBP by submitting invoices that falsely understated the true value of the goods imported by his company into the United States.[2]
Food Importation Fraud (2013): Several individuals and two food processing companies were criminally charged for illegally importing a Chinese-origin food product by intentionally mis-declaring its origin and classification as Vietnamese. Through complex transshipment methods, the defendants sought to evade over $180 million in anti-dumping duties.
Fentanyl Precursors (2025): Indian chemical firms Raxuter Chemicals and Athos Chemicals faced criminal charges for smuggling precursor chemicals used in fentanyl production into the U.S. and Mexico, employing extensive false declarations to evade detection.[3]
How Customs Violations or Underpayments Come to DOJ’s Attention
Customs violations can come to DOJ’s attention through several channels:
CBP Referrals: CBP’s Automated Commercial Environment (ACE) uses sophisticated algorithms capable of identifying anomalies, suspicious patterns, or misrepresentations in import data. Fraudulent conduct will result in a referral by CBP to DOJ — similar to Health and Human Services’ very successful data mining tools, which have led to numerous civil and criminal fraud cases.
Voluntary Disclosures: Although CBP encourages self-reporting, prior voluntary disclosures can expose intentional misconduct, triggering criminal investigations.
Whistleblower Reports: Claims filed by employees or competitors under the FCA or reports submitted via CBP’s e-Allegations Program or the Enforce and Protect Act (EAPA) portal often reveal duty evasion schemes, prompting DOJ intervention. Several plaintiff-side FCA law firms are touting their experience in customs and trade cases, and we anticipate referral activity in this space to increase.
Navigating Increased Enforcement and Mitigating Risk
Criminal enforcement of CBP regulations presents significant risk for companies that serve as importers of record, who are responsible under CBP regulations for ensuring the complete and accurate submission of import data. In this new trade environment, there will be an increasing emphasis by CBP to detect importers attempting to make end-runs around higher tariffs, particularly from China.
Risk mitigation involves a thorough review of the company’s ACE data to assess the company’s importing patterns, focusing particularly on imports targeted for increased tariffs by the Trump administration. Companies also should evaluate the current state of their customs compliance to confirm consistent and robust procedures for classification, origin determination, valuation, and recordkeeping, to ensure that reasonable care in being used in import operations, and should consider preparing “reasonable care” memoranda to memorialize their treatment of how they are handling tariff-related obligations. Finally, importers should establish post-entry checks and reviews to ensure that they can correct any entry-related information submitted to Customs before it becomes final at liquidation. This is especially important in the context of a high-tariff environment, where potential penalties for underpayment of tariffs are vastly greater. Foley’s international trade team has developed a six-step tariff risk management plan, accessible here: “Managing Import and Tariff Risks During a Trade War.”
[1] U.S. Department of Justice (DOJ), Florida Conspirators Sentenced to Nearly Five Years in Prison Each for Evading Over $42 million in Duties when Illegally Importing and Selling Plywood, (Feb. 15, 2024), https://www.justice.gov/usao-sdfl/pr/florida-conspirators-sentenced-nearly-five-years-prison-each-evading-over-42-million
[2] U.S. Department of Justice (DOJ), Manhattan U.S. Attorney Announces Criminal And Civil Charges Against CEO Of Clothing Company For Million-Dollar Customs Fraud (June 6, 2019), https://www.justice.gov/usao-sdny/pr/manhattan-us-attorney-announces-criminal-and-civil-charges-against-ceo-clothing-company.
[3] U.S. Department of Justice (DOJ), Two Indian Chemical Companies and a Senior Executive Indicted for Distributing Fentanyl Precursor Chemicals (Jan. 6, 2025), https://www.justice.gov/usao-sdny/pr/manhattan-us-attorney-announces-criminal-and-civil-charges-against-ceo-clothing-company; see also Associated Press, 2 Indian Companies Charged with Smuggling Chemicals Used in Making Fentanyl (Jan. 6, 2025), https://apnews.com/article/indian-chemical-companies-charged-fentanyl-opioid-smuggling-d2cfbc05f0742953e35a05cd0c889dc3
FinCen Issues a Huge Reprieve Form Domestic Reporting Companies
O frabjous day! the Financial Crimes Enforcement Network (FinCEN) late last Friday issued an interim final rule that removes the requirement for U.S. companies and U.S. persons to report beneficial ownership information (BOI) to FinCEN under the Corporate Transparency Act (CTA). Here is the FinCEN’s summary:
In that interim final rule, FinCEN revises the definition of “reporting company” in its implementing regulations to mean only those entities that are formed under the law of a foreign country and that have registered to do business in any U.S. State or Tribal jurisdiction by the filing of a document with a secretary of state or similar office (formerly known as “foreign reporting companies”). FinCEN also exempts entities previously known as “domestic reporting companies” from BOI reporting requirements.
