WASHINGTON—The Financial Accountability and Corporate Transparency (FACT) Coalition has submitted comments recommending that the Treasury Department address critical weaknesses in its proposed rule detailing access protocols for a new federal directory of the true, “beneficial” owners of anonymous companies to be established under the Corporate Transparency Act (CTA).
“While FACT welcomes the proposed rule from Treasury’s Financial Crimes Enforcement Network (FinCEN) as an important step toward fully implementing the landmark transparency law, FinCEN must make substantive improvements to the rule to fully realize the transformative promise of the CTA,” the coalition said in a statement.
Clarifying these provisions regarding access to this critical information is fundamental to finally ending the abuse of anonymous entities used to launder dirty money through the U.S. financial system, the organization added in its letter.
‘Decade of Tireless Work’
“The Corporate Transparency Act represents nearly a decade of tireless work by a bipartisan group of lawmakers, experts, and advocates, and its passage in 2021 was the most substantial legislative anti-money laundering victory of this generation,” said Ian Gary, executive director of the FACT Coalition. “In order to realize the promise of this achievement, it is absolutely critical that FinCEN make important changes on the road to faithful implementation.”
“As currently drafted, this second rule has the potential to unnecessarily complicate access to the beneficial ownership database established under the CTA to a degree that could seriously impact the efficacy of the law as a whole,” said Gary. “The Treasury Department should substantially revise this proposed rule to address weaknesses that, if left in place, would undermine U.S. national security and global leadership in the fight against corruption.”
Recommendations Made
In its comments FACT recommended FinCEN should pursue the following changes based on the “clear, plain language” of the CTA:
- Remove and revise problematic hurdles complicating directory use by U.S. state, local, and tribal authorities, including the unfounded requirement that relevant authorities obtain a “court order” to access the directory
- Clarify the role that FinCEN and other authorities will play in granting access to authorized users of the directory: specifically, FinCEN should not assume substantive legal and administrative roles in approving directory access on a case-by-case basis that are not contemplated by the CTA
- Ensure that information submitted to the directory conforms with data best practices, including that it is validated and verified, to faithfully implement the CTA’s requirement that the information be accurate, complete, and highly useful
- Fulfill the stated anti-money laundering, countering the financing of terrorism (AML/CFT) and sanctions enforcement purpose of the CTA by allowing financial institutions to access beneficial ownership information pursuant to their broader AML and sanctions screening responsibilities, rather than restricting authorization criteria for access to a narrow subset of customer due diligence activities
- Remove “burdensome” restrictions, which lack statutory basis, on trusted foreign partners who access the information via U.S. agency request, to better facilitate information sharing for international investigations and prosecutions
It’s Called Fresh for a Reason. And We Offer Home Delivery. For Free!
The biggest, best and freshest news reporting in credit unions remains free in ’23! Each morning CUToday.info delivers its daily Fresh Today news update offering the latest headlines and breaking news right to your email, with the easy-to-read headlines format allowing you to click on the stories that interest you most in order to learn more.
If you haven’t yet signed up for the new email solution on which CUToday.info has partnered with ResponseGenius, you can do so here. Signing up requires less than one minute of your time—and it’s free!
Please note that after signing up you may need to go to your Spam/Junk folder and mark the morning headlines email as safe. CUToday.info does not provide its list of readers and emails to outside parties, and we will not be contacting you to sell you an extended warranty or sending you any links so you may cash in on an inheritance you didn’t know was coming.
And did we mention it’s free?
Please note and/or make your IT department or email administrator aware the emails will be coming from the domains CUTodayinfo.com and CUTodayinfoReply.com