Treasury Department Narrows CTA Enforcement to Foreign Reporting Companies, by Seth Meyer, Esq. and Alisha Talati, Esq., 3-3-2025

After months of stops and starts, the U.S. Treasury Department announced on March 2, 2025 that it will no longer enforce the Corporate Transparency Act’s beneficial ownership information reporting deadlines or associated fines and penalties against U.S. citizens and domestic reporting companies.

Instead, it will be issuing a proposed rulemaking that will narrow the scope of the rule to foreign reporting companies only.

This latest news comes just days after FinCEN announced on Feb. 27 that it will not issue any fines or penalties or take any other enforcement actions against any companies based on any failure to file or update beneficial ownership information (BOI) reports by the current deadlines, which had included the pressing March 21, 2025 deadline until a forthcoming interim final rule became effective.

But now it appears ultimately that only foreign reporting companies will be on the hook for compliance.

Background

This is just the latest twist in the CTA saga, which has been embroiled in legal controversy.

On January 7, 2025, the U.S. District Court for the Eastern District of Texas issued an order staying the Department of Treasury’s Financial Crimes Enforcement Network’s (FinCEN’s) regulations implementing the BOI reporting requirements, precluding FinCEN from requiring BOI reporting or otherwise enforcing the CTA’s requirements. On February 5, 2025, the U.S. Department of Justice—on behalf of Treasury—filed a notice of appeal of the district court’s order and, in parallel, requested a stay of the order during the appeal. On February 17, 2025, the court agreed to stay its January 7, 2025 order until the appeal was resolved.

The anti-money laundering law, which was set to go into effect at the beginning of this year, would have impacted approximately 34 million businesses.

Kaufman Dolowich continues to monitor developments on this ever-evolving issue. For more on recent CTA rulings, visit KD’s previous blog.

Authors: Of Counsel Seth Meyer and Associate Alisha Talati