U.S. Treasury Halts Enforcement of Beneficial Ownership Reporting Rules

The U.S. Treasury Department has announced that it will not enforce the beneficial ownership (BOI) reporting requirement, an anti-money laundering (AML) regulation that mandates millions of business entities to disclose their true beneficial owners.

The Corporate Transparency Act, a Biden-era measure aimed at increasing corporate transparency, has faced legal challenges and opposition, particularly from the Trump administration, which argues that the rule places an undue burden on low-risk entities.

In a statement, the Treasury Department confirmed that it would not impose any penalties under the act on U.S. citizens or domestic reporting companies. “Treasury takes this step in the interest of supporting hard-working American taxpayers and small businesses,” the statement read, adding that the department intends to issue a rule narrowing the act’s scope primarily to foreign reporting companies.

U.S. Secretary of the Treasury Scott Bessent welcomed the decision, calling it “a victory for common sense.” He added, “[This] action is part of President Trump’s bold agenda to unleash American prosperity by reining in burdensome regulations, in particular for small businesses that are the backbone of the American economy.”

Supporters of the measure argue that the law was designed to address the increasing use of the United States as a haven for criminals to launder illicit funds.

The Treasury’s decision comes just days after President Trump nominated John Hurley, an asset manager and Stanford University lecturer, to lead the Treasury Department’s Office of Terrorism and Financial Intelligence (TFI).

The BOI rule has encountered significant resistance. Just last week, the Financial Crimes Enforcement Network (FinCEN), the Treasury’s AML enforcement unit, announced that it would not impose fines or take enforcement action against companies failing to meet the current March 21 deadline for filing BOI reports. While FinCEN confirmed that the deadline would be extended, it did not specify a new date. The original compliance deadline was set for January 2025 for most companies before a court challenge led to its extension to March 21. Now, further delays are expected following the Treasury’s latest decision.

By fLEXI tEAM