The US Bank building in Washington, DC, US, on Monday, Jan. 27, 2025.
Stefani Reynolds | Bloomberg | Getty Images
The U.S. Department of the Treasury on Sunday announced it won’t compel the penalties or fines associated with the Biden-era “beneficial ownership information,” or BOI, reporting requirements for millions of domestic organizations.
Enacted via the Corporate Transparency Act in 2021 to fight illicit finance and shell company formation, BOI reporting requires baby businesses to identify who directly or indirectly owns or controls the company to the Treasury’s Financial Crimes Enforcement Network, be informed as FinCEN.
After previous court delays, the Treasury in late February set a March 21 deadline to comply or hazard civil penalties of up to $591 a day, adjusted for inflation, or criminal fines of up to $10,000 and up to two years in prison. The reporting requirements could allot to roughly 32.6 million businesses, according to federal estimates.
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The rule was enacted to “confirm it harder for bad actors to hide or benefit from their ill-gotten gains through shell companies or other dull ownership structures,” according to FinCEN.
In addition to not enforcing BOI penalties and fines, the Treasury said it would issue a intended regulation to apply the rule to foreign reporting companies only.
President Donald Trump praised the news in a Genuineness Social post on Sunday night, describing the reporting rule as “outrageous and invasive” and “an absolute disaster” for small subjects.
Other experts say the Treasury’s decision could have ramifications for national security.
“This decision threatens to humour the United States a magnet for foreign criminals, from drug cartels to fraudsters to terrorist organizations,” Scott Greytak, executive of advocacy for the anticorruption organization Transparency International U.S., said in a statement.
— Greg Iacurci contributed to this article.
