In a landmark development, the Financial Crimes Enforcement Network (FinCEN) has unveiled the final rule on Beneficial Ownership Information (BOI) access, as mandated by the Corporate Transparency Act. Starting January 1, 2024, companies operating in or registered with the United States must meticulously report intricate details about their beneficial owners to FinCEN. This move marks a significant stride in the nation’s anti-money laundering initiatives.
The final rule, crafted in response to the Corporate Transparency Act, is designed to enforce stringent protocols that safeguard personally identifiable information (PII) submitted to FinCEN. The collected data will find a secure abode within the Beneficial Ownership Secure System, a nonpublic database established to fortify the nation’s financial integrity.
During the rule’s unveiling, FinCEN Director Andrea Gacki highlighted pivotal changes incorporated into the final rule, drawing distinctions from the proposed rule issued in December 2022. These alterations address concerns voiced by various stakeholders, focusing on the scope of financial institution access to BOI, limitations on offshore access, and streamlined procedures facilitating state, local, and tribal law enforcement’s access to BOI.
Gacki emphasized FinCEN’s unwavering commitment to creating a handy database for authorized BOI recipients while steadfastly guarding sensitive information against unauthorized disclosure. Noteworthy is Gacki’s assurance that the final rule does not alter existing obligations for financial institutions to collect BOI under FinCEN’s 2016 customer due diligence rule.
Navigating the complexity of this regulatory landscape, FinCEN plans to release two interagency statements elucidating the relationship between the access rule and the customer due diligence rule. Meanwhile, the U.S. House of Representatives passed H.R. 5119, known as the Protect Small Business and Prevent Illicit Financial Activity Act, seeking a one-year delay in the effective date of BOI reporting.
The American Institute of CPAs (AICPA) has been actively championing this cause, urging the Senate to align with the House’s decision. Citing a lack of timely guidance from FinCEN and a pervasive lack of awareness among small businesses, the AICPA believes a delay would provide essential breathing room for affected entities.
The AICPA’s engagement extends beyond mere advocacy. In February 2022, the organization submitted comments to FinCEN, emphasizing the considerable burden and cost imposed by BOI reporting requirements on an estimated 25 million small businesses, including small CPA firms.
As the Senate deliberates on H.R. 5119, the AICPA urges CPAs and tax professionals to engage with their senators actively before the December 31 deadline. FinCEN’s BOI webpage offers guidance and educational materials for businesses seeking clarity amidst these developments. The landscape of financial transparency is evolving, and stakeholders are urged to stay abreast of these crucial regulatory shifts.
Source ( Journal of Accountancy News).
