How does the US suspension of beneficial owner registers impact regulated companies?

On Sunday, March 2, 2025, it was announced that the United States had suspended the enforcement of the Corporate Transparency Act. That is, the American government in the current administration will not impose penalties or fines related to the beneficial ownership reporting rule under the current regulatory deadlines. Additionally, once the upcoming rule changes take effect, U.S. citizens, domestic reporting companies and their beneficial owners will remain exempt from enforcement actions.

As a refresher, The Corporate Transparency Act, signed into law in January of 2021 during the Biden Era, is an anti-money laundering law that directs businesses to report their ownership structures to the Financial Crimes Enforcement Network (FinCEN), which is overseen by the US Treasury Department, with the intention to curb money laundering, tax fraud, terrorism financing and shell company formation.

This basically means that the US government has stopped implementing public registers of company beneficial owners.

The suspension of the Corporate Transparency Act is a major setback to the transparency agenda.

Many working with financial crime prevention were looking forward to getting more transparency of beneficial owners from US companies since most acknowledge that it is a key element in fighting financial crime.

While the US government argues that it releases the US cooperates from a big administration burden, it does not change the requirement from regulated companies to collect information about beneficial owners and controlling persons.

This means that companies that need to collect beneficial ownership information will not have any official register to verify a US company's information. Therefore, other measures have to be taken to ensure verification. This will often mean a bigger effort for both the requesting and the replying company. And since no standards are available, it will likely mean a bigger effort for any KYC collection needs.

Without a public register, the burden of KYC will not go down. As someone working to make the Know Your Customer process easier for everyone, this means that we can’t rely too much on public data; we have to find other solutions to achieve our goals.

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Sources:

• https://home.treasury.gov/news/press-releases/sb0038

• https://home.treasury.gov/news/press-releases/jy1974

• https://apnews.com/article/treasury-beneficial-ownership-database-finance-bessent-trump-a903100907851cca1930511f96e9686d

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