Last week, the Financial Crimes Enforcement Network of the Department of the Treasury adopted a final rule (the “Final Rule”) to implement the beneficial ownership reporting requirements of the Corporate Transparency Act, part of the Anti-Money Laundering Act of 2020.
This legislation requires a range of U.S. legal entities, and non-U.S. legal entities registered to do business in the United States, to report information on their underlying beneficial owners to FinCEN. The Final Rule provides for a January 1, 2024, effective date.
Every company or other legal entity that has been formed or does business in the United States, either directly or through subsidiaries, and their corporate and legal advisors, should review the CTA and the Final Rule to understand whether it will impose reporting requirements on them. Going forward, the requirements of the Final Rule will need to be considered in any type of financial or corporate transaction that involves the creation or acquisition of legal entities in the United States, with relevance for mergers and acquisitions, private equity and private funds, structured finance and restructurings, among others.
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