FinCEN Issues Final Rule Regarding Access to Beneficial Ownership Information

December 21, 2023

The U.S. Department of the Treasury’s Financial Crimes Enforcement Network (FinCEN) on Dec. 21 issued a final rule that establishes the framework for access to and protection of beneficial ownership information (BOI).

According to FinCEN, the rule will help crack down on illicit finance activity and enhance corporate transparency. Issued pursuant to the bipartisan Corporate Transparency Act (CTA), this final rule prescribes the circumstances under which BOI reported in compliance with FinCEN’s Sept. 30, 2022, final BOI Reporting Rule may be disclosed to federal agencies (such as state, local, tribal and foreign governments; and financial institutions) and how it must be protected.

The rule provides access to BOI to federal agencies engaged in national security, intelligence or law enforcement activity; state, local and Tribal law enforcement agencies with court authorization; foreign law enforcement agencies, judges, prosecutors and other authorities that meet specific criteria, and the U.S. Department of the Treasury.

The rule also gives access to financial institutions with customer due diligence requirements and regulators supervising them for compliance with such requirements.

The final rule is the second of three rulemakings planned to implement the CTA. The first of these rulemakings, the BOI Reporting Rule, requires certain corporations, limited liability companies and other similar entities created or registered to do business in the United States to report information about their beneficial owners to FinCEN. Those reporting requirements take effect Jan. 1, 2024, the same day that FinCEN will launch its beneficial ownership information technology system to securely collect, process, and store that information. FinCEN will undertake a third rulemaking to revise FinCEN’s Customer Due Diligence rule, as required by the CTA.

The final rule regarding access to BOI is effective on February 20, 2024. Starting in 2024, FinCEN will begin to provide access to BOI in phases to authorized government agencies and financial institutions that meet the requirements of the final rule.

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