US Treasury’s financial crimes unit lays out access plan for shell company data

(Reuters) – The U.S. Treasury Department’s Financial Crimes Enforcement Network (FinCEN) on Thursday detailed its plan for granting access to new data about shell company ownership to certain government agencies, law enforcement and financial firms.

FinCEN in 2024 will begin requiring certain companies to report beneficial ownership data, part of an effort by lawmakers and the Treasury Department under President Joe Biden to crack down on corruption and money laundering.

The new rule finalized on Thursday followed the 2021 passage of the Corporate Transparency Act, a law aimed at combating illicit finance.

A year ago, FinCEN first proposed a plan for allowing access to the database – a trove of detailed financial data on companies created or doing business in the U.S. that has raised privacy concerns.

Beneficial owners are defined as anyone who has an ownership interest of 25% or more in a business, a majority of voting ownership, or someone who exerts “substantial control” over the entity.

Under the final plan, FinCEN said it will roll out access to the data first through a pilot program with a handful of government agencies, before broadening out access to other federal agencies and state, local and tribal authorities.

FinCEN will ultimately be able to share data with foreign governments and financial firms seeking it for customer due diligence, it said.

“This dirty money flowing in from all over the world undermines fair business competition and poses risk to our country’s economic and national security,” Treasury Secretary Janet Yellen said in a statement about the new rules. “Thanks to the new beneficial ownership framework, we’re making tremendous progress toward changing this.”

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