Advance notice of proposed rulemaking: Beneficial ownership information reporting requirements
Advance notice of proposed rulemaking
The Financial Crimes Enforcement Network (FinCEN) of the U.S. Treasury Department today released an advance notice of proposed rulemaking addressing the procedures and standards for “reporting companies” to submit information to FinCEN about their beneficial owners (the individual natural persons who ultimately own or control the reporting companies).
The advance notice of proposed rulemaking (ANPRM) [PDF 301 KB] seeks comments about providing FinCEN with beneficial ownership information as well as standards for FinCEN’s maintenance and disclosure of this beneficial ownership information.
The ANPRM will be published in the Federal Register on April 5, 2021. Written comments on the ANPRM must be received by a date that is 30 days after April 5, 2021.
Section 6403 of 31 U.S.C. (the Bank Secrecy Act) concerns the new beneficial ownership information reporting requirements.
Under the Corporate Transparency Act (CTA), part of the defense authorization legislation enacted in late December 2020, corporations, limited liability companies, and other similar entities formed or registered to do business in the United States are to report their beneficial owners to the Treasury Department within certain time periods. Read TaxNewsFlash
Section 6403 of Title 31 requires “reporting companies”—corporations, limited liability companies (LLCs), and similar entities, subject to certain statutory exemptions—to submit to FinCEN specified information on their beneficial owners, defined as the individual natural persons who own or control them, as well as specified information about the persons who form or register those reporting companies.
Section 6403 of Title 31 further requires FinCEN to maintain this information in a confidential, secure, and non-public database, and it authorizes FinCEN to disclose the information to certain government agencies for certain purposes specified in the CTA, and to financial institutions to assist in meeting their customer due diligence obligations. In both situations, these disclosures are subject to appropriate protocols to protect confidentiality.
The ANPRM seeks comment on numerous questions raised by the statutory language as FinCEN begins to develop proposed regulations implementing these provisions.
The regulations implementing the reporting requirements must be issued by January 1, 2022, with an effective date to be determined. FinCEN also is seeking comments regarding implementation of the related database maintenance use and disclosure provisions.
The ANPRM provides that the final rule on customer due diligence requirements for financial institutions will be the subject of a separate rulemaking, and that there will be made public a notice and opportunity to comment.
© 2022 KPMG LLP, a Delaware limited liability partnership and a member firm of the KPMG global organization of independent member firms affiliated with KPMG International Limited, a private English company limited by guarantee. All rights reserved.
For more detail about the structure of the KPMG global organization please visit https://home.kpmg/governance.
The KPMG name and logo are trademarks used under license by the independent member firms of the KPMG global organization. KPMG International Limited is a private English company limited by guarantee and does not provide services to clients. No member firm has any authority to obligate or bind KPMG International or any other member firm vis-à-vis third parties, nor does KPMG International have any such authority to obligate or bind any member firm. The information contained herein is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavor to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No one should act on such information without appropriate professional advice after a thorough examination of the particular situation. For more information, contact KPMG's Federal Tax Legislative and Regulatory Services Group at: + 1 202 533 4366, 1801 K Street NW, Washington, DC 20006.