Thus, through this interim final rule, all entities created in the United States — including those previously known as “domestic reporting companies” — and their beneficial owners will be exempt from the requirement to report BOI to FinCEN. Foreign entities that meet the new definition of a “reporting company” and do not qualify for an exemption from the reporting requirements must report their BOI to FinCEN under new deadlines, detailed below. These foreign entities, however, will not be required to report any U.S. persons as beneficial owners, and U.S. persons will not be required to report BOI with respect to any such entity for which they are a beneficial owner.
Upon the publication of the interim final rule, the following deadlines apply for foreign entities that are reporting companies:
Reporting companies registered to do business in the United States before the date of publication of the IFR must file BOI reports no later than 30 days from that date.
Reporting companies registered to do business in the United States on or after the date of publication of the IFR have 30 calendar days to file an initial BOI report after receiving notice that their registration is effective.
The CTA has been proven to be a costly disaster that has imposed unnecessary costs on small businesses that are no doubt cheering Friday’s announcement.
FinCEN Removes Beneficial Ownership Reporting Requirements for U.S. Companies and U.S. Persons, Sets New Deadlines for Foreign Companies
On March 21, 2025 the Financial Crimes Enforcement Network (FinCEN) issued an interim final rule that removes the requirement for U.S. companies and U.S. persons to report beneficial ownership information (BOI) to FinCEN under the Corporate Transparency Act (CTA).
Going forward, only foreign companies (not U.S. companies owned by non-U.S. persons) that have registered to do business in the U.S. will be required to comply with the CTA.
Foreign entities that meet the new definition of a “reporting company” and do not qualify for an exemption from the reporting requirements must report their BOI to FinCEN under new deadlines, detailed below. These foreign entities, however, will not be required to report any U.S. persons as beneficial owners, and U.S. persons will not be required to report BOI with respect to any such entity for which they are a beneficial owner.
The following deadlines apply for foreign entities that are reporting companies:
Reporting companies registered to do business in the United States before March 21, 2025, must file BOI reports no later than 30 days from that date.
Reporting companies registered to do business in the United States on or after March 21, 2025, have 30 calendar days to file an initial BOI report after receiving notice that their registration is effective.
CTA 2.0 – FinCEN Limits CTA’s Reporting Requirements to Certain Non-U.S. Entities and Non-U.S. Individuals
The Financial Crimes Enforcement Network (FinCEN) issued an interim final rule on March 21, 2025, that eliminates the Corporate Transparency Act (CTA) reporting requirements for U.S. entities and U.S. individuals. The rule is effective upon its publication in the federal register; however, the interim final rule may be updated following a sixty-day comment period.
FinCEN’s press release provided the following summary of the impact of the interim final rule:
“Thus, through this interim final rule, all entities created in the United States — including those previously known as “domestic reporting companies” — and their beneficial owners will be exempt from the requirement to report BOI to FinCEN. Foreign entities that meet the new definition of a “reporting company” and do not qualify for an exemption from the reporting requirements must report their BOI to FinCEN under new deadlines, detailed below. These foreign entities, however, will not be required to report any U.S. persons as beneficial owners and U.S. persons will not be required to report BOI with respect to any such entity for which they are a beneficial owner.”
Non-U.S. entities that meet the definition of “reporting company” are generally (1) formed in a non-U.S. jurisdiction and (2) registered with a U.S. jurisdiction to do business in such jurisdiction. These non-U.S. entities will have thirty days from the later of (i) the date of publication of the interim final rule in the federal register and (ii) the date of becoming registered to do business in a U.S. jurisdiction.
Removing the reporting obligations of U.S. entities and U.S. individuals substantially limits the number of required filings. By FinCEN’s own estimate in the interim final rule, it anticipates roughly 12,000 filings annually (over each of the first three years). In the final reporting rule in effect prior to the interim final rule, FinCEN estimated roughly 10,510,000 filings annually (over each of the first five years).
UK, France, and Switzerland Form International Anti-Corruption Prosecutorial Task Force to Combat Anti-Corruption
On February 5, 2025, Attorney General Pamela Bondi issued a memo requiring DOJ’s Foreign Corrupt Practice Act (“FCPA”) Unit to “prioritize investigations related to foreign bribery that facilitates the criminal operations of cartels and Transnational Criminal Organizations (TCOs),” and to “shift focus away from investigations and cases that do not involve such a connection.” On February 10, 2025, the Trump administration issued an executive order directing a pause on initiation of new FCPA enforcement, a review of all existing FCPA investigations or enforcement, and updated guidelines or policies on new FCPA matters going forward.
