In Dow Jones Risk Journal, Brendan Hanifin Discusses the Corporate Transparency Act and Reporting Requirements for Financial Institutions

In a new article in Dow Jones Risk Journal, international risk partner Brendan Hanifin discusses recent changes to Corporate Transparency Act (CTA) reporting requirements.

On March 21, the Financial Crimes Enforcement Network (FinCEN) published an interim final rule clarifying that only foreign reporting companies and their foreign beneficial owners must file beneficial ownership reports under the CTA, exempting United States entities and beneficial owners.

As the article reports, the CTA requires FinCEN to update the customer due diligence (CDD) rule for financial institutions no later than one year after the new beneficial ownership reporting requirements become effective. But the timing for the new rule now is unclear.

In the article, Brendan is quoted as saying, “For a good part of [2024], there was sort of a skepticism that the rule would ever come into effect. I think that stalls the momentum a bit and probably stalled the optimism of how much of a useful development this would be for banks facing know-your-customer obligations that reduce their burdens."

FinCEN is accepting public comments on the interim rule until May 27, with a final rule expected later this year.

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