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AML & Financial Services Regulatory

United States: Beneficial Ownership Reporting, Part III

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Tax news and developments October 2022

In brief

On 29 September 2022, FinCEN released the final regulations regarding Beneficial Ownership Information Reporting Requirements (“Final Regulations“) which implement the beneficial ownership information reporting provisions of the Corporate Transparency Act (CTA). In our prior client alerts, Updates on Beneficial Ownership Reporting in the United States and Beneficial Ownership Reporting, Part II, we discussed the implications of the CTA and the Proposed Regulations. Here, we summarize the Final Regulations and draw special attention to the modifications that FinCEN made to the Proposed Regulations.

Background

On 29 September 2022, the Financial Crimes Enforcement Network (FinCEN) of the US Department of the Treasury (“Treasury“) released the final regulations regarding Beneficial Ownership Information Reporting Requirements (“Final Regulations“), which implement the beneficial ownership information reporting provisions of the Corporate Transparency Act (CTA). The CTA was passed in January 2021 and requires “Reporting Companies” to report to “FinCEN” information regarding the Reporting Company’s “Beneficial Owners” and “Company Applicants”.

The Final Regulations largely track the earlier proposed regulations issued by FinCEN on 8 December 2021 (“Proposed Regulations“) but include several changes regarding “Company Applicants” and the timing of reports that could be welcomed by businesses. The Final Regulations are effective 1 January 2024.

In our prior client alerts, Updates on Beneficial Ownership Reporting in the United States and Beneficial Ownership Reporting, Part II, we discussed the implications of the CTA and the Proposed Regulations. Below we summarize the Final Regulations and draw special attention to the modifications that FinCEN made to the Proposed Regulations.

Click here to access the full alert.

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Author

Glenn G. Fox is a partner of Baker McKenzie's Wealth Management and Tax Practice Groups in New York and a member of the firm’s Global Tax Wealth Management Steering Committee. He is a domestic and international tax, estate planning, and tax-exempt (charitable) organizations lawyer with vast experience working with closely held businesses, families and charitable organizations from the US and overseas. Glenn is a member of the American College of Trust and Estate Counsel and of the Society of Trust and Estate Practitioners and has been recognized for fourteen consecutive years (2007-2020) as a "New York Super Lawyer" by the New York Times.

Author

Lyubomir Georgiev has practiced law since 2003 in the United States and Switzerland. He has assisted banks, insurance companies, fiduciaries, family offices, asset managers, and high net worth individuals. Lyubomir participated in the negotiations of the special arrangements between the Government of the Principality of Liechtenstein and the UK on voluntary disclosure, tax compliance certification and tax information exchange. He heads the International Tax and Global Wealth Management practice in Zurich. Lyubomir has worked in Washington, DC and New York. Previously he was a member of the EMEA Wealth Management Steering Committee and Knowledge Management & Training head. Lyubomir is admitted to practice in Washington, DC, US Tax Court, England and Wales, and Switzerland as a foreign-qualified solicitor. He has been ranked in Chambers Global since 2012 as a foreign expert in practice areas such as UK tax and private clients, US private clients, and Liechtenstein tax and general business law.

Author

Marnin Michaels is a partner in Baker & McKenzie´s Zurich office. He has been practicing for more than 15 years in the areas of tax and international private banking and handles insurance matters relating to tax investigations and wealth management. He counsels clients on US withholding tax and qualified intermediary rule, as well as money laundering avoidance legislation. Mr. Michaels was a member of the firms Steering Committee leading the US Department of Justice Initiative for Swiss Banks. In the end, the firm acted for 45 banks and the project won litigation firm of the year by American Lawyer Magazine.

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