Yesterday, the Financial Crimes Enforcement Network (FinCEN), a component of the U.S. Department of the Treasury, released a final rule implementing the landmark Corporate Transparency Act (CTA), the monumental anti-corruption legislation passed in 2020. This rule, which incorporates the suggestions CREW offered in comments throughout the rulemaking process, establishes the regulatory regime that the Treasury Department will use to obtain beneficial ownership information from all United States corporations. This is a monumental task that, when accomplished, will help law enforcement transform the United States from the premier jurisdiction in the world for corporate secrecy, into one of the world leaders in fighting financial corruption. CREW previously called on FinCEN to seize this moment and “develop the bold and comprehensive regulatory framework necessary to address our country’s disastrously deficient and outdated corporate transparency regime.” FinCEN has now done so. The final rule, which is now part of the U.S. Code of Federal Regulations, is a triumph, a testament to all the work advocates have put in over the years, and to the Biden administration’s commitment to fighting corruption.
CREW has been involved throughout this process: we provided Congress with technical advice on the CTA as it was being constructed and passed, we submitted comments as FinCEN went through its rulemaking process, and we have repeatedly and publicly advocated for broad implementation. In its final regulation, FinCEN agreed in all respects with CREW’s various comments—comments that were echoed by various partner advocacy organizations like the FACT Coalition and Transparency International. CREW called on FinCEN not to weaken the definition of beneficial owner. FinCEN did not. CREW called on FinCEN not to add any additional exemptions to its reporting requirements. FinCEN did not. And generally, CREW called on FinCEN to adopt its strong proposed rule largely as written. And FinCEN did.
FinCEN’s final rule will take effect in January 2024. But even now as we await implementation it sends a message to the world: the United States is finally fighting back against global corruption. And this rule is just the first step. FinCEN is currently writing another rule that would apply anti-corruption laws to the real estate industry, another crucial effort to reign in an industry rife with corrupt and illegal money. And Congress is considering another landmark piece of legislation, the Establishing New Authorities for Businesses Laundering and Enabling Risks to Security (ENABLERS) Act, which would apply common sense anti-corruption measures to the gatekeepers to the United State’s financial system, like lawyers, accountants, and investment advisors, who help bad actors take advantage of loopholes to funnel corrupt and illegal money into the United States.
All of these efforts make clear that the United States is in the process of transforming its anti-corruption laws. FinCEN’s new rule is a monumental first step—but it must not be the only one. The fight against corruption requires more than one regulation and even more than one law. Instead, it requires a fundamental transformation of the way we approach dirty money. The many additional steps that are in the works—including the ENABLERS Act—should be adopted and followed by other improvements, including making the CTA’s beneficial ownership registry open to the public. Civil society organizations like CREW stand ready and able to help in this fight, and will continue to work with the executive branch, Congress, and civil society to build a comprehensive and state-of-the-art anti-corruption regime.