FinCEN updates beneficial ownership rules with UK legislation underway

Recently, the Financial Crimes Enforcement Network (FinCEN) has issued a final ruling regarding the reporting requirements for Beneficial Ownership Information (BOI). Beneficial ownership Information (“BOI”) is pursuant to the Corporate Transparency Act (CTA 2022). The Final Rule will require tens of millions of corporations and limited liability companies registered to do business in the United States to report their BOI to FinCEN, closing a large gap in the reporting of significant control in the US to crack down on illicit finance and enhance transparency.

In the UK, this will be mirrored in The Economic Crime and Corporate Transparency Bill, as currently undergoing its Second Reading under Bill 154 2022-23. The Act follows on from The Economic Crime (Transparency and Enforcement) Act (2022) passed earlier in the year which strengthened provisions to allow the government to move faster when imposing sanctions, create a register of overseas entities (ROE) to target foreign criminals using UK property to launder money and reformed the UK’s unexplained wealth order (UWO) regime. The Economic Crime and Corporate Transparency Bill aims to enact reforms to Companies House with reforms to prevent the abuse of limited partnerships. The Bill also includes additional powers to seize and recover suspected criminal cryptoassets. It also aims to give businesses more confidence to share information to tackle money laundering and other economic crime, whilst giving new intelligence gathering powers for law enforcement and removal of burdens on business.

In short, the new Act will clarify the provision and handling of Beneficial Information documentation in view of the Data Protection Act (2018) whilst strengthening the provisions of the Companies Act (2006) to regulate the information made available by companies.