On February 21, when we discussed the implications of these policy changes, we predicted that foreign regulators may step up enforcement to fill the perceived vacuum in domestic anti-corruption enforcement. On March 20, 2025, the UK’s Serious Fraud Office (SFO), France’s Parquet National Financier (PNF) and the Office of the Attorney General of Switzerland (OAG) formed the “International Anti-Corruption Prosecutorial Task Force” (the “Task Force”) to pool resources on strategic priorities, cooperation, and “operational collaboration.” The Task Force also stated that it would “invite other like-minded agencies” to join. Equipped with a Leaders’ Group, facilitating “the regular exchange of insight and strategy,” and a Working Group, for “devising proposals for co-operation on cases,” SFO Director Nick Ephgrave reported that the Task Force should help ensure “there is no daylight between our agencies,” preventing criminals from taking advantage of any potential gaps between partner enforcement authorities. While not in direct response to the administration’s recent shift in FCPA enforcement priorities as planning for the Task Force was already underway, the message is clear that the SFO, PNF, and OAG are seeking collaboration and partnership to most effectively and efficiently combat cross-border corruption, leaving the door open for other agencies to join.
The Task Force demonstrates a renewed commitment to tackling international bribery and corruption. Many of these foreign agencies, such as the French Anti-Corruption Agency (Agence française anticorruption or AFA), publish Guidelines in English that detail compliance policies, enforcement priorities, and objectives. Other countries also have enforceable anti-bribery and anti-corruption regulations. As we reported, compliance still matters and the Task Force is the latest demonstration of that fact. Companies operating in relevant jurisdictions should be mindful of these latest enforcement activities, their impact on cross-border investigations, and continue to evaluate and enhance their corporate compliance programs.
Corporate Transparency Act 2.0 – Narrowing Reporting Requirements
On March 21, 2025, the Financial Crimes Enforcement Network (“FinCEN”) issued an interim final rule that significantly changes the reporting requirements under the Corporate Transparency Act (“CTA”). This alert summarizes the key changes to the reporting requirements and what they mean for your business.
Key Takeaways
Domestic companies1 are now exempt from all reporting requirements.
Foreign companies and foreign pooled investment vehicles no longer need to report U.S. person beneficial owners2 (but will need to report any non-U.S. person beneficial owners).
Compliance is still effectively voluntary as FinCEN has announced it will not be enforcing penalties and this rule is not yet effective.
Exemption for Domestic Companies
All domestic reporting companies are now completely exempt from the requirement to:
File initial beneficial ownership information (“BOI”) reports.
Update previously filed BOI reports.
Correct previously filed BOI reports.
FinCEN states that this reduction of requirements will eliminate the substantial compliance burdens for millions of U.S. businesses whose information would not be “highly useful” in the efforts to “detect, prevent, or prosecute money laundering, the financing of terrorism of terrorism, proliferation finance, serious tax fraud, or other crimes.”3
Changes for Foreign Companies
Foreign companies still must report beneficial ownership information, but with two important exemptions:
Foreign companies are exempt from reporting beneficial ownership information for any U.S. persons who are beneficial owners.
U.S. persons are exempt from providing their beneficial ownership information to foreign companies.
Foreign companies with only U.S. beneficial owners will not need to report any beneficial owners.
Changes for Foreign Pooled Investment Vehicles
Foreign pooled investment vehicles now only need to report:
Non-U.S. individuals who exercise substantial control over the entity (not an individual who has the greatest authority over the strategic management of the entity).
If multiple non-U.S. individuals exercise control, only the non-U.S. person with the greatest authority must be reported.
Foreign pooled investment vehicles with only U.S. beneficial owners will not need to report any beneficial owners.
Extended Deadline
Foreign reporting companies and pooled investment vehicles will have until the later of 30 days after this rule is published in the federal register, or 30 days after their registration to do business in the United States.
Next Steps
FinCEN is accepting comments on this interim final rule. The agency will assess these exemptions based on public comments and plans on issuing a final rule later this year.
1 See our prior advisories on the general application of the CTA and its specific application for those with entities for estate planning purposes for information on what is a domestic reporting company, a foreign reporting company, and beneficial owner information.
2 As a reminder, generally a beneficial owner is any individual who (directly or indirectly) (a) exercises substantial control over the company or (b) owns or controls at least 25% of the company’s ownership interests.
3 Please see full rule and explanation from FinCEN here.
FinCEN’s New Interim Final Rule (1) Exempts Domestic Companies from Corporate Transparency Act Reporting and (2) Sets New Deadlines for Reporting by Foreign Companies
On March 21, 2025, the Financial Crimes Enforcement Network (FinCEN) of the U.S. Department of Treasury (Treasury) significantly limited the scope of reporting required under the Corporate Transparency Act (CTA).[1] “Domestic reporting companies” (now referred to as “domestic entities”) are exempt from reporting beneficial ownership information. Instead, “reporting companies” are limited to those entities previously defined as “foreign reporting companies.” Even as to foreign reporting companies, beneficial ownership information as to any U.S. person[2] need not be reported.
