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© Reuters. FILE PHOTO: A bronze seal for the Department of the Treasury is shown at the U.S. Treasury building in Washington, U.S., January 20, 2023. REUTERS/Kevin Lamarque/File Photo
(Reuters) – Exciting news from the U.S. Treasury Department’s Financial Crimes Enforcement Network (FinCEN) on Thursday as it detailed its plan for granting access to new data about shell company ownership to certain government agencies, law enforcement, and financial firms.
Get ready, because in 2024, FinCEN will begin requiring certain companies to report beneficial ownership data, all part of an effort by lawmakers and the Treasury Department under President Joe Biden to crack down on corruption and money laundering.
The rule finalized on Thursday, following the 2021 passage of the Corporate Transparency Act, is a big step in the fight against illicit finance.
A year ago, FinCEN first proposed a plan for allowing access to the database – a trove of detailed financial data on companies created or doing business in the U.S. that has raised privacy concerns.
Who are beneficial owners, you ask? They are defined as anyone who has an ownership interest of 25% or more in a business, a majority of voting ownership, or someone who exerts “substantial control” over the entity.
Under the final plan, FinCEN said it will roll out access to the data first through a pilot program with a handful of government agencies, before broadening out access to other federal agencies and state, local, and tribal authorities.
And that’s not all – FinCEN will ultimately be able to share data with foreign governments and financial firms seeking it for customer due diligence, it said.
Treasury Secretary Janet Yellen is optimistic, stating, “This dirty money flowing in from all over the world undermines fair business competition and poses a risk to our country’s economic and national security,” she shared in a statement about the new rules. “Thanks to the new beneficial ownership framework, we’re making tremendous progress toward changing this.”