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FinCEN Proposed Regulations to the CTA

| Legal Alert
Kelly M. Barry

Effective January 1, 2021, Congress passed the Corporate Transparency Act (CTA) which aims to prevent money laundering and other illicit activity by requesting additional, personal information from certain business owners. An overview of this law was discussed in an earlier Flaster Greenberg Legal Alert, linked here. At the end of 2021, the Financial Crimes Enforcement Network of the United States Department of Treasury (FinCEN) released proposed regulations to the CTA. All companies already in existence as of the effective date of the final regulations must provide the requested information one year thereafter. While the window for public review and comment for this round of proposed regulations closed on February 7, 2022, FinCEN has not announced when the next round of proposed regulations will be available for review.

After the final regulations become effective, all qualifying entities formed on or after their effective date must comply with the CTA’s disclosure requirements within fourteen (14) days of formation. FinCEN has not yet set the deadline or timeframe as to when final regulations should be released.

Following are notable takeaways of the proposed regulations:

As the proposed regulations are undergoing public comment and review, they are subject to change. For now, however, we have some insight as to which businesses will be impacted by the CTA’s reporting requirements.

If you or your business need legal advice, please consider contacting any member of Flaster Greenberg’s Business & Corporate Department.

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