Ownership Transparency Rules May Bring Growing Pains
White Collar Defense and Investigations attorney Eddie Jauregui spoke with Law360 about proposed regulations from the U.S. Department of the Treasury's Financial Crimes Enforcement Network (FinCEN) that aim to crack down on shell companies. Through the regulations, FinCEN seeks to create a database of the beneficial owners of corporate entities, and the rules include a broad definition of who qualifies as a "beneficial owner." Under the regulations, companies must report all beneficial owners, instead of disclosing a single individual. Mr. Jauregui explained these steps from FinCEN form part of the larger implementation of the Corporate Transparency Act (CTA), which in turn was passed by Congress as part of the Anti-Money Laundering Act of 2020.
"You can understand why they're asking that and why they want that information," he commented. "It services the overarching goal of the CTA, which is to increase transparency."