The Financial Crimes Enforcement Network (FinCEN) has announced a temporary suspension on the requirement for reporting companies to file beneficial ownership information, following a recent federal court decision. While the injunction is in effect, companies are not liable for failing to submit this information but can still do so voluntarily.
The Corporate Transparency Act (CTA) aims to protect the U.S. and international financial systems from illicit activities like terrorism financing and money laundering. However, enforcement of the CTA’s reporting requirements has been paused by a nationwide preliminary injunction granted on December 3, 2024, by the federal district court in the Eastern District of Texas.
The Department of Justice has appealed the decision, and while the legal challenges continue, FinCEN will comply with the current court order. This means reporting companies are not currently required to file their beneficial ownership information, but voluntary submissions are still accepted.
