U.S. Treasury Revises Beneficial Ownership Rule

The U.S. Treasury has issued an interim final rule that amends the requirements for reporting beneficial ownership information. The change narrows the obligation to foreign entities, exempting U.S. companies and citizens. This follows the decision to halt enforcing the Corporate Transparency Act on domestic entities.

The U.S. Treasury announced a significant amendment to an anti-money laundering law on Wednesday by releasing an interim final rule that exempts U.S. entities from reporting beneficial ownership information. The narrowed scope now applies only to foreign entities, thus relieving U.S. companies and citizens from this regulatory burden.

This revision aligns with the Treasury's recent announcement that it will cease the enforcement of the 2021 Corporate Transparency Act for U.S. citizens and domestic entities. The Act was originally designed to enhance transparency and prevent illicit activities by revealing the identities behind corporate structures.

The Treasury's move is aimed at streamlining the regulatory landscape for domestic entities while maintaining strict oversight on foreign entities operating within or in association with the United States. The change reflects a strategic shift in focus to enhance compliance and enforcement where it matters most.

(With inputs from agencies.)