Empire State Review Team 
Treasury Department Halts Enforcement of Beneficial Ownership Reporting Requirements
Published in Washington – The U.S. Treasury Department has announced a suspension of the enforcement of Beneficial Ownership Information (BOI) reporting rules affecting U.S. citizens and domestic businesses. This decision has been heralded by supporters as a victory for small business interests.
Overview of BOI Reporting
The BOI reporting requirement, introduced as part of the Corporate Transparency Act in 2021, mandates companies to disclose their beneficial ownership details to the Treasury’s Financial Crimes Enforcement Network (FinCEN). This obligation applies to entities that possess or control at least 25% of the ownership interests of a reporting company, along with any individuals who exert significant control over these entities.
Under these regulations, businesses were expected to provide personal information about their beneficial owners, including names, birthdates, and addresses. The overarching goal of this requirement was to combat financial crimes, such as money laundering, by reducing the use of anonymous shell companies.
Suspension of Enforcement
After extensive legal challenges, the Treasury Department has decided to pause the enforcement of penalties associated with the BOI reporting requirement. This includes suspending fines against U.S. citizens, domestic companies, and their beneficial owners, shifting focus solely towards foreign entities.
U.S. Secretary of Treasury, Scott Bessent, remarked that this directive is a step towards easing excessive regulations on small businesses, which are crucial to the U.S. economy. “Today’s action is part of President Trump’s bold agenda to unleash American prosperity,” he stated.
Reactions from Stakeholders
The decision has received a positive response from various groups. The National Small Business Association (NSBA) labeled the BOI reporting requirements as an undue burden on small businesses. In their statement, they emphasized the need for legislative solutions that would alleviate the regulatory pressure while effectively addressing the underlying issues of money laundering.
Conversely, proponents of the original BOI reporting measures, including some Democratic lawmakers and advocacy groups, argue that such disclosures are vital for law enforcement to crack down on illicit activities. They advocate for maintaining transparency within the business sector as a way to safeguard against criminal misuse of corporations.
