Proposed Regulations Issued by U.S. Department of The Treasury

On December 8, 2021, U.S. Department of the Treasury (FinCEN) issued proposed regulations requiring the reporting of beneficial ownership of legal entities formed before, on, or after the effective date of the final regulations. Reporting entities include domestic corporations, LLCs, LPs, general partnerships, statutory trusts and foreign legal entities registered to do business in the U.S. Twenty-three types of entities are exempt; many closely held legal entities are not exempt from reporting. The Treasury estimates that over 30 million existing entities will be required to report; each year roughly 3 million new entities will need to report. Willful violations are subject to a $500 per day civil penalty and criminal fines of up to $10,000 and up to two years imprisonment. Comments to the Treasury are due February 7, 2022. Our panel of experienced practitioners discussed the proposed regulations.