The Trump administration on Tuesday finalized a rule exempting U.S. companies and individuals from reporting beneficial ownership information to the Treasury Department's financial crimes unit, rolling back reporting requirements established under a 2021 law aimed at combating illicit finance.
The Treasury Department's Financial Crimes Enforcement Network, or FinCEN, will still require foreign reporting companies to disclose beneficial ownership information for foreign individuals, the department said in a statement.
"Treasury is eliminating a burdensome reporting requirement for millions of law-abiding business owners without compromising our national security," Treasury Secretary Scott Bessent said in the statement.
Beneficial owners are defined as anyone who has an ownership interest of at least 25% in a business or someone who exerts "substantial control" over the entity.
The move, first announced over a year ago, is part of a broader push by the administration of Republican President Donald Trump to curtail anti-corruption efforts.
Senator Elizabeth Warren, the top Democrat on the Senate Banking, Housing and Urban Affairs Committee, said rolling back the reporting requirements increased the risks of sanctions evasion, fraud and drug trafficking, as well as sex trafficking and organized criminal activity.
"This is a gift to cartels, criminals, and U.S. adversaries that exploit shell companies to move millions through our financial system," Warren said in a statement, adding that the law had required firms to fill out only basic identifying information about the true owners of a firm.
FinCEN had previously implemented rules requiring certain companies to report beneficial ownership data as part of anti-corruption and anti-money laundering efforts backed by lawmakers and the Treasury Department under former President Joe Biden.
The Treasury Department said that FinCEN will delete previously reported information by Americans from the government's beneficial ownership information database.
Under the rule finalized on Tuesday, foreign companies would not be required to report Americans who helped those foreign companies register to do business in the United States.
It also exempts foreign pooled investment vehicles registered in the United States from reporting the beneficial ownership information of a U.S. person in control of the investment vehicle, the Treasury Department said.
