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The U.S. Treasury Department announced it will not enforce a Biden-era small business rule intended to curb money laundering and shell company formation.<\/p>\n
In a Sunday evening announcement, Treasury said in a news release that it will not impose penalties now or in the future if companies fail to register for the agency’s beneficial ownership information database that was created during the Biden administration. <\/p>\n
Despite efforts by small businesses to undue the rule in the courts, it remains in effect. <\/p>\n
On Sunday, President Donald Trump on his Truth Social media site praised the suspension of enforcement of the rule and said the database is \u201coutrageous and invasive.\u201d<\/p>\n
\u201cThis Biden rule has been an absolute disaster for Small Businesses Nationwide,\u201d he said. \u201cThe economic menace of BOI reporting will soon be no more.\u201d<\/p>\n
Supporters of the database raised alarm. <\/p>\n
Ian Gary, executive director of the FACT Coalition, an advocacy group for transparency in government and business, said \u201cwith one tweet, the Administration has contradicted fifteen years of bipartisan work by Congress to end the scourge of anonymous shell companies \u2013 which are a favorite tool of our nation\u2019s global adversaries and criminals including fentanyl traffickers, money launderers, and tax cheats.\u201d<\/p>\n
In September 2022, the Treasury Department started rulemaking to create a database that would contain personal information on the owners of at least 32 million U.S. businesses as part of an effort to combat shell company formations and illicit finance.<\/p>\n
The rule required most American businesses with fewer than 20 employees to register their business owners with the government as of Jan. 1, 2024. Small businesses are targeted because shell companies, often used to hide illegally obtained assets, tend to have few employees.<\/p>\n
Treasury officials, including former Treasury Secretary Janet Yellen, said the regulatory burden would be small, costing about $85 per business, but would offer benefits to law enforcement officials seeking to track down money launderers and other criminals. She said in January 2024 that more than 100,000 businesses had filed beneficial ownership information with Treasury. <\/p>\n
The rule and its legislative authority \u2014 the Corporate Transparency Act, an anti-money laundering statue passed in 2021 \u2014 have been mired in litigation. In 2022, a small business lobbying group sued to block the Treasury Department\u2019s requirement that tens of millions of small businesses register with the government. On Feb. 27, Treasury’s Financial Crimes and Enforcement Network said it would not take enforcement actions against companies that do not file beneficial ownership data with the agency. <\/p>\n
Business leaders cite privacy and security concerns about the database and say it is duplicative to other government agencies that maintain corporate databases. <\/p>\n
\u201cThis is a victory for common sense,\u201d said U.S. Secretary of the Treasury Scott Bessent on Sunday. \u201cToday\u2019s action is part of President Trump\u2019s bold agenda to unleash American prosperity by reining in burdensome regulations, in particular for small businesses that are the backbone of the American economy.\u201d<\/p>\n","protected":false},"excerpt":{"rendered":"
For free real time breaking news alerts sent straight to your inbox sign up to our breaking news emailsSign up to our free breaking news emailsSign up to our free breaking news emails I would like to be emailed about offers, events and updates from The Independent. Read our\u00a0privacy policy The U.S. Treasury Department announced […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[173],"tags":[],"class_list":["post-4204","post","type-post","status-publish","format-standard","hentry","category-news"],"yoast_head":"\n