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FinCEN Issues Final Rule on Access and Safeguard of the Corporate Transparency Act (CTA)

03 Jan

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Update Applicable to:Effective date
  All U.S. and Foreign entities created in or registered to do business in the U.S., or any employers who use special purpose entities created by the filing of a document with a Secretary of State (or similar office under state law, Indian Tribal law, or foreign jurisdictions).  February 20, 2024

What happened?

The Financial Crimes Enforcement Network (FinCEN) issued the most anticipated final rule regarding the access and safeguard provisions of the Corporate Transparency Act (CTA), known as the Access Rule.

What are the details?

The Access Rule prescribes the circumstances under which Beneficial Ownership Information (BOI) reported to FinCEN may be disclosed to authorized BOI recipients, and how it must be protected.

The Access Rule:

  • Protects sensitive information from unauthorized disclosure while creating a useful database for BOI recipients.
  • Is the result of extensive interagency consultations and the public comments received in response to FinCEN’s December 16, 2022, Proposed Rulemaking.
  • On a phased basis, will be provided access to the BOI database for authorized users.
    • The first stage will be a pilot program for a handful of key Federal agency users starting in 2024. 
  • Refer to the full rule for further details.

FinCEN also noted that it will issue a proposed rule to revise the current Customer Due Diligence (CDD) Rule, but did not give any specific timeline to its release.

Business Considerations

  • Review the specifics of your business to determine how to better adjust your policies, practices, and procedures, due to the different framework given to banks and non-financial institutions.
  • Plan communication and training with your key personnel.
  • It is recommended to keep your accountants and attorneys in the loop should you need assistance during the process. Updates to filing should be made quickly and accurately.

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Source References

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This communication is intended solely for the purpose of conveying information. The present post might incorporate hyperlinks directing readers to websites managed by third-party entities. The inclusion of any links within this communication is meant to serve as points of reference and could encompass opinion articles from various law firms, articles from HR associations, official websites, news releases, and documents of government agencies, and other relevant third-party sources. Vensure has no authority over these external websites and bears no responsibility for their content. Furthermore, Vensure does not endorse the materials present on these websites. The contents of this communication should not be interpreted as legal advice or as a legal standpoint concerning specific facts or scenarios. Nor should it be deemed an exhaustive compilation of facts potentially pertinent to federal, state, or local laws. It is strongly advised that employers solicit legal guidance from an employment attorney when undertaking actions in response to any legal updates provided. This is due to the possibility of future alterations occurring in federal, state, and local laws, regulations, as well as the directives and guidelines issued by governing agencies. These changes may transpire at any given time, potentially rendering certain portions of the content within this update void or inaccurate.

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