FinCEN will also apply the exemption and deadline extension as of March 21, 2025, in advance of publication in the Federal Register.
This approach is consistent with the announcements from FinCEN on February 27, 2025, and from Treasury on March 2, 2025. See our alerts dated March 4, 2025, Treasury May Be Shifting CTA Reporting Rule Away from Domestic and Toward Foreign Reporting Companies: Miller Canfield, and February 28, 2025, FinCEN Again Delays CTA Reporting Deadlines and Suspends Enforcement: Miller Canfield.
Here is a summary of the most significant amendments to the Reporting Rule:
Changes the definition of “reporting company” to include only a foreign entity (previously a “foreign reporting company”).[3]
Adds a new exemption from the definition of “reporting company” for any “domestic entity” (previously a “domestic reporting company”), thereby removing all domestic entities and their beneficial owners from the scope of any CTA initial reporting, correction, or update requirements.[4]
Exempts (foreign) reporting companies from reporting beneficial ownership information with respect to any U.S. person beneficial owners. Thus, a foreign reporting company that has only U.S. person beneficial owners will be exempt from reporting any beneficial owners.
Exempts U.S. persons from having to provide beneficial ownership information to any foreign reporting company as to which they are beneficial owners.
Revises a special rule applicable to “foreign pooled investment vehicles” to exempt such investment vehicles from having to report beneficial ownership information of U.S. persons who exercise substantial control over the entity.
Sets new reporting deadlines for foreign entities that are reporting companies as follows:
Initial reports:
Reporting companies that that were registered to do business in the U.S. before March 21, 2025 must file beneficial ownership information reports no later than April 20, 2025.
Reporting companies that that were registered to do business in the U.S. on or after March 21, 2025 must file beneficial ownership information reports no later than 30 calendar days of the earlier of (i) the date the reporting company receives actual notice that its registration is effective, or (ii) the date on which a secretary of state or similar office provides public notice that the reporting company has been registered to do business.
Updated reports: The deadline for reporting any change to required information previously submitted, is the later of (i) April 20, 2025, or (ii) 30 calendar days after the change occurs.
Corrected reposts: The deadline for reporting any change to required information previously submitted, is the later of (i) April 20, 2025, or (ii) 30 calendar days after the reporting company becomes aware or has reason to know change occurs.
[1] New interim final rule (“IFR”) available at: Beneficial Ownership Information Reporting Requirement Revision and Deadline | FinCEN.gov. The Reporting Rule, as amended, is available at: https://www.federalregister.gov/documents/2022/09/30/2022-21020/beneficial-ownership-information-reporting-requirements
[2] The CTA refers to the definition of United States person as set forth in Section 7701(a)(30) of the Internal Revenue Code of 1986) which includes U.S. citizens and lawful permanent residents, among others. 26 U.S. Code § 7701 – Definitions | U.S. Code | US Law | LII / Legal Information Institute.
[3] The new “reporting company” definition in the IFR is “[a]ny entity that is: (A) a corporation, limited liability or other entity; (B) formed under the law of a foreign country; and (C) registered to do business in any State or tribal jurisdiction by the filing of a document with the secretary of state or any similar office under the law of that state or Indian tribe.”
[4] The new “domestic entity” definition in the IFR is “[a]ny entity that is: (A) corporation, limited liability company or other entity; and (B) created by the filing of a document with a secretary of state or any similar office under the law of a State of Indian Tribe.”
New York AG Settles with School App
The New York Attorney General recently entered into an assurance of discontinuance with Saturn Technologies, operator of an app used by high school and college students. The app was designed to be a social media platform that assists students with tracking their calendars and events. It also includes connection and social networking features and displayed students’ information to others. This included students’ location and club participation, among other things. According to the NYAG, the company had engaged in a series of acts that violated the state’s unfair and deceptive trade practice laws.
In particular, according to the attorney general, although the app said that it verified users before allowing them into these school communities, in fact anyone could join them. Based on the investigation done by the AG, the majority of users appeared not to have been verified or screened to block fraudulent accounts. In other words, accounts that were not those of students at the school. This was a concern, stressed the AG, as the unverified users had access to personal information of students. The AG argued that these actions constituted unfair and deceptive trade practices.
Finally, the AG alleged that the company did not make it clear that “student ambassadors” (who promoted the program) received rewards for marketing the program. As part of the settlement, the app maker has agreed to create and train employees and ambassadors on how to comply with the FTC’s Endorsements Guides by, among other things, disclosing their connection to the app maker when discussing their use of the app.
Putting It Into Practice: This case is a reminder to review apps directed to older minors not only from a COPPA perspective (which applies to those under 13). Here, the NYAG has alleged violations stemming from representations that the company made about the steps it would take to verify users. It also signals expectations in New York for protecting minors if offering a social media platform intended only for that market.
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