The US Treasury Department has formally abolished a requirement that American businesses and individuals report beneficial ownership information to the Financial Crimes Enforcement Network (FinCEN).
The final rule, published in the Federal Register on Tuesday, follows the department’s proposal in March 2025 to remove the reporting obligation.
Under the new policy, US companies and individuals will no longer be required to submit beneficial ownership information to FinCEN. Americans who already obtained FinCEN identification numbers will also no longer have to update or correct the information submitted when applying for those IDs.
The rule further removes a requirement for foreign companies operating in the US to disclose Americans who assisted them in registering their businesses.
FinCEN defines a beneficial owner as someone who directly or indirectly owns at least 25 per cent of a company or exercises “substantial interest” over it. Trusts, corporations and other legal entities are not classified as beneficial owners under the definition.
However, foreign entities classified as reporting companies will still be required to disclose information about foreign individuals who are beneficial owners.
According to the Treasury, retaining that requirement will help authorities investigate and disrupt the “financing of international terrorism, other transnational security threats, and other types of domestic and transnational financial crime when foreign entities are used to engage in such activities.”
The original reporting requirement was introduced under the Corporate Transparency Act during the Biden administration. Congress passed the legislation as part of the fiscal 2021 National Defense Authorization Act, with the reporting rules taking effect in January 2024.
Treasury Secretary Scott Bessent welcomed the repeal, describing it as a win for small businesses.
“President Trump promised to cut red tape, and this final rule delivers,” Bessent said. “Treasury is eliminating a burdensome reporting requirement for millions of law-abiding business owners without compromising our national security.”
The decision has, however, attracted criticism from Democrats and former officials who argue that eliminating the requirement could make it easier for criminals to hide money through anonymous companies.
Senator Elizabeth Warren described the move as a “gift to cartels, criminals, and U.S. adversaries that exploit shell companies to move millions” through the financial system.
Warren also pointed to comments previously made by Secretary of State Marco Rubio, who supported the Corporate Transparency Act while serving as a senator from Florida.
“My ‘Corporate Transparency Act’, the most significant anti-corruption & money laundering law in decades & which forces anonymous shell companies to disclose their true owners is going to pass as part of the end of year defense bill,” Rubio wrote on X in December 2020.
Former Democratic Congressman Tom Malinowski, who supported the legislation, said its purpose was “to prevent drug traffickers, Russian & Chinese kleptocrats, and other international criminals from setting up anonymously owned companies to hide their money” in the US.
“Treasury deleting the beneficial ownership info it already gathered is utterly crazy,” Malinowski wrote on X. “This database was not public — it was just for law enforcement to use in investigating crimes. It’s like Trump ordering the deletion of the FBI’s fingerprint database.”
Daniel Fried, a former US ambassador to Poland, also argued that beneficial ownership reporting helps prevent criminals and hostile governments from concealing assets through front companies.
He questioned the reasoning behind the Treasury’s decision and predicted that the policy could face legal challenges.
